Agribusiness is a legitimate investment for many in the Philippines. The World Bank even believes that it is the way for the country to rise from poverty. It employs about 40% of the country’s population, according to the Food and Agriculture Organization. However, the capital-intensive business makes it difficult for some entrepreneurs to get into.
The good thing is that each pound is worth a lot more in the Philippines, encouraging foreign investors to enter the field. Aside from providing more jobs and introducing new technology, foreigners also advocate for reforms to benefit farmers.
Some overseas Filipino workers (OFWs) who return to the country and convert their earnings from a foreign currency into the Philippine Peso to buy agricultural land. The majority of these OFWs plan to use the land as part of their retirement fund or a secure asset that they can sell in the future. It is a sure return on their investment as the roads in the country continue to develop.
The country’s Department of Agriculture is also offering OFWs interest-free loans for agri-ventures below ₱15 million. Seeing the opportunities in agriculture as the path for the country to better progress, it’s no surprise that the government is trying to encourage more of the foreign currency earned to return into the country.
Remote Farming
A recent business model in agriculture is the venture to invest in a plot of land, hire a team of workers, enlist the help of a seed company, and supervise the entire process from abroad. With the help of technology, farm owners no longer have to be present on the farm. Enough capital allows them to get very cheap labor in the country as minimum wage ranges from £4 to less than £8 a day.
The country also has a competitive scene in terms of seeds. You are bound to have numerous options to choose from. Each company aims to produce the best seeds of the highest quality and highest yield. The competitive nature of the industry has led to complimentary consultation when their product is purchased directly from the company. This means that your farmworkers can receive advice and training from the experts on the product as part of your purchase, to produce the best yield for your business.
Conversations on the day-to-day situations of the farm can be held during video calls, where workers and an agricultural manager (if you hire one) can give you steady updates on the production. They will be able to inform you of any news (good or bad) while you’re abroad. This will allow you to check in on the farm regularly, and you can make informed decisions on the direction of your farm.
Aside from the cheap labor in the country, the return on your investment can reach over ₱1,000,000 per crop cycle, or around £15,000. It’s not a bad source of passive income as the shortest crop cycle is 30 days for leafy greens. Although the price of the crops can fluctuate, with some more volatile than others, there are common instances where farmers hit the jackpot, earning over ₱1,000,000 for less than a hectare’s worth of crops.
An example of the volatility in your return of investment can be onion production. For each hectare, onion production requires ₱150,000 of capital or just a little over £2000. After 4 months (a normal crop cycle), a farmer can harvest a conservative average of 15,000 kilograms of onions per hectare. The price of onions is so volatile that they can be sold at a farm gate price of ₱65 per kilo or up to ₱150 per kilo.
The prices at a marketplace double this value. So, imagine if you’re selling your harvest at the market. You’ve hired some trucks, and your workers sell them at the marketplace. At a conservative, average retail price of ₱220, you can earn ₱3.3 million for one hectare or over £49,000 in 4 months, and your hands didn’t even have to get dirty.
Three pro-tips to give you a better chance at succeeding:
1) Farm when the prices are low. No one will be farming then because they’ll be too disappointed with the prices. You could end up hitting the jackpot in the next crop cycle.
2) Reward your workers by showing how much you appreciate their efforts. You can send a balikbayan box from the UK to the Philippines filled with treats for them and their families as a sign of gratitude for your newfound fortune. It’s one of the ways Filipinos can experience how much someone cares for them abroad.
3) Sell it yourself. Don’t wait for the middle-man to bring your produce to the market. You will earn double for the crop cycle.
The most important thing in Agribusiness is never to give up and to always try again. Someday, you’ll be able to retire and farm remotely for your day-to-day needs.
