“Farmers are the backbone of the nation”, the socio-economic status of the rural population in Thailand
“Farmers are the backbone of the nation” is an old saying in Thailand that still praises farmers to this day. This image is mainly reinforced by a new vision on the economy, which is mainly attributed to the late King Bhumibol: “the economy of enough” (sufficieny economy).
Let us briefly outline the socio-economic existence of farmers in Thailand. Although I usually don't do that, I will make a comparison with Dutch farmers here and there. The 'boring' statistics are at the end of this story, but it is important to go through them.
A short story about farmer Udom
Farmer Udom is 55 years old. He and his wife Fon and daughter Phloy are doing quite well now, but he is looking forward to retiring in about five years.
Thirty years ago, Udom started working as a farmer on a 35 rai rice field (5,6 hectares), which he inherited from his father when he died of liver cancer after a long illness. The village where he has always lived is located about 30 kilometers from the town of Nakorn Klai in the north of Isaan. The road to it is still not paved and difficult to pass in the rainy season.
The past thirty years have been very difficult. Rice cultivation never yielded more than 100.000 baht annually, and even less in the many years of drought or flood. There was no irrigation in his village and the soil was not really fertile. The fields were spread out, sometimes a few kilometers apart. He experimented with new varieties of rice that were better able to withstand drought and yielded more, but that was still not enough to provide for his family. He also tried planting garlic, which yielded some yields for a number of years, but a year of flooding and a collapsed price made him stop. He is thinking of planting soybeans now. His wife Fon runs a small shop, which never yields more than 3.000 baht a month.
For more income, he worked 6 to 8 months a year as a construction worker, first in Bangkok and later also in Nakorn Klai. That brought in the nice additional amount of 80.000 baht every year.
His biggest problem was his debts. He had to borrow 10-20.000 baht almost every year for seeds and chemicals such as fertilizers and pesticides. Ten years ago, the debt rose to as much as 250.000 baht. This was mainly because twelve years ago he had to contribute significantly to the education of his daughter Fon to become a teacher. His debts have now fallen to 100.000 baht because he sold part of his land ten years ago at a price that disappointed him. He further benefited from a small government subsidy. He now rents 10 rai. His daughter now has a job and supports her parents with 4.000 baht a month, so he no longer has to work outside the village for so many months.
He looks to the future with reasonable confidence. In five years he wants to sell the last 20 rai of his land, land in which his daughter has no interest whatsoever. He has and no more debts and maybe have some money left over. He will help his wife Fon in the shop and maybe they will earn a little more. With his daughter's contribution and some government pension, he and his wife think they can manage, as long as no other bad things happen.
The socio-economic philosophy of “the economy of enough”
The late King Bhumibol began in 1994 by unveiling a model of self-reliance for farming in particular, a vision that was promoted with even more force after the financial crisis in 1997. Farmers in small communities should be almost entirely self-sufficient, with mutual could exchange labor and products, but not or hardly with the outside world. This would make them more immune to economic shocks. In that vision, an ideal farm consists of 20 to 30 rai of land, divided into four parts: 30 percent for a pond with water for possible irrigation and fish farming, 30 percent for rice enough for a year's consumption per family, 30 percent for other crops such as fruits and vegetables, and finally 10 percent for housing, livestock farming and other activities.
Both the 2007 and 2017 Constitutions state that the state must follow the philosophy of the 'economy of enough':
Constitution 2017, chapter 75
The State should organize an economic system that provides opportunities for people to benefit from economic growth all together in a comprehensive, fair and sustainable manner and to be self-reliant in accordance with the philosophy of a sufficient economy ('self-sufficiency economy'), should eliminate unfair economic monopolies and develop the economic competitiveness of the people and the country.
I will mention just a few common criticisms of this philosophy: What should the farmers do with the 19.000 cubic meters of soil when excavating the pond? Many farmers indicate that they already do not have 'enough'. Recently, famous stand-up comedian Note Udom joked about this 'self-sufficiency economy'. Charges were filed against him for lèse majesté (see: Bangkok Post – Comic in crosshairs after Netflix show ). Another point of criticism is that there is no money for other expenses, such as maintenance of the house, education for the children and things such as transportation.
