year 2 = 5 acres
year 3 = 10-12 acres
year 2 = 5 acres
assume you buy land
the first year will be spent in building the facilities, zoning and planning (irrigation, tanks, fencing, nursery etc) so i am not sure how your plan will work out
do not forget the cost of cultivation and labour availability etc, if you have someone e.g. a farm manager (actual farmer type guy) with experience then it would be easier for you
not trying to be discouraging here but 100 acres is a lot of land unless you procure property which is ready to sow / plant
my suggestion would be leave the 90 acres as is, and target only 1-12 acres in year one and then work out your plan, i think it would be easier to achieve.
sincere advice: do not drop everything and jump into this, keep options ready for the initial lean years whre you still have some kind of income coming in…in the long term you will be successful in agri 100%
the most important quality for people like us who want to do this shift is “endurance”
i think should speak to people like cowherd, kaustabh johri, sampada farms, biofarms on this forum who will be able to give you more inputs
btw for your business plan, where are you sourcing the data for cost of cultivation, labour, agro-climatic requirement, irrigation etc? have you reached the state where you have actually met kvk, university dudes or farmers?
sanjay, chandra, agri_exec & others
I have an idea, if this makes sense then suggest making this a different controlled thread on the forum
there are quiet a few people on this form i.e. farmer wannabes
the one common sticking issue is land
what is suggest is, if we can get consensus on certain terms then perhaps a few of us can get together and buy land together i.e. dont mean in partnership as that has its own set of problems what is suggest is the following
- hunt for land being sold in bulk
- buy acerage previously agreed as a part of our initial planning
- gives us advantage of more people for due diligence
- bulk purchase gives us a price benefit (can bring down the cost per acre to around 30-40%)
- can work together as a team along with a high degree of independence on own farms with other farms adjoining
- cost of cultivation can come down, cost of infrastructure can come down as again its bulk procurement
- integrated farming can be done etc
- most important, stewardship is assured during the intial years (0-3) when all or some of us cannot dedicate full time (time) to the land
only crux here is getting the initial agreement (principles right) for example (what you will not do on your farm that can have a negative effect on my farm and environment etc since they are next to each other)
these are just intial throughts, want to know if there are any takers
there will be no obligations or commitments on what you do with your land as long as it is sustainable for you and the others around you
e.g. i will be able to supply good quality organic manure, vermicompost, nadep, panchagavya etc in good quantities by end year 3
Agri…Agreed that for containerized shipping distance from port issue would decrease as the quantity to be shipped increased.
However, I have seen a recent trend of veggies being air-shipped to reduce time to stomach Of course, this happens only with organically grown, high value products…but still its a trend for farmers/exporters to notice.
Also, multi-cropping would reduce single crop quantity to be shipped at one time, unless buyer is shopping for more than one product from the same origin.
And moreover, distance from major town would matter also in the sense that one would need to sell one’s produce domestically too. Hence my requirement of being within 200 kms of an International Airport, which would naturally be a good sized city, and therefore a domestic target market.
Would invite you to rethink & comment on the distance situation again.
One thing, that may be done is the farm having a reefer truck (big/small) and instead of making daily sales/delivery trips to the nearest big city, it can be weekly trips to multiple towns. But then the fresh produce label would need a rethink. In addition, it would need the farm to create a minor cold storage infrastructure of its own.
Now, lets see comments flow ;-))
Great discussion on this thread!
I was in your situation about a year and half back and had so many questions…just like you. Fortunately, there is a lot of help available out there with forums like this one.
I had a quick glance at the thread and some of my inputs are below…
You really seem to be doing your home work regarding land selection, especially after a detailed geographical study. I do not know much outside TN but just make sure you are eligible to buy land in the state, if you considered an “outsider” or not from agri background. For instance, in Gujrat you need to be from farming community.
Make sure you are realistic about short term intercropping in your business plan. I had allotted 22 acres as per my expenses for short term crops, a year later I am down to 5 acres. Short term crops are LABOR INTENSIVE. It is firefighting on a daily basis wrt pest management, irrigation, fertigation, management etc. So make sure you have enough resources to manage your short term portfolio.
As Brijesh mentioned, have short term , mid term and long term crops in your portfolio…This will help you in long term.
You should definitely aim for more than 10,000 per acre returns else it is not worth working so hard out in the field. You should be aiming at 50,000 - 100,000 range. Check out TNAU (agritech.tnau.ac.in/success_stor … index.html) for ideas,
As far land procurement in TN is concerned, this state has been in/famous for huge land holdings by folks from North India for investment. Remember the Jatropha fever which started 10 years back; thousands of saline acres were bought by folks as this crop did not require quality water and soil. Well, it did not work, that is a different story.
