Thai rice no chance on the world market; unless…..
Thai rice has no chance on the world market for the next 10 years unless production costs are reduced by using less fertilizer or granting a 20 percent subsidy on the costs.
Since 2004, production costs have risen from 4.835 baht per rai to 10.685 baht as a result of which Thai rice has become too expensive and the share of Thai rice in the world market has fallen from 13 to 8 percent. Productivity remained stuck at 450 kilos per rai during that time, while Vietnam managed to increase it to 1.200 kilos per rai.
This gloomy picture is drawn by the Center for International Trade Studies of the University of the Thai Chamber of Commerce in a report, which calls for a thorough adjustment of the production process.
Changes are needed in the field of agricultural method, the agricultural area, rice varieties and water supply. Without these changes, the study center expects Thailand's competitiveness and export value to further decline.
This year sees a small ray of hope as the country is rapidly getting rid of the rice stock of 15 to 18 million husked rice built up by the previous government over two years. As a result, the price of Thai rice is now approaching that of Vietnam. Over the past decade, Thai rice has cost an average of $100 to $200 more than competitors such as Vietnam.
Nipon Poapongsakorn, a fellow at the Thailand Development Research Institute, advocates market research. "That's top priority. Then we can identify which types of rice are sought after by buyers and how the entire production and supply chain can be improved. It is also clear that quality criteria must be set.'
In the first seven months of this year, Thailand exported 5,62 million tons of rice, an annual increase of 55 percent.
(Source: Bangkok Post, Sept. 24, 2014)
Photos: A rice farmer in Kong Krailat, Sukothai, is accelerating his harvest after the Yom River overflowed its banks.
Despite the high price, I mainly find Thai rice in Dutch (Oriental) supermarkets. Bought 2 bags of Thai rice yesterday, Jasmine/Pandan rice, the price was (offer) € 6,50 for a bag of 10 lbs. Delicious rice!
What is it with those figures in the Bangkok Post? Production costs over 10.000 baht per rai (!), yield about 500 kilos per rai, on the world market that yields about 7.000 baht, that's a loss of 3.000 baht! So those production costs are not correct.
My son leases a piece of rice land of 6 rai, now, after irrigation, two harvests a year. Yield per harvest about 40.000 baht, one third is for him, two thirds goes to the tenant, and the tenant says that about half of his share is production costs, which is 2.000 baht per rai. These are average, realistic numbers.
@ Tino Kuis Looked up a few figures to supplement.
How many production costs are incurred per rai on average?
According to the article 'Rice farmers poorest in Asean', production costs in Thailand are on average 139 percent higher than those in Vietnam and 37 percent higher than those in Myanmar. (Source: Bangkok Post, February 26, 2014)
How much costs does a farmer incur per rai on average? What do they consist of?
The production cost per rai is 4.982 baht. Of this, 16 to 18 percent is spent on chemical fertilizers. (Source: Year-End Review, Bangkok Post, January 2, 2013)
Other sources mention amounts of 8.000 to 10.000 baht.
How much income is earned per rai on average?
The income of a 'leading Thai farmer' is 1.556 baht per rai, compared to 3.180 baht in Vietnam and 3.484 baht in Myanmar. Rice is harvested three times a year in Vietnam, twice in Thailand and Myanmar. (Source: Bangkok Post, February 26, 2014)
[I don't think it's right. In Thailand, non-irrigated areas harvest only once a year.]
How much rice does a rai produce on average?
Different numbers: 450 kilos, 424, 680, and so on
According to an October 2012 US Agriculture Department report, the average yield per rai in the 2012-2013 season is estimated to be 459 kilograms per rai, much less than Vietnam's 904 kilograms. That volume roughly corresponds to the average of 445 kilos in Laos and 424 kilos in Myanmar, two countries where rice cultivation is primitive compared to Thailand. Vietnam pays close attention to the availability of multiple varieties of rice. (Source: Year-End Review, Bangkok Post, January 2, 2013)
@ Tino, I can see that your son is smart and that with nothing to do on that land he earns the same as those who cultivate it.
He and you have been granted it, by the way, we have 30 rai here and this is rented out at 1000 bath per year, let's talk about it!
My wife owns some rai rice fields in mae nam nan valley. All easily accessible by land transport, located on a paved road or in the vicinity of it. All with irrigation, so that harvesting can be done three times a year. Accessibility (also in the rainy season) and irrigation are major determining factors for rice fields.
Until a few years ago we rented out the fields. Rental price per rai and per harvest was 1000 bath. On an annual basis, the rental income amounted to 3000 baht for plots with irrigation located next to or near a paved road.
We have not rented out for the past 2 years. A friendly family from the village has since done the lion's share of the work on my wife's land and the net proceeds are shared 50/50. Other production costs are shared 50/50 between both families.
The befriended family works the land with their motorcycle cultivator, fertilizes (partly labour-intensive organic, partly chemically), provides seed and/or planting material, takes care of water level management, and takes care of the pesticides. Almost exclusively insecticides and fungicides. Rice cultivation requires hardly any herbicides, provided that water level management is optimal. My wife bought a brushcutter last year for verge management around the fields. Slugs that cause a lot of crop damage are usually collected by hand by both families. They are eaten as a spicy Thai variant of the French escargot. If the dominance of snails in the fields becomes too great, chemistry is involved. Fish, predominantly Pla Chon (snakehead) is also caught in the rice fields by both families. The Pla Chon is also very much appreciated by me.
Harvesting is done against payment by a contractor with a rice pecker.
One rai yields 600 to 620 kilos of rice per harvest. The last harvest at 6 bath per kilo. Before the rice support program was blocked, it was 15 baht per kilo. Directly for the self-producing farmer, not for intermediaries and rice mills.
A rai on which very efficient rice is grown currently yields between 3600 and 3720 baht per harvest. A few mistakes and a little setback means that the yield is a lot lower.
And Bangkok Post's expert rice farmers claim in their Year-End Review that the production cost per rai (per crop? or per year?) is 4.982 baht.
In the villages of rural Thailand, everyone has known it for a long time: They didn't shut down Bangkok. They just pushed rural Thailand back into poverty again.
And especially watch and listen carefully to the “Bringing happiness to the people” talk by El Generalissimo op den thorathat.