The reality of socio-economic life in the villages
In this description I base this description on the source mentioned below (Royal Sufficiency), which tells about farming life in the village of Baan Tiam with 126 households (400 people), a hundred kilometers north of Chiang Mai. The article indicates that the situation there is not that different from that in other villages in Thailand.
In Baan Tiam, 34 percent of households indicate that their own cash crop production is their main source of income. In addition, 30 percent of households cite their work as agricultural laborers as their main source of income. Of the remaining residents, 35 percent have a government job (government projects, teachers, park employees, hospital), 8 percent have income from a store and 18 percent from other businesses. There is also work in construction and infrastructure.
Rice is the main agricultural product. Much of it is consumed by the farmers themselves. Another part is sold or often given away to the villagers. Quite a lot of people are looking for opportunities to exploit other agricultural products: garlic and soybeans were planted the most, but also various vegetables and fruits. Weather conditions and price fluctuations often make it difficult.
Many original inhabitants have moved elsewhere to find a better paying job. Most send money to their relatives in Baan Tiam.
(Editorial credit: pmvfoto / Shutterstock.com)
The figures, a comparison between Thai and Dutch farmers
How many farmers are there in Thailand?
About 30 percent households in Thailand (6.7 million) indicate that agriculture is their main employment and source of income. The average age of farmers in Thailand has increased considerably in the last 20 years: from 45 to 55 years. Young people are not interested in working as farmers.
In The Netherlands its farmers 0,6 percent of total employment. That is now 54.000 households, a decrease from the 100.000 agricultural households in 2000.
Income, debt and subsidies for Thai farmers
The average household income per year for a farming family is 220.000 baht. That is 60 percent of the average income of all households in Thailand, making it one of the lowest income groups. Half of this income comes from agricultural work in the own company, the rest from other activities and money transferred from other sources (family, etc.). The debt burden for all Thai households is high, but it is another 10 percent higher for farmers.
Thai farmers receive 15 billion baht government subsidies per year, which is 2.500 baht per household per year. About 20 percent of farmers have an income below the poverty line of 32.000 baht per year, 30 percent have debts of more than their annual income and 10 percent have debts of more than 3 times their annual income.
The income of an agricultural household The Netherlands is 82.000 euros per year, while the average household income is 48.000. Farmers belong to the highest income group in the Netherlands, 53 percent belong to the 20 percent highest incomes. Dutch farmers receive 836 million euros per year from a European fund, which is 15.000 euros per farming household per year.
Land ownership of Thai farmers
That has fallen drastically over the past 20 years, from an average of 35 rai per household to now 14 rai. About 40 percent of farmers do not have land and are therefore tenants or hired agricultural laborers.
De Dutch farmers own 75 percent of the land they cultivate, 30 hectares (180 rai) per farm with quite large regional differences. Say that a hectare is worth about 70.000 euros, then a farmer in the Netherlands owns an average of more than 2 million euros in land. 20 percent of Dutch farmers can be classified as millionaires.
Prices of agricultural products in Thailand
There are big differences in Thailand in what farmers receive for their products and what the buyer pays on the market. For a kilo of unhusked rice, a farmer gets about 6 baht while a kilo of husked rice costs between 30 and 36 baht for a buyer in the market. That's a factor of 5-6 difference. Also read the opinion piece from the Bangkok Post mentioned below. In Thailand, the middlemen make a lot of money, to the detriment of the farmers.
In The Netherlands the price difference between farmer and consumer is much smaller. There it is a factor of 2-3. The farmer receives 0.5-1 euro for a liter of cow's milk and the consumer pays 1 to 2 euros in the supermarket.
Epilogue
And finally, I am very curious to hear what readers think about how the lot of Thai farmers can be improved. What can they do themselves? What should the government do?
1 “Farmers are the backbone of the nation” in Thai Song: (kà-sèe-tà-kon pen krà-dòek sǎn lǎng hèng-châat)
2 “The economy of enough” or “sufficiency economy” in Thai Sufficiency Economy (sèet-thà-kìt phoh phiang).
