Cost and return on investment in planting kapok
1987
Chidkamol Manyuan
This study aims to find the cost and return on investment in planting kapok. Results of the study can be used in planning for promotion of kapok planting among farmers. In addition, interested individual can use the information for decision making in investment in kapok planting. According to the study, a kapok plantation will start to generate income from the sale of kapok at the end of year 3. During year 3-15 average cost per rai per year is between Baht 604.18 - 1,177.83 where income per rai per year is between Baht 413.25 - 3,161.00. A kapok plantation produces largest harvest in year 12. The total accumulated profit of a plantation with 15 years life is Baht 9,457.64/rai representing 44.95 percent of total income. From an economic point of view, a kapok plantation pay back period is 6 years 2 months with net present value throughout 15 years of the plantation life of Baht 4,747.57, 2,237.52 and 1,649.23 when cost of capital is 6 percent, 12.5 percent and 15 percent respectively. Its internal rate of return equals 30.34 percent. This makes a kapok planting an attractive investment whether farmer's own capital or loans from the Bank for Agriculture and Agricultural Cooperatives or even loans from other commercial banks are used. Kapok trees grow easily and require very little care even in draught areas. Capital needed is also very minimal while its prices are generally stable. Since other crops require larger amount of capital, more care and usually command varying prices which in all represent risky undertaking, farmers are encouraged to consider planting kapok especially those who occupy unused or infertile lands unsuitable for other crops. Planting kapok is sure to increase their revenues.
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