If you are going to do serious agri, then there are few practical constraints. First, is the language. Most people do not understand Hindi but a fair amount know functional English. Unless, you learn Tamil or have a translator, this will be your biggest challenge. There are pockets where people from else where are not as “welcomed” but then that is the case anywhere in India. It takes time and it is a matter or patience. I am from North but have been able to survive and perhaps thrive in TN heartland.
Proximity to an agri college is helpful for advice, consultancy.
Try to get a experienced farm manager (if you need one). Experience is more important than educational qualification.
Break your 100 acres (or whatever you buy) in phases based on your capacity. DO NOT try doing everything in 1 go. What you need to initially, is fencing.
Ensure ample labour availability. Thanks to NREGA, labour is an issue all over India. This will become a constraint at some of time for you, so make sure your portfolio acknowledges this.
Talk to farmers about cost of cultivation, yield, marketing etc. Do not go buy Agri univ estimates or other online sources.
Regarding Banana - unless there is ample water available, do not do this in a big scale. Try small and then grow.
Regarding land development is concerned (rock/shrub removal, digging, tractor work, fencing, labour quarter, irrigation, storage, EB connections, bore etc - be prepared for 1-2 lakhs per acre. Of course, it depends on your farm design, usage of material etc, soil and water quality, but this would be a pretty realistic estimate.
Like you, I have been a “city” guy (in fact a NRI), this is a tough path but it is not impossible. PERSEVERANCE is the key, I guess. You can follow me at www.saverafarms.com. It may be helpful if you read Experiences section.
I would not mind any such attempt. At the very least it would locate the land and get it bought at a lower price. Everyone would buy & own their own parcel, in any case.
Reg. requirement of sustainable farming is a given. None of us who are organically minded would like a neighbour whose nitrates and pesticides are leeching into the water table and effecting our produce. Nor would they like us…thinking good insects that we plant are source of their problems.
During my research, I came across one instance in India, where the chemical farmers blamed a neighbouring natural farmer for their pest problems (because he would not use pesticides & prolific insect population, beneficial or not, from his farm was deemed to be cause of all their ills). So we’d all rather have neighbours similar to each other, as much as it can be controlled.
In fact, due to this one fact, I have been actively looking at land options adjacent to Govt. forests.
However, its very difficult for lots of people to agree on one land…information & decision process may be the same…but perceptions differ…just see how ppb’s & your perception about local farmer’s feelings in TN differ.
But I think I am the only one willing to migrate far…most will be looking around their own state.
In any case, an attempt cannot harm. If it does succeed, it will be beneficial for all.
And we don’t need to close out this thread. General discussion can continue here and I can create a listserv/mailing list on a hosted server that I have. Any land buying related discussion can take place there. I feel this thread is becoming a good resource for someone like myself and should continue till business plan is done…I would be posting the initial layout of the same in thread till its done.
Man…There is not one line you have written on your blog, that I have not read twice
In fact, you are one of the few examples who made me think that I could do it too.
Thanks for the encouragement. In fact all the people on this board have been very helpful with their comments.
Well…I have contacted the kvk & agri universities in Punjab only as yet…though have been pouring over web-sites of various states’ agri deptt.s’ and agri univ. Will be getting in touch with them as & when I land up there to see first lands that are proposed by brokers.
I am planning to migrate to TN. Born and brought up in mumbai, parents originally from kerala
family brought into the plan and they are migrating with me as well
a good bet is sivagangai district in TN, near to madurai (3rd or 4th largest city in TN)
has many farms, kaustubh is also nearby
1-2 lakhs/acre as development cost? is that a bit high considering that you end up paying around 1-2 lakhs for an acre of land to buy it? from what I understand, the biggest killer is the fencing, then comes borewell (1 lac end to end cost for each one), electricity setup, i think i will probably end up buying a tractor with implements and getting started on the ploughing etc myself as rent works out a lot on a big acerage, levelling can be a challenge as it would require a jcb or maybe some clever tractor play …in any case on 50 acres i would be free to play around with equipment without having to worry about pedestrains …maybe just hire someone to train me
Thanks…very nice & helpful post. Could you please give a rough breakup of this 1-2 Lakhs per acre land development cost?
