AGRICULTURAL DEVELOPMENT BUSINESS STRATEGIES THAT CAN SUCCEED IN THE PHILIPPINES

I spoke with one expat here who has found a way to profit from the rich agricultural land of the Philippines without being bogged down by regulations, the lack of scale, or the hands-on nature of running a potentially profitable farm here.

He says he’s bullish on rice production as a crop and that rice farmers suffer from some of the greatest inefficiencies in the Philippines. For example, an unmilled sack of rice can go for a small fraction of the price of processed rice ready to sell.

So he and his partners invested some decent money and offered an integrated service to farmers to mill their rice. In addition to profiting from the spread on the rice crop, he also offers cheap loans to rice farmers so they don’t have to take the “Bombay loans” that charge 60-80% annual interest, and sometimes result in their farm being taken over and a refining customer being lost.

The business philosophy is similar to that used by enterprising entrepreneurs during the California Gold Rush: sell shovels rather than pan for gold.

While the business of farming in the Philippines isn’t exactly overly competitive — there’s plenty of demand for food — it is one that is hard to scale.

And with the average farmer in the Philippines being 52 years old, the market for services like this looks like a good opportunity.

My connection has also opened a rendering plant to process leftover animal parts, from blood to feathers. In the United States, animal feathers would command a price from farmers who know their value. However, in the Philippines, farmers are literally paying to get rid of feathers. It’s a small, unsexy example of how to profit from discrepancies in a market, something we talk about here all the time.

https://nomadcapitalist.com/finance/investing/invest-philippines-agriculture-without-getting-dirty/