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Thread: Buying Sawah

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    Regular Adam's Avatar
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    Default Buying Sawah

    Hi there!

    I noticed a little while back Gilbert wrote that he owned some sawah (rice padi) around his property. My wife and I are seriously considering buying a hectare of sawah close to our village in East Java upon our return home shortly. Can Gil or anyone with experience in sawah ownership share some of their views on the subject?

    I know one should always listen to their missus :oops: but (agricultural) sawah ownership sounds almost to good to be true in investment terms on returns alone. She says up to 3 beras crops a year are possible let alone cultivating other types of produce (a lot of Bali's vegetables actually come from Java FYI). A couple of Indo mates who work as deckhands here in Oz back this up an they're solely working here to save their coin to buy sawah 'back home'. I guess the best result from our perspective is it will be a good source of employment (plus something constructive to do :twisted: ) for our family in the kampung.

    Economics aside, it sounds like a whole lot of fun and a bit of a novelty to actually own rice padi (maybe I could actually set up a decent fishin' hole 8) . Besides, now that the missus has the idea inside her head its a foregone conclusion anyway :lol: . Would be interesting to hear peoples thoughts.

    Catchya
    Adz
    Insert puerile cheese comment here.

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    Insane Poster gilbert de jong's Avatar
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    Default Re: Buying Sawah

    Hi Adam,
    I will share the little knowledge I have on this subject, and I hope it will help you :).
    The reason for me to have bought the sawah, was because it (the land) is below my house, and if someone else would buy it and build there...then my view is gone.

    I dont know how things work on Java, but here in my neighboorhood the land is being worked on by people who live in the village...what I mean is that I dont think that 'outside the village workers' would be appreciated by the local farmers. So I think if that sawah you are interested in is not within your village-area it would be somewhat inapropriate to have your family work there. Unless maybe if your family not only works your land, but join the other workers and help them too with harvesting and planting.
    About the finances...I don't pay any wages or have any expenses (fertilizer and such), whatever comes of the padi 50% is for the villageworkers and 50% for me. Their beras (rice) goes in big sacks to a koperasi where the get money for it. I have chosen to receive my 50% as rice. Saves me having to go to the shop and buy rice, hahaha.
    She's right about the three times per year harvesting, but only if you only do rice. you can ofcourse mix it up...two times rice, and one time corn for example...but changing it up means alot of work.
    back to finance again...return on investment, depends ofcourse what the initial price per are is, and how much beras per harvest comes of the land. by the way if it's not to forward of me to ask, how much is the price per are in your area? Anyway's in your calculation you can use aprrox. 500 kg of rice (finished product) per harvest per 100 Are of padi.
    If you want a bigger return on investment I would suggest growing clove.
    Friendly greetings...Gilbert.
    Words like luck, chance and coincidence were invented to express the known effects of the unknown causes. (Voltaire)

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    Addicted mimpimanis's Avatar
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    Default Re: Buying Sawah

    I dont have any experience of buying sawah myself but I know a freind of mine who bought sawah for her long term partner - partly so the family could work the fields and have an income.. found the family reluctant to do so. With a member of the family owning the sawah it was below them, to work on it. The result that the peole that did work it got their 50% and my freinds family managed to finish of the remaining 50% pretty much themselves. Not much was sold and there was no profit. But at least the whole family was kept in beras. :lol:
    http://www.mimpimanis.com/

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    Insane Poster Jimbo's Avatar
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    Default Re: Buying Sawah

    3 crops a year is the max. Depending on area, availability of water, irrigation etc. Best plan for two. The again it depends on type and quality of rice grown. On my farm I would not say it was an extremely profitable crop because it is very hards work.

    Cloves, coffee and chocolate are far more profitable. Think twice and buy once is my advice.
    Regards Jimbo

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    Regular Adam's Avatar
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    Default Re: Buying Sawah

    Hi Gilbert, Mimpi Manis and Jimbo, thanks for the replies.

    Hmm, interesting Gil, your info seems to back up what everybody else says and it indeed seems like a pretty good investment. In our district in Jawa Timur, we'd be looking at around 110 juta for a hectare of sawah. I'm guessing that this is probably far far cheaper than Bali prices. Although as farmland it is exceptionally good, the area certainly aint high on the desirable places to go list for tourists :D . I think our area is particularly good because we lie at the base of Gunung Raung and water is in no short supply and as opposed to Bali, the land is far flatter and easier to work.

    With a member of the family owning the sawah it was below them, to work on it.
    Most of our family members are rice field workers anyway so having their 'own' to tend to would make them quite proud I think. I have one brother in law who is a brick maker and another brother in law who raises ducks and they would jump at the chance to assist I think. Just about all the girls in family work the rice fields (apart from the smart ones that took off elsewhere :lol: :lol: :lol: ) and slave away for 15 ribu a day (Javanese villagers can be bloody hard workers). The deal would definately be a 50/50 split with the family so we don't have to worry about anything and the land would be in my sister in laws name to avoid any angst from the locals that the 'white devil' in the kampung is buying all the land. To be honest, I don't sense the same strong connection to 'their' land amongst Javanese in the same way that Balinese are so sensitive about 'their' land. Javanese seem to be more business minded and treat land the same as any other tradeable commodity. Having said that I'm sure the Kepala Desa might have something to say if any one person tried to buy the entire district....Workers are pretty nomadic there too, with a fair bit more mechanization present than in Bali.

