Why do Thai farmers remain poor?
Why is it still bad for the Thai farmer, despite the fact that Thailand has long been the world's largest exporter of rice?
Every politician has his own “policy” to improve the lot of our farmers, but nothing seems to have worked. All political parties talk about their “ultimate solution” to raise the living standards of the backbone of the country, but our farmers remain the poorest in society. Study after study has been conducted by top Thai academics. It seems that no aspect of our farmers' problems has been overlooked, but to the average farmer it seems that the more things change in society, the more things stay the same for them.
Do we know the causes of our farm poverty? Apichart Chongsakul, secretary general of the Bureau of Agricultural Economics, has extensively summarized the reasons for the fate of the Thai farmer. At the heart of the problem is the monopoly of the entire agricultural process – from the market for inputs such as chemical fertilizers, insecticides and seeds to the final sale of rice. When the price of rice rises, the fertilizers also become more expensive, for whatever reason. Insecticide prices also go up if it looks like farmers will earn more in a certain season due to a higher price of rice. This means that despite a better price for the rice, the farmers usually do not earn more.
What's even worse is that if the farmer sells his rice to the rice manufacturer, the farmer gets much less than the prevailing market price. The reason is simple: he is simply not in a position to negotiate with the rice manufacturer. As a result, the farmer cannot benefit from the difference between unprocessed rice and white rice. Apichart's conclusion is therefore: "Even if the price of rice skyrockets to 20 Baht per ton, the farmer will not benefit significantly."
Wouldn't the government realize that the state of monopoly at any stage of the rice growing process is the main reason why any attempt to raise the standard of living of the peasants is doomed to failure? Of course, the government is well aware of the existence of this state of affairs, but the lack of political will and the corrupt practices inherent in the padi subsidy and price guarantee schemes have contributed to its inevitable and continued failure.
Farmers get a lot of attention from politicians – not because politicians are serious about ending long-standing, entrenched poverty once and for all – but because they form a block of votes for a good election result. Even worse, the paddy subsidy policies enacted by the most “caring” and “populist” governments – past or present – provide an opportunity for politicians and their associates to pocket taxpayers' money.
An attempt to provide farmers with reasonably priced fertilizers aimed at breaking the monopoly of the private sector in this area has failed miserably. A government agency was set up for this purpose last year, the National Fertilizers Corporation, but it soon became clear that the objective was very laudable, but the implementation, not unexpectedly, got bogged down in bureaucracy. Her demise came as no surprise to anyone in business.
ThailandThe paddy yield per rai is much lower than other rice-producing countries, despite being the world's largest exporter of rice, the main reason being the lack of sufficient irrigated areas. (Compare Thailand's 25 percent figure in this, to Vietnam's 85 percent.) Do the authorities realize this fact? It is an obvious issue, raised in all studies. But when it comes to taking the problem seriously, no government has so far shown any vision to move towards solutions that will deliver tangible results.
Cynics might say that politicians want to keep the peasants poor so they can be easily abused every time an election is coming up. You don't want to believe such a depressing theory, because if you do, it means that you no longer believe in both the democracy and the future of this country.
Editorial commentary by Suthichai Yoon in The Nation December 22, 2011.
About this blogger
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Bert Gringhuis (1945), born and raised in Almelo in the beautiful Twente. Later lived for many years in Amsterdam and Alkmaar, working in export for various companies. I first came to Thailand in 1980 and immediately fell in love with the country. Been back many times since then and moved to Thailand after my (early) retirement as a widower. I have been living there for 22 years now with my somewhat younger Thai lady Poopae.
My first experiences in Thailand as a kind of newsletter sent to family, friends and acquaintances, which later appeared under the name Gringo on Thailandblog. Many, many articles followed those first stories and that has grown into an almost daily hobby.
In the Netherlands still an avid footballer and football referee, but the years are starting to tell and in Thailand still avid, but the pool billiards is really of inferior quality, ha ha!
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Interesting story, Gringo. I assume company size also plays a role, but I haven't come across any numbers on that yet. Well, as you write, about the low yield per rai compared to Vietnam. Furthermore, hardly anything is done about product improvement.
I was on a farm near Udon Thani in November. I was there 6 years ago too. I noticed 2 important changes. There are now many more tractors in the area. This is not possible if no money is made. The second thing that stood out is that much more sugar cane is grown. I was told that this crop yields much more than rice.
The cultivation of sugar cane is often an activity of the sugar cane processing powers. They plant and harvest the plot. The relevant farmer may only supervise and fertilize. Here too, the poor financial situation of the farmers who have little or no money to pay for the planting themselves is being exploited. The peasants are chained with hands and feet.
Interesting piece, solution? I don't know, organizing, better working cooperatives?
the problem is that the only people who can change the system are the very people who make the most of it right now.
they would be crazy...
Indeed, you don't have to be very cynical to assume that the farmers are structurally and permanently exploited. This is also the case all over the world. Those agricultural machines and tractors that are available today are often not owned by the farmers themselves, but they have to rent them.
Here we also immediately have the basis for the political conflict between yellow and red shirts. Who was born for a seluung does not easily become a baht in Thailand. Unfortunately, many do not realize how they are being used and manipulated, otherwise they would not see the biggest con artist, Thaksin, as their hero. And the farmer he plodded on.
