Buying the potential harvest of a fruit tree

[Alexandoy]

You may be surprised by this kind of transaction in the farm or orchard. I think in the US they call it “futures” to mean farm products to be harvested in the future. Anyway, the topic is about buying the harvest of a tree once it bears flowers. One example is a mango tree that is common to be bought when the flowers start to turn to small fruits.


The buyer would make an estimate of how many mangoes will be harvested. He will price one mango as 1 peso. When that mango grows and is harvested it can be priced at 20 pesos in the market. The buyer will also deduct 20% from his computed total for the people he will pay to harvest the fruits. Let’s say the investment is 1,000 pesos but the gross sales when harvested would be 20,000. That’s quite a big profit although the actual figures would be around 15,000. This kind of investment is popular in orchards.

 

[Mika]

For the farmer, this kind of arrangement can be considered very fruitful because it does not matter when fruits are destroyed by natural disasters like wind, hailstone, etc. However, the buyer might suffer badly when fruits are destroyed. Furthermore, the buyers also have to take the responsibility of safeguarding fruits from thieves, and pests.