Main sources
Article “Royal Sufficiency and Elite Misrepresentation of Rural Livelihood” in the book “Saying the Unsayable, Monarchy and Democracy in Thailand, 2010
A good opinion piece in the Bangkok Post: Bangkok Post – Leave no farmer behind
A nice long article (60 pages) with all the information. The first 10 pages provide a clear overview of the entire article: World Bank Document
About this blogger
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Born in 1944 in Delfzijl as the son of a simple shopkeeper. Studied in Groningen and Curacao. Worked as a doctor in Tanzania for three years, then as a general practitioner in Vlaardingen. A few years before my retirement I married a Thai lady, we had a son who speaks three languages well.
Lived in Thailand for almost 20 years, first in Chiang Kham (Phayao province) then in Chiang Mai where I liked to bother all kinds of Thai with all kinds of questions. Followed Thai extracurricular education after which a diploma of primary school and three years of secondary school. Did a lot of volunteer work. Interested in the Thai language, history and culture. Have been living in the Netherlands for 5 years now together with my son and often with his Thai girlfriend.
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Incredible article!!!! And then to realize that the food in Thailand is “always so delicious and cheap”.
I now feel deeply ashamed after reading about the lives of farmers in the hinterland. Isaan is poor, but I never realized that it was sooooo poor.
Sad.
The problem in Thailand is the power of the middlemen and wholesalers, the farmers should organize themselves in cooperatives (which is not without danger).
Cooperations, reallocation, breaking the power of the big middlemen. But with the influence and freedom that companies like CP Group get, this is all very difficult. That affects people higher up in the pockets, money has to flow upwards... (cough cough). So I don't see reforms that will improve farmers and productivity and competitiveness on the world market happening anytime soon. Then there must be a real change in politics and the like.
Good article Tino!
Dear Tina,
A quick calculation.
According to you, this farmer earns 100.000 + 70.000 contract work (average) + (12×3000 shop) + 2500 subsidy per year + (12×4000 support from daughter) = 256.500 bath per year (21.375 per month)
Expenses are investment costs such as seed and perhaps mortgage costs (no idea how this works for farmers in Thailand), but they usually have their own vegetable garden.
A niece of mine has a good job in Bangkok. Earned with hard work 17.000 per month is 204.000 bath per year. High rent costs (because it is Bangkok), costs to support the family. Have much less than 10.000 baht left, but can make ends meet. This is because she is very responsible with the rest of her money (which I think is very clever, I certainly wouldn't be able to make ends meet with that little money).
If the farmer handles his money well, according to your data, he is not as bad off as you make out (this by Thai standards).
We don't have to argue about the fact that it's not fat.
The comparison between Thailand and the Netherlands cannot be made. Since the living standards and culture in both countries differ enormously. That's comparing apples and oranges.
Finally, it is certain that farmers in Thailand are having a bad time.
But this farmer that you are now suggesting is certainly above the average gross monthly salary in Thailand, based on your data. While I think most of them are actually below that.
If you really want to show it, you really have to know all the income and all the expenses. Only then can you see the net amount left for normal subsistence.
Looked up on the internet: According to the latest figures from the National Statistical Office (NSO), the average monthly salary in Thailand was 12.255 (Thai baht) gross per month, which is 150.660 per year.
Best regards,
Theo
Dear Theo,
Fair comments. I looked for the average income of farmers in Thailand, and a number of sources give (sometimes very) different numbers. Annoying.
The number I mentioned here: an average of 220.000 baht per year is the gross household income. You cannot really compare that with a monthly salary. Many households have two incomes. Moreover, it is a gross income. I have been unable to find data on net income. That will probably be a lot less.
Moreover, averages do not say everything. How is the distribution? I found no data on this, except that 20 percent of farmers are below the poverty line (10 percent for the entire population).
Farmer Udom is fortunate that the shop also makes something and his daughter supports him. About his income as a farmer I wrote 'never more than 100.000 baht per year', usually less. And he lost a lot of property.
I live in Isaan Korat myself
But we no longer get subsidies on rice
The family is also active in the rice fields here
But you pay for a tractor and poison
Then we throw another tractor here
Just grains of rice on the field and then let's hope
Too much rain or too little rain, no harvest
But costs were incurred
It is and remains a difficult subject and therefore cannot be assessed or compared one to one.
Too often it happens that parents completely sacrifice themselves for their child(ren) with the hope that they will pay the pension for them. As far as I'm concerned, that's a dangerous way to gamble.