Maybe also mention the good things that are there, by the first government Thaksin.
Would probably make your critique more credible.
Definitely forgot what certain groups have been doing here for years.
The sugar that was thrown away by your so praised previous government (could not be processed) and then subsequently bought abroad by the same group and marketed expensively (thus with a lot of profit).
Sometimes forget oil and I can go on like this for a while.
Criticism can also be constructive and indeed the farmer ……………..
Good morning,
Il was in surin about 3 weeks ago. There I spoke with some farmers. Now I am not at home in the agricultural world, but I understood that a minimum price has been issued for rice by this government.
When I referred to this, they started laughing loudly.
According to them, no one there receives that minimum price. This is because the rice allegedly does not meet the quality requirements. There is no point in complaining because then they will have to sell the rice elsewhere.
The buyers then pocket the difference. Very true.
I notice that among these people, the annoyance about the corruption is also increasing.
I think it's waiting for a peasant rebellion leader.
Carlo
my wife's son owns nearly 100 rai in northern thailand.
he had planted maize in 2010.
the government made an offer for a purchase price: 8 THB/kg.
he accepted the offer and sold his harvest to the government.
waiting months; he didn't get his money despite some reminders.
his debts mounted and fixed charges continued,
his working capital was with the government.
after a few months the government announced:
you don't get 8 THB, but 4 THB/kg.
all in all, waited half a year and lost 300.000 THB.
I don't think it's surprising that this fuels aversion to the established order.
the farmers say: everyone is corrupt, but at least Thaksin did something
the poor: health care, anti-drug policy, houses for the poor.
In some projects, too, of course, money was left hanging somewhere, but at least something of the total budget trickled through to the common man.
I mainly only see small farmers around me. Grow mainly for own family and not for sale. Yet these are farmers. In the past, 5 to 10 years ago, 1 harvest was brought in. Everyone had a few cows here, so when the rice was harvested, the cows walked there and provided manure. Now everyone is trying to get 2 harvests. Cows are almost gone and fertilizer is not used. the result is now that 2 harvests yield less than 1 harvest in the past, but the costs are much higher. Plowing, sowing, threshing, etc. is now done twice. I once calculated for my family what the costs are against the yield and that is negative. But as a foreigner, nobody believes that. You cannot have an understanding of rice cultivation. And costs incurred in the past are no longer counted when harvesting has taken place. Then only how many kg. and how much does it cost in the store. Talked to an American expert in rice cultivation. Lives in Bangkok, but works for the government of Laos and Vietnam. Told the thai don't want to be advised by outsiders. Can you do this much better yourself?
Why is my e-mail address still clearly legible for everyone?
please delete.
chris&thanaporn i would like to mention the good things of the Thaksin government, if i knew them. Well, what was good were the promises, very good in fact. Furthermore, I do not praise the previous government at all. They were not there for the farmers, but for the upper and middle classes, so basically for themselves. Thaksin, however, says to stand up for the farmers, but does not. Deception is a neat word for his approach. He is now the richest man in the country. You don't get that from charity to the agricultural class. Strange that if you can choose between just being robbed or being both robbed and cheated, you choose the latter.
@ Dear BramSiam it is not correct what you write. Thaksin is by no means the richest man in Thailand. He is in 19th place: http://www.forbes.com/lists/2011/85/thailand-billionaires-11_rank.html
Perhaps you never heard of the so-called 30 Baht card or “the National Health Service”?
Education under Thaksin 1 compulsory from age 14 to age 16.
If you want more, just say………..
Thaksin is not even the richest man in Thailand.
Take a look at the net worth and property of the owner of :"Beer Chang"
And the rice schedule doesn't come from him either.
Well from the then Director of the Revenue Department.
Delve a little better into the history of Thailand BramSiam
Although Voranai Vanijaka is not a fan of Thaksin, he writes in the September 25 Bangkok Post that Thaksin was the most capable prime minister Thailand has had. Bangkok Fashion City and the Elite Card were a bust, but its economic team was top notch; Otop (One Tambon One Product) and the 30-baht health system a success.
My understanding is that only 1 family controls everything related to rice financially.
Unexpectedly, Westerners also stand up who think that Thaksin was (and is?) a blessing for Thailand, while this man is mainly a divisive person who plays the Thais off against each other, who has enriched himself by first having a law passed that representatives of not have to pay taxes to the government and then sell his company tax-free in a billion-dollar deal. His assets, if it suits him, are suddenly in the name of his wife and his staff and so on. Criminals often arouse admiration, whether they are called Holleeder or Berlusconi or Thaksin. That he is not literally the richest man, I know that and he certainly isn't now. I never claimed that he is responsible for the rice schedule. The 30 baht health scheme may be a success, but it does drive the good doctors out of hospitals to private commercial institutions. For 30 baht you simply cannot offer treatments in the long run.
Bottom line remains for me : “Thai rak Thai” and “Thaksin rak Thaksin”.
But what if they do get enough money for their rice? Then there is often nothing left. Rarely have I seen money disappear as quickly as snow in the sun. Because the average Thai spends what he has fairly quickly and does not know the saving drive of us Dutch people. I wonder why people do this and want to get rid of their hard-earned money so quickly.