Thailand asks farmers to cut down rubber trees to boost prices

[webfact]

Thailand asks farmers to cut down rubber trees to boost prices

Rare measure targets 64,000 hectares to reduce supply by 5% in first quarter

APORNRATH PHOONPHONGPHIPHAT, Nikkei staff writer

 

A rubber tree farmer at his plantation in Thailand's southern Nakhon Si Thammarat Province. The current price of rubber has fallen well below the record high of $6.00 a kilogram in 2011. © Reuters

 

BANGKOK -- Thailand, the world's largest rubber producer and exporter, has launched a program to encourage farmers to cut down rubber trees earlier than the 25-year life cycle to reduce total annual output by 5% by the end of April, in a bid to support falling rubber prices.

 

To reach the target, the Thai government has earmarked 80 billion baht ($2.5 billion) to compensate those who participate in the program, which is not mandatory.

 

Thailand has previously used similar "cut-down" measures in coordination with Indonesia and Malaysia, the second- and third-biggest rubber producers in the world, respectively, but the policies were backed up only by verbal interventions, rather than specific action, and failed to have a major impact on prices. 

 

Full story: https://asia.nikkei.com/Politics-Economy/Policy-Politics/Thailand-to-rev-up-the-plan-to-cut-down-rubber-trees

 

-- NIKKEI ASIAN REVIEW 2018-02-08

[Ruffian Dick]

Probably synthetics are replacing them, so less demand.

Unfortunately they will probably be burned and replaced with oil palms.

[ezzra]

Thai logic, same as Yingluck abysmal plan to corner the rice market, cut the tree

to increase value and when shortage will loom, plant new ones with government's

money of course...

[mick220675]

The last time this policy was introduced in our area the only people who cut any trees down were the wealthy Thai/Chinese land owners. They took the money and replanted more rubber trees.

 

The problem is not low rubber prices but the debt. My wife has no debt and a very nice income from her rubber.

 

But when the farmers were told to grow rubber by the government, so borrowed money to plant trees, then borrowed more money to look after the trees until they were ready to cut. They now find the income from the trees only just covers there repayments they are in a catch 22 position, they can not cut there trees down as they need the income or they will lose there farms.

 

To make matters worse our local farmers bank has stopped lending money and will not open new accounts, so if the farmers need money they have to go to the high interest money shops or worst the Chines/Thai money lenders. I know family's with 24 rai farms who need 25,000 baht a month just to pay the interest.

[Bob12345]

Do a coup to throw an elected government out with the pretense to stop corruption and punish them for their rice scheme.

Next, introduce a rubber scheme and be even more corrupt.

 

Am i the only one thinking the country goes round in circles over and over again?

[leeneeds]

They need to look at wash and wear condoms for the growing amount of Chinese tourists,

spin off being the sizing department, would be the largest employer,

 

Thinking out side the box  is needed, to sell the product, 

All manner of thoughts need to be  thrown out to either consider,  refine or discount, 

 

cutting down trees will only open the door for others to take advantage, of shortage given they take so long to produce, Indonesia will be watching like a hawk,

 

 

 

[mikebell]

Meanwhile in other news the Government is urging the police to crush the cars of drunken motorists to curb the traffic jams in Bangkok.

[the guest]

Country should be looking at other high-earning cash crops, rather than giving false hopes to it's ppl.

[ib1b4]

It was only three years ago when this government told the farmers to stop planting rice, and start planting rubber trees etc instead.

[JAG]

49 minutes ago, leeneeds said:

They need to look at wash and wear condoms for the growing amount of Chinese tourists,

spin off being the sizing department, would be the largest employer,

 

 

1

No, recycling is the answer - make 'em out of old tyres.

 

There are as many as 365 in a "Goodyear"...

[Emster23]

1 hour ago, leeneeds said:

They need to look at wash and wear condoms for the growing amount of Chinese tourists,

spin off being the sizing department, would be the largest employer,

 

Thinking out side the box  is needed, to sell the product, 

All manner of thoughts need to be  thrown out to either consider,  refine or discount, 

 

cutting down trees will only open the door for others to take advantage, of shortage given they take so long to produce, Indonesia will be watching like a hawk,

 

 

 

Think outside the box regarding condoms? Isn't their purpose to be "inside the box"?

[Cadbury]

Typical Thai military knee jerk response to solve a problem of low Thai rubber prices. Thai rubber producers were warned a year or so back to stop contaminating their rubber with sulphuric acid during the tapping process. Evidently this makes the rubber "set" quicker. However the consequence is that it also lowers the quality of the rubber to the point where tyre manufacturers were refusing to buy Thai rubber. Might it not have occurred to them perhaps this practice could have some impact on the already poor market prices.

So instead of fixing this this easily identifiable farmer induced contamination problem the military boofheads take the easy way and tell them to chop down the trees as if it is a tree problem instead of a cheating Thai farmer problem.

