Sino Agro Food Inc (fka SIAF)

[viking86]

what a better way to raise farmers' income than this? From 10k:

Sanjiang A Power’s strategic plan for the fattening of beef cattle is such that within Year 2 of operation the fattening portion of its operation will be leased out to regional farmers under the following terms and conditions:

· Our cattle houses (22 of them) will be leased out to the regional farmers who will have the option to lease up to 4 houses at a time, such that they will supply their own young cattle for fattening and they will manage their respective operations.
· We will provide all associated in-house facilities and services (i.e. veterinary service, utilities, laboratory analysis, ration and nutrient formulated mixing machines, etc.), supply the livestock feed, and marketing of matured beef cattle.
·The breeders (Farmers) will grant us the first option to buy all matured cattle stock from them and in the event that they decide to sell to other buyers, such sales will be conducted through our account to ensure that the Farmers’ costs are covered by sale proceeds.

Just a wild guess: say a farmer family of 3 leases 2 cattle houses from SJAP at a cost of $50 per house per month, totaling 100x12=1,200 USD/year. They raise 2x100=200 head of cattle and incur $100 total cost per head (food, services, misc), plus the original cost per 3-month baby cow that they supply of $100 (max), for a total cost of:

1,200+ 200x 200 = 41,200 USD

After a year, they sell the 15-month old cattle back to SJAP for say $1000 per head

total sale revenue = 180 x 1,000 = 180k USD (assuming a high mortality rate of 10 per 100)

total annual profit = 180k -41.2k= 138.8k, or 46k per farmer. Not bad compared to an estimated current annual income of say $1-2k per farmer.

Bottomline: I think SIAF should franchise this model with the help of the local government, building hundreds of cattle houses and leasing them to the farmers. It's a win-win proposition IMO.