A child who wants to study further can also apply for a personal loan at the study desk so that the parents are not unnecessarily burdened.
If someone decides to sell land but is going to lease land, don't they also know that their own land can also be leased?
I am well aware that a farmer in Thailand has a weak position from north to south, but there are times when people choose the easiest path and perhaps that has to do with a lack of knowledge. Also the reason why the children don't like having to survive as farmers.
The big question then becomes who will produce the food in the future and I think that CP, the giant that pulls the strings from source to consumer, plays a particularly unhealthy role in Thailand.
A country should not want landless farmers and perhaps that was what the late Rama 9 wanted to mention. Strengthen your own strongholds before the big money eats you up.
My girlfriend has 9 rai of rice fields and needs money every year, having incurred a lot of debts in the past to be able to farm and survive. This land used to belong to her parents, and is now divided among 3 sisters. Those sisters have already sold some rai to pay off debts. Now I have said let your brother farm for free on your land and let him deliver some bags of rice here as compensation. That way we can eat free rice all year round. There is a lot of poverty in this region and the villages are emptying. Young people are leaving and no longer want to farm, and the villages are aging rapidly, especially many older women. There is also a lot of land for sale but no one wants to buy it, because what do you do with it. This will never improve and I see a bleak future. Perhaps still profitable for large landowners, but no longer profitable for the smaller village farmers. Most farmers need another source of income to live on. Now rice farming is not a full-time job, because there is only work on the land here for a few months a year. And for the elderly here, a state pension of 600 to 900 baht is deeply sad. In the cities there is a different way of life than here in the countryside in Isaan. I live here 30 km below Udon Thani in a small village and see what happens around me, also a lot of drinking and jaba use and abuse.
Dear Jan
You don't live far from me if I understand correctly.
And I can only agree with your whole story.
There are actually no full-time farmers in this village anymore. People grow rice on the land, keep enough for their own consumption (and that of the family) and sell what is left. Everyone does something on the side (sales, handyman, driver for school children) and/or receives money from the children who often work abroad (Taiwan, Korea, Saudi Arabia, Australia).
Hardly any young people, many jaba, few children, many single women from 30 to 50, and older men.
My partner once received 8 rai as an advance on the inheritance and the pension is paid to the parents from the proceeds. This is also the case for the other two children and then the parents-in-law in the countryside also receive 20.000 baht and they also receive extras from living brothers, sisters and great-grandchildren.
Those 8 rai are outsourced by a brother. We do not need the proceeds, but they are used within the family and when we visit we receive all kinds of goods. Bartering within the family and group of acquaintances and in the area of the in-laws works this way in many families.
An important condition is that farming life is a part-time job, so that the active members have a job, preferably as a (semi) civil servant.
In this way, the tradition as a farmer in Isan is fine, but the group (family) must have the desire to continue as a group.
Rich families embrace the principle and there is of course a reason for that, otherwise they would not be so rich.
Other farmers are in a different situation, but land must always be preserved and with a well it can ensure that vegetables can also be grown during the dry season, even if only for their own use.
The problem is often money, but national and local government also have a role in it. The latter is willing, but at a national level people opt for short-term solutions. Mash and keep wet. The price is for someone else.
Farmers are no longer the economic backbone, but they remain an interesting group when it comes to elections and that is why this group, in my humble opinion, has become a political plaything.
The 10.000 baht free money craze for the country's 50 million residents will make the CP shareholders (7/11, Makro, CP Food) a lot of money, but the farmers will pay the price out of their own pocket.
Count your profit and training is quite useful for that. Imagine if such an amount were invested in education.
Then you will not solve the farmers' poverty problem now, but you will solve it in the future.
Everything takes time and better late than ever, but the big question for me is what the questioner thinks about it.
If the trend continues, the average age of farmers in 10 years will be 60. Those older farmers will sell some (or all) of their land and some of that land may be bought up by young, successful farmers. Labor productivity will therefore increase and farming will hopefully become more profitable.
A cousin of my wife is a rice farmer in Mukdahan; he is about 40 years old and I think successful even though he doesn't have rich parents. He also experiments with exotic crops and sells them via the internet. I don't know if he bought up land, but I wouldn't be surprised.