Financial analysis of the fruit trees planted on tin mine land at Amphoe Ban Na San, Changwat Surat Thani
1992
Saichol Seedang
Main objective of the study is to derive the financial viability of the investment in rambutan and durian to be planted on tin mine land at Amphoe Ban Na San, Changwat Surat Thani. Information regarding the benefits and costs per rai was obtained from the interview with 46 local farmers whose 44 and 25 plots of land have been planted with rambutan and durian, respectively. The indicator of financial viability of the project are the net present value (NPV) the benefit - cost ratio (B/C) and the internal rate of return (IRR). In addition to the indicators of financial viability of the project, analysis of sensitivity and net cash flow had been carried out. At 12.5 percent discount rate and the project life of 25 years, NPV was 35,235 baht for rambutan and 170,371 baht for durain; B/C ratio was 1.51 for rambutan and 3.17 for durian ; IRR was 19 and 40 % for rambutan and durian, respectively. The sensitivity analysis was carried out for both projects by assuming 10 % increase in costs and the benefits remain the same. It was found that, the indicators of financial viability of the projects were still at the acceptable level. The net cash flow under the assumptions specified in this study, rambutan was negative from year 1 to year 9, while durian was negative from year 1 to year 4. It can be concluded from this study that planting of both rambutan and durian on tin mine land is financially viable. Since the projects have been proved to be technically viable, it is important for the government to help the farmers in providing land and cheap credit to them. This is due to the fact that the project, in addition to its financial justification to the farmers involved, can contribute positively to the environment.
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