Estimates of expenses in establishing a cacao farm in the Visayas
and profits after the fifth year. The size of the farm selected is
16 hectares, the amount of land prescribed by Congress of a single
public land entry. The cost of procuring such a tract of land
is as yet undetermined and can not be reckoned in the following
tables. The prices of the crop are estimated at 48 cents per kilo,
which is the current price for the best grades of cacao in the world's
markets. The yield per tree is given as 2 catties, or 1.25 kilos,
a fair and conservative estimate for a good tree, with little or
no cultivation. The prices for unskilled labor are 25 per cent in
advance of the farm hand in the Visayan islands. No provision is
made for management or supervision, as the owner will, it is assumed,
act as manager.
Charges to capital account are given for the second, third, and fourth
year, but no current expenses are given, for other crops are to defray
operating expenses until the cacao trees begin to bear. No estimate
of residence is given. All accounts are in United States currency.
Expendable the first year.
Capital account:
Clearing of average brush and timber land, at
$15 per hectare $340.00
Four carabaos, plows, harrows, cultivators,
carts, etc. 550.00
Breaking and preparing land, at $5 per hectare 80.00
Opening main drainage canals, at $6 per hectare 96.00
Tool house and storeroom 200.00
Purchase and planting 10,000 abacá stools, at
2 cents each 200.00
Seed purchase, rearing and planting 12,000 cacao,
at 3 cents each 360.00
Contingent and incidental 174.00
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Total $2,000.00
Second year.
Interest on investment $200.00
Depreciation on tools, buildings, and animals
(20 per cent of cost) 150.00
-------
350.00
Third year.
Interest on investment $200.00
Depreciation as above 150.00
-------
350.00
Fourth year.
Interest on investment $200.00
Depreciation as above 150.00
Building of drying house and sweat boxes,
capacity 20,000 kilos 450.00
-------
800.00
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Total capital investment 3,500.00
Fifth year.
Income account:
From 11,680 cacao trees, 300 grams cacao each,
equals 3,500 kilos, at 48 cents 1,680.00
Expense account:
Fixed interest and depreciation charges on
investment of $3,500.00 $350.00
Taxes 1 1/2 per cent on a one-third valuation
basis of $250 per hectare 60.00
Cultivating, pruning, etc., at $5.50 per
hectare 88.00
Fertilizing, at $6 per hectare 96.00
Harvesting, curing, packing 3,500 kilos cacao,
at 10 cents per kilo 350.00
Contingent 86.00
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1,030.00
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Credit balance 650.00
Sixth year.
Income account:
From 11,680 cacao trees, at 500 grams cacao each,
equals 5,840 kilos, at 48 cents 2,803.20
Expense account:
Fixed interest and depreciation charges
as above $350.00
Taxes as above 60.00
Cultivating, etc., as above 88.00
Fertilizing, at $8 per hectare 128.00
Harvesting, etc., 5,840 kilos cacao, at 10
cents per kilo 584.00
Contingent 93.20
-------
1,303.20
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Credit balance 1,500.00
Seventh year.
Income account:
From 11,680 cacao trees, at 750 grams cacao each,
equals 8,760 kilos, at 48 cents 4,204.80
Expense account:
Fixed interest charges as above $350.00
Taxes as above 60.00
Cultivating, etc., as above 88.00
Fertilizing, at $10 per hectare 160.00
Harvest, etc., of 8,760 kilos of cacao, at
10 cents per kilo 876.00
Contingent 170.80
-------
1,704.80
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Credit balance 2,500.00
Eighth year.
Income account:
From 11,680 cacao trees, at 1 kilo cacao each,
equals 11,680 kilos, at 48 cents 5,606.40
Expense account:
Fixed interest charges as above $350.00
Taxes as above 60.00
Cultivating, etc., as above 88.00
Fertilizing, at $12.50 per hectare 200.00
Harvest, etc., 11,680 kilos of cacao, at
10 cents per kilo 1,168.00
Contingent 240.40
--------
2,106.40
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Credit balance 3,500.00
Ninth year.
Income account:
From 11,680 trees, at 2 "catties" or 1.25 kilos
cacao each, equals 14,600 kilos, at 48 cents 7,008.00
Expense account:
Fixed interest charges as above $350.00
Taxes at 1 1/2 per cent on a one-third
valuation of $500 per hectare 120.00
Cultivation and pruning as above 88.00
Fertilizing, at $15 per hectare 240.00
Harvesting, etc., of 14,600 kilos of cacao, at
10 cents per kilo 1,460.00
Contingent 250.00
--------
2,508.00
--------
Credit balance 4,500.00
In the tenth year there should be no increase in taxes or fertilizers,
and a slight increase in yield, sufficient to bring the net profits
of the estate to the approximate amount of $5,000. This would amount
to a dividend of rather more than $312 per hectare, or its equivalent
of about $126 per acre.
These tables further show original capitalization cost of nearly $90
per acre, and from the ninth year annual operating expenses of rather
more than $60 per acre.
It should be stated, however, that the operating expenses are based
upon a systematic and scientific management of the estate; while the
returns or income are based upon revenue from trees that are at the
disadvantage of being without culture of any kind, and, while I am
of the opinion that the original cost per acre of the plantation, nor
its current operating expenses may be much reduced below the figures
given, I feel that there is a reasonable certainty that the crop
product may be materially increased beyond the limit of two "catties."
In Camerouns, Dr. Preuss, a close and well-trained observer, gives
the mean annual yield of trees of full-bearing age at 4.4 pounds.
Mr. Rousselot places the yield on the French Congo at the same
figure. In the Caroline Islands it reaches 5 pounds and in Surinam,
according to M. Nichols, the average at maturity is 6 1/2 pounds. In
Mindanao, I have been told, but do not vouch for the report, of
more than ten "catties" taken in one year from a single tree; and,
as there are well-authenticated instances of record, of single trees
having yielded as much as 30 pounds, I am not prepared to altogether
discredit the Mindanao story.
The difference, however, between good returns and enormous profits
arising from cacao growing in the Philippines will be determined by
the amount of knowledge, experience, and energy that the planter is
capable of bringing to bear upon the culture in question.