I am thinking of a living fence. Servant Quarters…yes, borewells…10 or so, one big storage pond of natural earth…(seepage should be okay as its to one’s own land fertility) and tilling up the land (first time & one time only…as I plan not to do that ever again once the soils are initially loosened) with a tractor. Unless one counts one’s own house in…there’s nothing to my knowledge that would cost this much…at 1 Lac an acre, we are talking 1 Cr. for Land development and at 2 Lac an acre, we are talking 2 Cr. for Land development.
I really can’t imagine, where I would spend that much…unless I keep inviting all my new village pals to a scotch and city type cabaret every night.
Just joking, but still…maybe I am really not prepared…could you please hand out a few pointers?
Only the cost of hiring a JCB has not been accounted by me for my pond…I want an acre or acre & half of pond…about 6-7 meters deep…and some minor ponds spread across property…especially if the property is a non-irrigated one…which it is bound to be…as irrigated lands are often high cost.
Since you have used a JCB, can you please advise about hiring a JCB vs. buying one…maybe a second hand one? Especially considering my pond job? Costs? Issues?
Very difficult to do! Owner led businesses generally do not adjust to long term absences…nor do new businesses grow without active participation from the owner.
Have to windup things that need frequent travel…foreign or domestic…it is half my dis-satisfaction with my life, anyways ;-))
But will nevertheless have survival income if the agri venture does not produce for a year or two…but it WILL hurt ;-))
If there were not risks…everyone would be a entrepreneur and no one would look for the security of a job
One’s gotta do…what one’s gotta do!!
This is just a range. I would think in most cases 1-1.25L per acre would be the estimate. In Dindigul, Salem areas, people are boring 800-1000 ft - the cost just adds up.
Fencing will cost you Rs 70+ per ft …again depends on the material/location etc
Borewell pump/erection/wiring will cost you round about 50k
Borewell digging will cost you another 30K to 50K depending on depth
Land cleaning will be 3K to 10K per acre depending on shrubs, rocks etc… (JCB) It is not worTh buying one. This is one time cost and it will be a liability later on.
Tractor work (ploughing, rotavator, 5 finger) is additional. Depending on soil quality, ploughing and rotavator will take 1-2 hours each
per acre. Worst case 4 hours * (500 - 700 per hr) = 2400/acre avg. Rotavator is typically around 650-700/hr in TN (may differ elsewhere). Disc plough is about 400-450/hr in TN. In some areas, people have to pay for fuel and driver tip. If you are a big farm, you can negotiate for no fuel/tip.
It is probably worth going for a mini tractor for maintaince mode. Big tractors cost more and will probably be not as productive once your farm is up and running. Look out for a post on my blog soon…I have bought a Mitsubishi 180D mini tractor. Moreover, if there is a village around, there will be plenty of tractors available and you will be in a good position to negotiate.
Quarters is going to be another big expense. In 100 acres, you atleast need to have 3-4 units spread across for security. Basic quarter will cost you Rs 650+ per sq ft (asbestos sheet). Cost is influenced by cement, sand, location etc…
Drip is another infra you want to invest in if you have a big farm. Depending on the crop/design, it can range from 10K to 25K per acre. Typically, cost is more for veggies since inline laterals are more exp and are more dense per acre (compared to orchard crops).
You may want to invest in a Tank for storage/irrigation as well depending on your water requirement.
EB connections cost will vary from state to state but based on length of the line/existing infra, it may cost you anywhere from 30K to 50K per connection
This is just a overview. As mentioned, depending on the location, it can vary. If you are judicious about your farm design and expenses, 1Lakh per acre is manageable. The cost above does not include your operating cost and planting cost. You can add that according to your crop.
Do not even think of irrigating your land by conventional method when you are talking 100+ acres. You will waste water and labor requirement is huge. Invest in drip - it is exp but worth it over a long run.
JCB does not cost much - in TN it is 600-700 / hr + 200 per day tip. Do not waste your money on a 25L machine. Might as well make a fancy farm house
Why do you want such a big pond? For irrigation? Depending on the cliamate, you will lose a lot of water to seepage and evaporation…
A rough estimate is given in my previous post…
thanks a lot for all this info that even I was looking for it. You have given the practical costs involved along with estimates. Thanks a lot once again .
thanks a lot for this practical piece of info which is very very useful for beginners.
You told the practical way for quick turnaround in farming .
And yes…since I plan mostly tree crops, swale method of irrigation should do. May think of drip for separately planted veggie acres though…still all this is yet in a flux.
