Understanding and Avoiding Agribusiness Scams

Investment scams are not something new. It is the same Ponzi scheme repeated over and over again with new names and new structures. Some of the reasons why it has proliferated so much nowadays are due to social media and the ease of sending money.

Last month I wrote an “Investment Scam Checklist”. Now early this month, the Securities and Exchange Commission (SEC) issued another warning advisory to the public against 50 firms.

Today let’s focus on agribusiness scams. In an article written by the Philippine Center for Investigative Journalism (2008) detailing the history of investment scams in PHL, the first recorded investment scam in the country was an agricultural base scam. At the time, the rate of return offered was about 60% per year,  now compare that to today’s “double your money in 60 or 90 days!

Link reference: https://pcij.org/stories/beware-of-those-false-profits/

Let’s make things clear, Agribusinesses are legitimate ways of making money. However, these agribusiness scams of today are taking advantage of that, and the devil is in the details.

Raising poultry or pigs, and selling them is not a scam. You buy, grow and then you sell the livestock at a higher price based on the market economy (supply and demand). Therefore, sales or income will fluctuate.

For those people inviting you to double your money through agribusiness, this is simply impossible. WHY? Because you are dealing with living animals. Sure, in theory, and computation it is possible. The business model works. BUT, there’s a lot of factors involved. Like humans, animals get sick or even die. If they get sick, the animal (for example a pig) will weigh less, and therefore will sell lesser compared to a heavier and healthier pig.

For an agribusiness to GUARANTEE DOUBLING YOUR INCOME means that they can precisely raise pigs or poultry (without sickness & deaths) and sell them all at the same price. WOW, kayo na ang perfect!

TYPICAL DEFENCE for the Agribusiness Scam

“Naa silay SEC, DTI, Biz Permint..etc.”
These are mere registration for trade names and permits to operate a business. By law, to sell or solicit investments from the public needs SEC Secondary License.

SCAM ang Bangko, gamay ra ilang return, amoa GUARANTEED!”
It is ILLEGAL and UNLAWFUL for any entity to guarantee any rate of return for any Investment being solicited.

“Nangbully raka, crab mentality, dika ganahan makatabang ug laing tao!”
How much in taxes did they/you pay? Any profits derived from any Investment is subject to taxes to be withheld and remitted to the BIR. If they are legitimate, did they give you withholding forms when receiving payouts or interest payments? Failure to do so will make you liable for tax evasion!

"Scam Diay Ni Nga Naa May Payout?"
It's not the beginning that's scary or even the middle, it's the ending. Some people even resorted to killing themselves when the scheme collapsed.

Teacher kills self after losing all his money in scam (2012): https://globalnation.inquirer.net/56146/teacher-kills-self-after-losing-all-his-money-in-scam

Many people don't realize that they are just one step away in this direction. Although not all we really don't know how someone will react and also how deeply they are invested in.

Think of building wealth like planting a tree. It takes time and sufficient care to make it bear fruit.

"Investment is most intelligent when it most business-like." - Benjamin Graham

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Understanding and Avoiding Agribusiness Scams Understanding and Avoiding Agribusiness Scams Reviewed by Vernon Joseph Go on Tuesday, June 11, 2019 Rating: 5

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