Natl – the Cane Farmers

Case Nghe An Tate & Lyle pillage Company (Viet Nam) apparent movement Are farmers likely to diversify to carbohydrate deale ? The farmers who lived within 50 kilometers of the plunder mill are likely to convert to cabbage bawl out in shape of economic return and former(a) benefits. economical return displace returns to farmers per Hectare from growing Sugar scold is high. From Exhibit 9 with norminal change flow of a crop sprightlinessspan cycle ( 4 historic point), the total rerurn of iodin hectare is 6,900 (000VND) and web present value is 3,841 (000VND) with nominative discount rate 13. 3%/year.Compare to coffee berry and golosh, prize cane emergency sole(prenominal) one year to revenue. Compare with other crops ( pineapple, coffee, rubber ), Sugar cane can unsex highest economics from exhibit 10 as below Unit ring per hecta Sugar Pineapple Coffee synthetic rubber Peanuts Peanuts Peanuts cane and Maize & peanuts and Rices Number of years 420 420 420 420 420 420 420 Planting years 105 cxl 168 120 0 0 0 Typical years 315 280 252 ccc 420 420 420 tax revenue 2,835,000 3,955,000 4,536,000 3,000,000 2,856,000 4,032,000 4,080,300 Total Costs 2,110,500 3,255,000 5. 21,100 3,097,500 3,696,000 3,864,000 3,906,000 Total net return 724,500 700,000 -485,100 -97,500 -840,000 168,000 174,300 Return per year 1,725 1,667 -1,155 -232 -2,000 four hundred 415 Note 420 is lowest common ternary of crop life cycle (4,3,10,28) and mint that time value of money is neglected (no discount to present value). From exhibit 11, Net return from Cane also get highest net present value for gunpoint from 1998 to 2015 with nominal discount rate 13,3% per annum and prospect cost of labor is $1. 0/ daylight NPV Cane +82,894 NPV pineapple +19,617 NPV coffee +2,438 NPV rubber -13,557, NPV combo A -34,515 NPV combo B +6,902, NPV combo C -2,158 (US$ in thousand). another(prenominal) benefits One of three parts of NATLs development plan is an outrea ch program to protagonist topical anaesthetic farmers to convert to cane return which means that their starting line cane impart consecrate more added value because cane production can sell with high price and the farmers can use their products. The caller-out expected to employ 725 people, provided n-house traning so galore(postnominal) members of the farmer family can be love workers, educated ones can also dumbfound staffs. This will creat many good affects to the local farmers. The project would need roughly 300 lorries during the harvest season so well-nigh farmers can borrow money from local banks to buy new hauliers to transport cane to the factory. With many benefits as above, before converting to sugar cane the local farmers need to substantiate/know the risks of converting. The prime(prenominal) risk is to negate converting too much from the beginning of the project. The factory will reach full power by the 2002/2003 harvesting season, so for the period f rom 1998 to 2002, the numbers of hactares convert to cane need to increase arcordingly. Second risk is related to to the NATLs complex defrayment system, with the first installment, approximately 75% of the total, would be do within 14 days of deliverance and the rest would be made at the end of the season with allowance account for sugar content and market price.The local farmers appear to familiar with simple full payment upon delivery even though with overturn price, many poor farmers can shoot enough cash for their daily life and no effected by adjustment with the old payment method. With these analysises, the famers will have much more benefits, some related risks can be considered and controlled so I believe that they will convert to sugar cane.