A financial feasibility analysis of income generating activities for farmers: Empirical evidence of Thai sugarcane farmers

Abstract

Currently, sugarcane farmers in Thailand encounter multiple challenges, including fluctuations in yield prices, labor shortages, and drought conditions. These issues contribute to variability in both product output and income levels. In response, farmers are engaging in supplementary activities to generate additional revenue, such as implementing double cropping practices and utilizing agricultural waste for sale. This study aims to analyze the financial feasibility of supplementary activities within sugarcane farming. The findings are intended to serve as a guideline for farmers in selecting supplementary activities to enhance their income. The study utilizes primary data collected from a sample of 20 sugarcane farmers in the provinces of Kanchanaburi, Chaiyaphum, and Burirum, comprising 11 farmers who engage in supplementary activities and 9 farmers who do not. The research employs net present value (NPV) and benefit-cost (B/C ratio) analysis as methodological approaches..

The results indicate that the majority of sugarcane farmers opt for double cropping as a means to generate additional income. In terms of cost and benefit analysis, farmers participating in supplementary activities incur higher costs compared to those who do not engage in such activities. Farmers involved in double cropping encounter marginal costs associated with seeds and labor. Nevertheless, they achieve a higher average income than those who do not pursue supplementary activities, consistent with the financial feasibility results.The net present value (NPV) for farmers engaged in supplementary activities is 52,337.92 baht, with a benefit-cost (B/C) ratio of 1.34. In contrast, for farmers not participating in supplementary activities, the NPV is 33,913.67 baht, and the B/C ratio is 1.27.