    At the end of the day, I guess one has to remember that irrespective of the crops, it's all real estate and a potential legacy to the young 'uns in the family. It's the lil' Ladies money anyway and she's adamant thats what she's spending it on. In the mean time, if the returns keeps me in 'free' bintangs, it sounds like a good deal to me :lol:

    Regards
    Adz
    Insert puerile cheese comment here.

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    Default Re: Buying Sawah

    Hi Adam

    My husband and his family have sawah in the same area, they work in the ricefield themselves as well as paying local labourers at harvest time. I am not sure of any figures on original investment prices as they have owned it for years, but I know they keep enough for their own use and then sell the rest. Mother in law also grows vegetables near the top of the rice field for their own use. Father has chickens and sometimes ducks and geese, raises them and then sells them. They certainly view the sawah as a good investment. I will ask re number of crops per year and costs etc and let you know.

    Regards to you and your wife,
    Toucan

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    Default Re: Buying Sawah

    Hi Again Adam

    Got some info re costs etc for you. I hectare of sawah in our area which is not so far from you costs around 200 juta, but this does depend on the amount of water in your area, a bit dryer would cost slightly less. The land measurement for sawah in Java is bahu, 1 hectare = 1.25 bahu. It is also possible to rent sawah.

    They usually do 2 harvests per year, it is possible to do 3 however those who do the 3rd harvest usually find that all the pests in the area head to that crop as it is the only crop for them to feed on and the yield is lower. Generally everyone in the area plants and harvests twice a year and at the same time and basically the pests get shared around.

    Cost for labourers at harvest time is around 25,000rp per person per day, the threshing machine costs around 5,000rp per 100kg bag. You also pay for people to transport the beras to the nearest road, so closer to the street less transport costs which means sawah in close proximity to the road also cost more. At harvest time you also need to pay a small amount of tax for irrigation. You also hire the water buffalo as required - sorry no idea on water buffalo wages :lol:

    My husband advises that sawah is a good investment, not only for the recurrent income from the rice but also in capital gains. As an example, he bought a couple of 1/4 hectare plots about 10 years ago which cost 17jt and 18jt respectively, they are now worth at least 50jt each. The income from 1/2 hectare should be enough to keep a family of 4-6 people for average basic daily expenses and kids schooling etc, but not enough to send your kids to university. He also said sawah is a better investment option than land. Of course the foreign ownership laws also apply to sawah.

    Hope that helps and hopefully one of these days we run into each other in the main street and get to say hi in person.

    Regards
    Toucan

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    Insane Poster Jimbo's Avatar
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    Default Re: Buying Sawah

    I have 20 Hectares of land of which 4 Ha is Sawah. On paper it is mine/Marias, given by my father in law 26 years ago. I could never sell it however as it is and will always be family land used by the family for the family.

    At the moment my brother in law works it and my mother and siter in law also share in any profit. I get free rice and some veg. when I am home. but could have all if I worked it...hardly likely :D
    Regards Jimbo

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    Regular Adam's Avatar
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    Default Re: Buying Sawah

    Hi Toucan,

    Thanks for your reply, regards to you and your husband also and sorry for not yet having the opportunity to catch up, whether it be in WA or Genteng. Life is flat out for me at the moment with work commitments and being in the middle of building a monstrous great gin palace on the side of the hill up here in Gero that will no doubt keep me poverty stricken for far longer than I care to imagine :cry: . Ani and I were meant to be going back home in a fortnight but a workmate went and broke his hand so that counts me out dammit, at least Ani will have a peaceful holiday now :mrgreen: .

    I hectare of sawah in our area which is not so far from you costs around 200 juta
    Hmm, spewin, I figured sawah should normally cost abit more than the 110 juta my sister in law quoted for hectare that was sold in our area recently, though the people that were selling it were desperate for money and it sold within 2 days. Ani's leaving a big wad of cash behind this time with her sis' to grab any opportunity that may arise. Another little scheme that seems to be interesting also is rather than purchasing sawah outright, becoming somewhat of a loan shark and lending money to those who need it while they pass over control of their sawah as security, during which time one can go ahead and work the land as if it were your own. I'm sure similar schemes exist all over Indo and it is organised thru the Kepala Desa / Banjar (or whatever a banjar is called in Jawa Timur - have never thought to ask that question before) so no funny stuff can go on.

    Oh well, it certainly sounds very positive as i'm sure the demand for rice in Indo certainly isn't going to dry up any time soon :D . I'm just happy to see Ani fulfill her dream of sawah ownership as there is no way she would have acheived it in Indo. Who knows.....one day Genteng might be the new Kuta and be worth an absolute fortune ha ha ha :lol: :lol: :lol: .
    Somehow I doubt it........

    Regards
    Adz
    Insert puerile cheese comment here.

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    Addicted mimpimanis's Avatar
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    Default Re: Buying Sawah

    Adam.... that reminded me that my freind didnt purchase the sawah - but did exactly what you were saying. She lent someone money for a period of 10 years against the sawah. The loan is interest free but if they dont pay it back after 10 years the sawah becomes hers (or rather her partners) Meanwhile she has use of the sawah.

    The other side of the coin

    My brother in law has done exactly the same against some family land (coffee crop) in Sepang. It is unlikely thet he will ever repay the loan and this has caused quite a bit of trouble within the family, who see it as family land.
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