Analysis of a Sugarcane Procurement Business System in Suphan Buri Province

Abstract

     This study aimed to compare the costs and returns as well as investigating the advantages and disadvantages among sugarcane procurement alternatives used by the quota leaders in Suphan Buri Province in the production year 2009/10. The study showed that, with procurement from their own farms, the quota leaders had production costs for planted cane of 9,803.55 baht/rai or 797.69 baht/tonne and 6,645.92 baht/ rai or 596.05 baht/tonne for the first rattan cane. The quota leaders could earn 1,100.29 baht/tonne and 1,159.44 baht/tonne from selling the planted and first rattan cane output, respectively. Hence, this procurement alternative generated profits of 302.61 and 563.39 baht/tonne, respectively. The other procurement alternative, which involved giving credit to the farmers of the quota leaders, incurred a cost of 222.59 baht/tonne for credit fund interest, harvesting, and transportation. After paying back the loan, the quota leader had a profit of 100.55 baht/tonne. Where the quota leaders bought directly from the farmers, there was a profit of only 67.51 baht/tonne from selling the output to the sugar mill. Therefore, the study concluded that for quota leaders, sugarcane procurement from their own farms could generate higher profits than procurement resulting from giving credit to the farmers and buying directly from the farmers.