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Home » Reader question » Reader question: Do Thai farmers get a fair price for their rice?
Dear readers,
What is true? Here in the Netherlands, a star advertisement from the Plus supermarkets regularly passes by on TV, they claim that rice farmers in Thailand get a fair price for their rice.
Didn't I just read on Thailand blog that they get very little for their rice?
Regards,
Henk
I think if it's rice from the Fairtrade label then yes.
Fairtrade is a commercial organization that earns big money, just like Max Havelaar.
Check it out.
The big coffee sellers are accused of squeezing the coffee farmers and making huge profits.
Max Havelaar says he pays the coffee farmers better, but the coffee is also considerably more expensive.
The conclusion may therefore be that Max Havelaar earns no less than Douwe Egberts on a pack of coffee and probably even more.
After all, the price of a pack of coffee is only a small percentage of the price of the beans.
Your reasoning is flawed. If you have the figures about purchasing, storage, transport, production and sales you can make a reasonable assumption about this, now it is purely your opinion.
The conclusion I draw is that you pay more at Max Havelaar and that the farmers benefit from the extra. I don't think you can draw any other conclusion without knowing the compensation per kilo.
Seems like an empty advertising slogan from Plus to me. This supermarket will not have contracted its own rice farmers and, like others, will buy the rice collectively without paying a higher purchase price.
It is evident that Max Havelaar's business model strives for added value (profit), just as Douwe Egberts does. It is more interesting to know what happens to those profits.
What is reinvested? What benefits producers, end consumers, intermediate actors, etc…
The question is: Will Max Havelaar's coffee farmers get a better price? Do Plus Supermarkets' Thai rice farmers get a better price?
If that is indeed the case, the consumer decides what this is worth to him.
Only reporting on "earning big money" is misleading. Unless you assume that the Max Havers of this world can function outside the free market economic system. They have never even been that naive 🙂
My wife's family lives in Isaan and grows rice and I was also surprised by the advertising of the plus and ah. The farmers received 4 Bath per kilo in April, which is well below cost price.
Doesn't surprise me at all.
All those institutions or supermarket chains are even more Catholic than the pope.
I think you can analyze the price of a pack of coffee as we all know what the petrol costs per liter and which denominators have been devised to arrive at that crazy high price.
But I think the 4 baht / kilo mentioned is very outrageous.
LOUISE
I would like to see a scale showing what the retail price goes to where. I know a supplier in Thailand of Faitrade products: what goes to the farmers more than usual... is a joke
What is a fair price? Is 15 Baht per kilo a fair price?
Unfortunately, the farmers in Isaan do not receive a decent compensation for anything. the great profits cling to the fingers of wholesalers and intermediaries. Cooperatives are not known or distrusted. Livestock and slaughter are also often sold too cheaply and there is a lack of proper supervision. But it is beautiful and the people are warm and hospitable.
Regards,
Martin.
This also applies to the (rice) farmers in areas other than Isan, who have the same problems.
If a farmer has 100 chickens, the cost of an egg may be 10 Baht, with half a million chickens that cost may drop to 3-4 Baht, it is exactly the same with rice, he has 1 rai of rice and must If the whole family harvests manually with the entire neighborhood and family, the cost may be 10-15 Baht, if the best man has 100 rai and a combine to harvest, the cost drops enormously.
That is why I do not understand why the Thai farmers do not do as the Dutch farmers did 40 years ago and set up a cooperative and jointly buy a combine and jointly use and maintain it.
This is how it goes the same worldwide and small farmers will have to work at cost price and will slowly but surely succumb to their backwardness in the economy.
well….the first cooperative in the Netherlands, founded in 1853 in Zeeuws-Vlaanderen, had a wonderful name; UNDERSTOOD SELF INTEREST.
This advertisement is pure deception. the Thai farmer is dependent on buyers, who then offer it to a freight forwarder or the government. Ultimately, there are only a few very rich and powerful forwarders who determine the entire rice market in Thailand, including purchasing and selling prices. So there is not a single farmer in Thailand who can even make a profit, so definitely not getting a fair price.