I forget the name…but a famous ancient general said…no battle plan survives an encounter with the enemy…you have to be flexible enough to understand this and nimble enough to adjust to it!
Your inputs are quite valuable and you can be sure that I will be evaluating each word of advise that I get at this forum or elsewhere, at every stage, again & again.
Why not put all eggs in one basket? The inherent risks of agri business presents itself over all crops. Its not devoid of risks per say. Growing bananas over all 10 acres has few advantages. Firstly, for newbie like us its more easy to understand the nuances and intricacies of growing just one crop as opposed to learning about 8 different crops. You have to understand that we are not professionals yet. So better to get the focus right and do one thing well. Secondly, growing different crops means changing your setup all the time. Thirdly, Its back breaking work to grow 4-5 crops in a year and it becomes labor intensive a lot of times. You have to be on the job. Fourthly, you have constantly keep looking for “best price” all year round.
I never said the main crop will yield in 8-10 months. I said Ratoons will yield in 8-10 months. Its a fact. Ratoons although have slightly lower yield (about 75-80% of your initial yield) but the lesser yield makes up for the savings in saplings and planting costs if you were to replant the second time.
We are looking at about 12 liters per day for a period of 300 days. Thats 3600 litres per cow. However considering the onset of next calving which will occur after about 450 ( 300 milking & about 150 dry ) days this cow can be considered as giving 8 Liters per day & corresponding feed will be consumed during the cycle of 450 days. Show me a dairy or even a 10 cow setup doing 50% net and i will invest in one. ( I just stopped short of investing in one 2 months ago)
Also, you have not factored the cost of cultivating 2 acres for fodder and the 50% returns you are seeing is probably because you did not factor in the cost of your cows at all. Buying 10 lactating cows at one time… beats the purpose of consistent earning throughout the year
Google says: “Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative foregone (that is not chosen). It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices”.
Ask anyone who handles money/business and they are likely to tell you the importance of OC. It just ensures that your resources are used efficiently. OC is not specific to any industry. You can apply this to agriculture. You have half an acre of land and you want to grow Mangoes and oranges. Lets say you decide to grow oranges. Then your OC for growing oranges is that you cannot grow mangoes. If you do agriculture for the pure love of it then, don’t be bogged by economics. If you consider the economics then i suggest you give it a fair try.
Brijesh, I’m not trying to pick on you here. My intention is to put facts and figures right.
When and where did I say that? I merely pointed out that you can surely make more than 10k per year per acre
At the risk of sounding a bit harsh here, here are my thoughts…
A lot of good suggestions(and my mediocre ones) have been made on this thread about various things. The question to ask is… Have you made any progress with the suggestions you have received?? This thread will go from 4 pages to 8 pages and you will realize that you are just where you started. There is absolutely no (repeat) no point trying to access labor costs/land leveling costs/costs of land etc etc UNLESS you have squared in on a piece of land to buy. Period.
There are many variables, permutations & combination s blah blah with respect to agriculture and you will, more than often simply be awestruck about the various possibilities and outcomes. You simply cannot discuss every pro and con here with out knowing where you will own land.
My take is…
Each piece of land has its advantages and disadvantages. Just thinking “I’m open to buying land anywhere in India” and then spending time building a business plan does not help. You have already decided to go rural so that’s your first step. Second step, decide where you want to buy land. State/district/taluk etc etc. Scout for land based on your budget. If you are lucky you may find a nice one. Once you have identified (repeat identified) the land, I will assure you that you will be in a much better position. You will know what the land costs, You will know how far you are from the market, You will know soil/water and climatic conditions, labor availability, you will know what to grow etc etc. Once you know all these things, you can work out the economics and build a business plan around the land you have identified. Makes sense? So lets do whats most important first, Otherwise, we are all increasing our carbon footprints here.
My story…(so far)
Just like you, I went about doing a lot of research online and talking to lots of people about the pros and cons without even having a piece of land. Six months down the line when i looked back, I had not not taken a single step forward. Eventually, I knew what I had to do. I asked myself where I wanted to spend the rest of my life. When i had the answer, i identified two districts in the state of karnataka and began to search for land. I identified 4 pieces of land that fit into my budget. I put 3 on hold and I am now focusing my energy on a single piece of land and working out the economics for it. If it doesn’t make sense then I will pick the next piece of land and study it. so on and so forth till I get what satisfies me in all respects. With a piece of land in hand, I know exactly what it needs from me.
My honest and a very friendly suggestion would be to first ask yourself some very basic questions. Find answers for it and go full steam ahead to live your dream.