Back to 2008: I Helped My Dad Become the Richest Man

"Want to expand further?"

When Luo Xiyuan brought up expanding production again at a family meeting, Luo Xinde felt a headache coming on.

"Xiyuan, it's not that Dad doesn't want to expand. Look at our farm, the second phase of construction has just been completed, where else can we expand to? The land for the primary school is already fully utilized, we can't exactly raise pigs on the playground, can we?" Luo Xinde shrugged.

Li Minxia also said, "Yes, if we build another pigsty, we'll have to find new land. That means we'll have to apply to the village again, and it'll cost a lot of money. We've made some money now, but we can't afford to go through that kind of trouble."

They were talking about real-world problems. Land is a major bottleneck restricting the development of farms.

"Dad, Mom, this time we're expanding, we won't build our own pigsty." Luo Xiyuan shook her head and then came up with a solution that surprised everyone.

"We'll have the villagers help us raise pigs!"

"What? Let the villagers raise them for us?" Luo Xinde and Li Minxia were both stunned, and even Grandpa Liu, who was drinking tea nearby, looked up.

"Yes." Luo Xiyuan walked to the blackboard, picked up the chalk, and began to write and draw. "My idea is that we should establish a cooperative farming model that combines a company and farmers."

"Specifically, our Roche Farms, as a company, is responsible for providing three things: First, high-quality piglets. Second, our scientifically formulated feed. Third, Grandpa Liu's full-process technical guidance and disease prevention support."

"The farmers in the village who are willing to cooperate with us only need to provide the venue (such as their own vacant yard or old house) and the daily labor for raising livestock."

"Once the pigs are fully grown, our company will purchase them at a pre-agreed guaranteed price. This guaranteed price will definitely be higher than what they can get if they sell them on the market themselves."

"In this way, farmers can simply raise pigs without worrying about the hassle of buying piglets, preparing feed, or finding sales channels, and they can make a steady income."

"And what about us?" Luo Xiyuan drew an arrow pointing to the word "company." "With less investment and in a shorter period of time, we can expand our breeding scale several times over and solve our production capacity problem!"

This company-plus-farmer model is a very mature model for agricultural industrialization in the future. But in the small rural village of 2009, it was simply a pipe dream for Luo Xinde and his team.

"This...is this really going to work?" Li Minxia was the first to raise the doubts. "Let others raise them for us? Are those pigs still our pigs? What if they don't feed them properly and they become thin or sick? Or what if they see the price of pork is good and secretly sell the pigs to someone else? Who can we complain to then?"

"Exactly!" Luo Xinde also thought it was unreliable. "You can't judge a book by its cover, Xiyuan. There are so many people in the village, you don't know what kind of people they are. Some families are too lazy to even farm their own land, do you expect them to raise pigs properly for you? When problems arise, there will be a lot of disputes."

Grandpa Liu pondered for a moment before speaking: "The girl's idea is good, and the direction is correct. Relying solely on our own, we certainly can't grow a large operation. However, what Xinde and Minxia are worried about is also a big problem. Pig farming is a technical job, and you can't be careless at all. Especially with disease prevention, if one family has a problem, it could affect a whole bunch of people. This risk is difficult to control."

Luo Xiyuan listened calmly to her family's questions, clearly having already considered these issues.

"Dad, Mom, Grandpa Liu, I've thought of all the issues you've mentioned. Therefore, we must have a strict set of contracts and management systems to regulate them."

She picked up the chalk again and wrote a few lines on the blackboard.

"Sign a contract. All farmers who are willing to cooperate with us must sign a legally binding cooperative farming contract. The contract must clearly stipulate the rights and obligations of both parties."

"For example, they must strictly follow the feed and technical solutions we provide, and cannot add anything on their own. We have the right to send someone to inspect at any time. If any violations are found, we have the right to terminate the contract and pursue their economic losses."

"We don't just provide piglets and feed; we also provide management."

"Grandpa Liu is our chief technical consultant. We can hire one or two more experienced veterinarians to form a technical service team, which will be divided into sections and will regularly visit the cooperating farmers to provide guidance, check the health of the pigs, and supervise them to do a good job in disease prevention. If any problems are found, they will be resolved on the spot."

"Another point is the alignment of interests." Luo Xiyuan's tone became serious. "The purchase price we offer is linked to the quality of their pigs. For example, we set a standard weight and lean meat percentage; if they meet the standard, we will purchase them at the guaranteed price."

"Those who exceed the standard receive an extra bonus. Those who don't meet the standard have their pay deducted accordingly. In this way, in order to earn more money, they have to find ways to raise pigs well, which aligns with our goal."

"As for whether they will secretly sell the pigs to others," Luo Xiyuan smiled, "that's even easier to handle. The piglets we provide are all of our own farm's superior breeds, and they all have our Luo family ear tags on them."

"Furthermore, the purchase price we offer is already higher than the market price, so it's not worthwhile for them to sell it to others. As long as we have a good reputation and pay on time, why would they go to the trouble of going to such lengths and taking that risk?"

Luo Xiyuan has made thorough considerations regarding everything from legal contracts and unified management to the binding of interests and brand identity.

She explained a supply chain management plan to her family in simple and easy-to-understand language.

Luo Xinde, Li Minxia, ​​and Grandpa Liu listened in stunned silence. They realized that the depth and breadth of their daughter's thinking had exceeded their expectations. The problems they had worried about seemed to have solutions in the face of the system she had designed.

"This...this means they've all become branch factories of our farm, and we're the main factory?" Luo Xinde finally began to understand.

"Dad, your analogy is very apt." Luo Xiyuan nodded with a smile. "That's exactly the point. We provide our brand, technology, and management, while they provide their facilities and labor. We share the risks and the benefits."

"I...I still feel a bit uncertain." Li Minxia was still unsure; she was someone who preferred to play it safe.

Luo Xiyuan walked to her side, took her hand, and said, "Mom, I know you're worried. But think about it, that's how business is; if you don't move forward, you can only move backward."

"Right now, our main problem is that we don't have enough pigs to sell. Our stores in the county town are out of stock every day, and Manager Wang from Jinhaiwan has urged us several times to increase the supply."

"If we don't seize this opportunity and scale up, these markets may no longer be ours once others realize it."

"We have money, technology, a brand, and a market; all the conditions are excellent. Why don't we seize this opportunity and make a big splash?"

Luo Xinde was filled with enthusiasm. He could almost see every household in the village displaying a sign indicating they were a cooperative pig farmer with Luo's Farm, and hundreds, even thousands, of pigs being transported continuously from their village to all parts of the county and the city…

What a magnificent sight that would be!

"Go for it!" He slammed his hand on the table. "Xiyuan, Dad supports you! If this succeeds, our Luo Family Village won't be Luo Family Village anymore; it'll have to be renamed Luo Family Pig Village!"

Grandpa Liu stroked his beard and burst into laughter: "Great! This is a great idea! These old bones of mine can still keep going for a few more years! I'm definitely taking on this chief technical consultant role! I'll take care of all the pigs in the village!"

Seeing that both men in the family had expressed their opinions, Li Minxia sighed and could only nod: "Alright. You two are both crazy, what else can I say? But I'll make this clear from the start: the accounts must be settled. There must be records of how many piglets and how much feed each family received, otherwise it will definitely end up being a mess."

"Mom, don't worry." Luo Xiyuan smiled, "Our farm's future CFO, this is definitely no problem for you."

"CFO? What's that?"

"That's the CFO, the big boss who manages the money!"

"Get lost, all you do is try to make me happy," Li Minxia scolded, but a smile crept into her eyes and brows.