Michelin and Bridgestone previously complained about the low quality of Thai rubber which has been identified as coming from the north and north-east.

At the time it was quoted:

"Prime Minister Prayut Chan-o-cha gave a mandate for related agencies to work out strategic plans to upgrade the quality of block rubber and measures to sway farmers from putting sulphuric acid in the latex" 

Given his track record of underachieving It would be difficult to believe that anything the PM promises to do gets done.

This instance is probably no exception.

Edited February 8, 2018 by Cadbury

[mwbrown]

“If," ["the management consultant"] said tersely, “we could for a moment move on to the subject of fiscal policy. . .”
“Fiscal policy!" whooped Ford Prefect. “Fiscal policy!"
The management consultant gave him a look that only a lungfish could have copied.
“Fiscal policy. . .” he repeated, “that is what I said.”
“How can you have money,” demanded Ford, “if none of you actually produces anything? It doesn't grow on trees you know.”
“If you would allow me to continue.. .”
Ford nodded dejectedly.
“Thank you. Since we decided a few weeks ago to adopt the leaf as legal tender, we have, of course, all become immensely rich.”
Ford stared in disbelief at the crowd who were murmuring appreciatively at this and greedily fingering the wads of leaves with which their track suits were stuffed.
“But we have also,” continued the management consultant, “run into a small inflation problem on account of the high level of leaf availability, which means that, I gather, the current going rate has something like three deciduous forests buying one ship’s peanut."
Murmurs of alarm came from the crowd. The management consultant waved them down.
“So in order to obviate this problem,” he continued, “and effectively revalue the leaf, we are about to embark on a massive defoliation campaign, and. . .er, burn down all the forests. I think you'll all agree that's a sensible move under the circumstances."
The crowd seemed a little uncertain about this for a second or two until someone pointed out how much this would increase the value of the leaves in their pockets whereupon they let out whoops of delight and gave the management consultant a standing ovation. The accountants among them looked forward to a profitable autumn aloft and it got an appreciative round from the crowd.”

[Lungstib]

In the north many farmers planted rubber induced by the Thaksin govt of the day which promised great profits. So they bought trees, cut weeds and only spent money for 8 years until the latex flowed. You really think they want to cut them down now? It was the spread of rubber all over the country that spurred this surplus. Now they realise something they could eat may have been better. Short term government thinking.  

[Eric Loh]

14 minutes ago, Lungstib said:

In the north many farmers planted rubber induced by the Thaksin govt of the day which promised great profits. So they bought trees, cut weeds and only spent money for 8 years until the latex flowed. You really think they want to cut them down now? It was the spread of rubber all over the country that spurred this surplus. Now they realise something they could eat may have been better. Short term government thinking.  

"Skyrocketing rubber prices have triggered a rush to plant rubber trees".

 

I doubt you remember this media headlines back in Feb 2011. Even CP Group jumped in and started growing large tracts of new rubber plantation. As they say, hindsight is 20/20 vision. You don't need the government to nanny entrepreneurs how to make business decisions. 

[jerojero]

And this is somehow different than Yingluck rice subsidy scheme? Sheesh!

[Eric Loh]

1 hour ago, Lungstib said:

In the north many farmers planted rubber induced by the Thaksin govt of the day which promised great profits. So they bought trees, cut weeds and only spent money for 8 years until the latex flowed. You really think they want to cut them down now? It was the spread of rubber all over the country that spurred this surplus. Now they realise something they could eat may have been better. Short term government thinking.  

Suggest you check out the last government initiative 'One million Rai Rubber Plantation Project" back in 2006. 

[Lungstib]

4 minutes ago, Eric Loh said:

Suggest you check out the last government initiative 'One million Rai Rubber Plantation Project" back in 2006. 

And its says this;......During the height of the Thaksin government, the Agriculture and Cooperatives Ministry in 2005 introduced the one-million-rai rubber tree project, which was aimed at expanding rubber plantations in other regions to respond to growing demand around the world, especially from China.

Tree planting expanded extensively, exceeding the initial plans, while reports of forest encroachment by the new plantations continued to surge.

According to the Natural Resources and Environment Ministry (Monre), rubber plantations nationwide account for around 30 million rai (4.8 million hectares), about triple what they were in 1986.........

I remember it well and said at the time that the prices would then drop. 

[thaiguzzi]

Not only Thailand, but every Latitude where rubber can be grown has gone crazy in the last decade inc parts of Africa where there was never any rubber 20 years ago.

Here in SE Asia, Laos and Cambodia have gone mental in rubber plantations popping up everywhere. Unfortunately, rather than small land owners owning a small plantation, it's large Chinese companies owning the land with colossal plantations of hundreds of hectares with the local population employed merely as low paid employees.

[Srikcir]

7 hours ago, webfact said:

but the policies were backed up only by verbal interventions, rather than specific action, and failed to have a major impact on prices

So what has changed?