The advertising code committee should intervene here with a hefty fine.
Of course, Plus does not conclude contracts with individual farmers, but with cooperatives, to which farmers can join.
I suspect - but I don't know - that the Thai farmers will not easily transfer their freedom and stubbornness to a cooperative, which after all entails not only rights but also obligations.
And even if such a cooperative can give a better price than the market price, the question is whether the Thai government will throw a spanner in the works by subsidizing things again. I mean: If you get 15 baht from such a cooperative instead of the market price of 10 baht, while you have to work in an environmentally friendly way and pay your staff properly, that can be interesting. But if the government buys up all the rice produced for 13 baht by way of 'aid', or supplements the proceeds to 13 baht, then you have had to work too hard for an extra two baht, and you have incurred more costs than the farmers who 'just some messing about'.
I'm generally quite skeptical of these kinds of 'charity organizations', but I'll give them the benefit of the doubt for now.
.
I also came across a blog including a video on this subject, and the blogger has at least had a nice trip.
.
https://beaufood.nl/video-met-max-havelaar-en-plus-supermarkt-op-rijstreis-door-thailand/
.
The loose video:
.
https://youtu.be/LCmJdwAuuk4
.
It is not an in-depth documentary, but precisely because of its relative triviality it is also informative.
I know from experience that rice producers in Pichit, Phitsanulok, Sukothai, Uttaradit region have only set up cooperatives. However, most rice farmers continue to produce for their own account on a relatively small area, often even (partly) on leased land.
The areas per company seat also systematically decreased over the years, mainly under the influence of Thai inheritance legislation. When a manager dies, it often fragments within the family. Those who still want / have to continue "farming" must rent from relatives. This usually leads to situations and (even more) unprofitability.
Furthermore, overindebtedness in farming families means that control over the most important means of production – land – is increasingly being lost.
The fact that prices for rice have plummeted, partly due to poor government policy, is pushing up the debt ratio among farmers.
A few years ago my Thai brother-in-law got 10 baht for a kilo of rice, recently it was 5 baht. He was able to save his company from collapse by diversifying in time. Partly switched to vegetable growing and fish farming. This allows him to keep his head above water.
Just last week we received an “interesting proposal” from a member of the board of directors of a sugar factory in Sawan Khalok. He knows my wife from high school and thanks to Facebook they "found" each other after years. He proposed to give him a minimum of 1 million baht. He borrows the money from farming families. He knows many of them in the wider region through his job in the sugar factory. The need for capital is high among those farmers. He predicted a net return of 2% per month. Risk-free because the farmers' Chanoot is registered as a mortgage at the land office, directly in my wife's name. How much he still “grabs” is not clear to me.
One man's bread is another man's death. It goes on inexorably. Buddhism does not soften. It's just a patch to keep up appearances.
After the “political” rice debacle, I had expected (hoped) that there would be government incentives to develop bio-energy. There was raw material. A great opportunity was up for grabs. But giant stocks experience spoilage for the rats and mice in the giant warehouses. The large gray buildings in the middle of the rice fields stand today as silent witnesses of the political conceit and socio-economic misery in rural areas.
Every time I pass a large gray-colored rice warehouse on my way from north to south, I think of a giant coffin of the once-vaunted Thai rice culture.
The large gray mastodons contrast in the landscape. They have something surreal.
Perhaps they mark the end of an era in the Land Of Smiles.
The comparison with the giant sarcophagus of Chernobyl is not even far off.
The advertising code committee should ask Plus markets to demonstrate that Thai farmers are indeed getting a fair price for their rice.
If Plus markets cannot prove this, they should remove the remark from their advertising and otherwise be fined for every time they use that remark in their advertisements about Thai rice farmers.
That is possible, but then someone will have to submit a complaint to them before they will take action, so what are you paying attention to, go ahead.
https://www.reclamecode.nl/consument/default.asp?paginaID=0