Nothing.

But let's do the same thing again. This is not leadership!

[Phuketshrew]

Does anyone know exactly what incentives are on offer and how to claim them?

[Classic Ray]

Time to re-evaluate what crops/products actually can grow in their fields and be sold or exported and to cut down the amount that is imported from China or similar countries.

 

Products such as dwarf green beans (currently grown in Kenya for export to  the UK among other places) may be suitable. Also time to influence the Thai diet with healthier foods such as capsicums/sweet peppers to replace the boring fish/rice, meat/rice meals available. Whilst capsicums, celery etc are available, they are not widespread, the only common ones seem to be pak bung/morning glory, fried to death to remove any goodness. More wheat could also be grown, plus large scale production of insects for protein instead of meat. Nuts are produced here, but not on a large enough scale.

 

What are the government doing to explore this?

[Eric Loh]

Malaysia had a sterling 2017 with natural rubber and rubber based products export up 30.2% to RM32.3 B. Really a tale of 2 countries and one simply has no clue and competency on how to improve the industry. This junta government has failed the farmers. 

[SirBuwanaDogbossKing]

2 hours ago, Phuketshrew said:

Does anyone know exactly what incentives are on offer and how to claim them?

arongsak Jaisamut, director of the Rubber Authority of Thailand's Production Development Department told the Nikkei Asian Review on Wednesday that the government will offer farmers 4,000 baht per rai

Average of 100 trees per rai = B40 per tree.

 

The government also plans to spend an additional 3 billion baht to pay farmers to cut down rubbers trees covering an additional 300,000 rai, or 48,000 hectares, by the end of this year. However, that plan has yet to be approved by the Thai cabinet, according to an official at the Rubber Authority of Thailand.

 

So B3 billion divided by B30 million (300,000 rai x 100 trees) = B100 per tree or B10,000 per rai.

 

Thai maths syndrome strikes again!! LOL.

[wakeupplease]

um rice scheme mk 2 and again those big land owners get all the profits

[thaiguzzi]

2 hours ago, SirBuwanaDogbossKing said:

Average of 100 trees per rai = B40 per tree.

Average of 76 trees per rai. Not 100.

Either way 40 baht or 100 baht is just outrageous.

That's what happens when an agriculture dept is run by Generals. And they are not even good at being Generals, let alone govt ministers...

[KIWIBATCH]

4 hours ago, Classic Ray said:

Time to re-evaluate what crops/products actually can grow in their fields and be sold or exported and to cut down the amount that is imported from China or similar countries.

 

Products such as dwarf green beans (currently grown in Kenya for export to  the UK among other places) may be suitable. Also time to influence the Thai diet with healthier foods such as capsicums/sweet peppers to replace the boring fish/rice, meat/rice meals available. Whilst capsicums, celery etc are available, they are not widespread, the only common ones seem to be pak bung/morning glory, fried to death to remove any goodness. More wheat could also be grown, plus large scale production of insects for protein instead of meat. Nuts are produced here, but not on a large enough scale.

 

What are the government doing to explore this?

..Well said.....add nectarines, peaches, apricots, feijoas...the Thailand climate is ideal for these fruits..also add kiwifruit (a.k.a Chinese gooseberries)...raspberries...boysenberries...the list goes on...but nobody does any research on these...instead they concentrate on rice and previously promoted the hell out of growing rubbers trees...and now tell the farmers to cut them down!!!!

Thailand Hub of backward numptie thinking..!!!

[jenny2017]

Thailand asks farmers to cut down rubber trees to boost prices

 

 Why not cut down on hubs?

Edited February 8, 2018 by jenny2017

[jenny2017]

Why not keeping the price up?

 Rubber plantation agriculture was introduced to Southeast Asia in the 19th century. It revolutionized parts of the economy there. Today, Indonesia, Malaysia and Thailand produce three quarters of the world's rubber.

 

 

Rubber Market

 

 Tire companies consumer about 70 percent of the world's natural rubber.

 The price of rubber is often linked with the price of oil, When the price of oil goes up so too does rubber because when the cost of making petroleum-based synthetic rubber goes up many tire and rubber producers buy more rubber as a cheaper alternative, driving up demand for rubber and the price. High oil prices in the mid-2000s and late-2000s increased demand for natural rubber.

 China is the largest rubber user as it is now a large vehicle and tire producer and consumer. On the commodities markets rubber sells for about $3 to $4 a kilogram.

 

  What do Thai farmers get for their rubber? Interesting facts about rubber here:

 

  http://factsanddetails.com/world/cat52/sub329/item2217.html

 

    

 

 

 

 

Edited February 8, 2018 by jenny2017

[KMartinHandyman]

Someone tell them it takes more than one country to constitute a price fixing cartel. Watch the other rubber producing countries laugh and plant more trees if this scheme goes into effect.