PM Prayut: Farmers should work in groups to achieve economy of scale

[webfact]

PM Prayut: Farmers should work in groups to achieve economy of scale

 

FILE photo

 

BANGKOK, 14th August 2018 (NNT) - The Prime Minister has suggested farmers work in groups in order to achieve economy of scale and efficiently improve product quality. 

Prime Minister Gen. Prayut Chan-o-cha said that rice prices are currently improving because of higher demand after production in many countries was damaged by floods. 

Gen. Prayut however, noted that the harvest in Thailand in coming years may lead to excess supply in the market and a decline in prices again. 

The PM said that a major problem for Thai rice farmers is the high cost of production and their inability to sell their products due to unfavorable market conditions. Accordingly, many have become indebted and owe money to both formal and informal lenders. 

Therefore, Gen. Prayut has suggested local farmers get together in groups such as cooperatives or community enterprises in order to help one another lower costs and improve the quality of their products, which should enable them to fetch better prices while gaining bargaining power to deal with buyers. 

As for other crops, such as tapioca, sugar cane, rubber and pineapples, the Prime Minister recommended growers adopt a similar approach in order to avoid a situation which requires a government subsidy and hurts the country’s budget.

 

-- nnt 2018-08-14

[Oziex1]

"To efficiently improve product quality"

 

Great idea.produce quality sorted. 

[Cadbury]

Nothing like a bit of good advice from agricultural experts like the PM. I hope the farmers are grateful.

[akirasan]

Empty vessels make the most noise

[meechai]

1 hour ago, webfact said:

Therefore, Gen. Prayut has suggested local farmers get together in groups such as cooperatives or community enterprises in order to help one another lower costs and improve the quality of their products, which should enable them to fetch better prices while gaining bargaining power to deal with buyers. 

 

Come On ! Surely he knows this is how it has always been done since generations in all villages. No farmer plants & harvests his own rice.

Instead they work together & when for instance it is time to plant Somchai's rai's the whole village helps. Somchai provides only lunch. Then Somchai also works on all the others plant job when it is their day. Same for harvest time...one owners rai's at a time they harvest each others crops

 

As for bargaining with buyers...Good luck all accept what the collector is paying out of fear of not moving their rice. Yes in that instance perhaps if they all said no to a price they may get more or...not & be stuck with tons of rice

Edited August 13, 2018 by meechai

[Samui Bodoh]

"...As for other crops, such as tapioca, sugar cane, rubber and pineapples, the Prime Minister recommended growers adopt a similar approach in order to avoid a situation which requires a government subsidy and hurts the country’s budget..."

 

It is always at the tail end of these NNT stories where the real information/meaning is...

 

"...hurts the country's budget."

 

THIS is the priority for the Junta, to put an end to the subsidies of poor farmers; if they were good people, then they wouldn't be poor. And, by the way, farmers who grow other crops; you ain't getting anything either!

 

Don't farmers understand that if the government subsidizes them, then there won't be as much money for the military?

 

[Lungstib]

1 hour ago, webfact said:

The PM said that a major problem for Thai rice farmers is the high cost of production and their inability to sell their products due to unfavorable market conditions.

Rice is still popular, bought by Asians every day and a big part of their diet. The problem for farmers is that what they cut from the field cannot be eaten until it is milled. Farmers do not own mills. There is still a very large difference between what the farmers get for one kilo of rice and what a miller gets for selling it from their factory. Then, of course, there is the add-on that big supermarkets and shops want if they sell the product. The people who grow rice are forced to sell as soon as possible after harvest and take the much needed cash. The millers process it, store it, bag it and finally sell for a much higher profit. You don't see poor rice millers, they have been at the high end of society and were recently found to be involved in what has become known as Yingluck's rice corruption deals.

[ezzra]

Is the esteemed leader proposing an idea much like a Kibbutz or a collective farming bringing back farming ideas of the 19th century?...

[coulson]

Another pearl of wisdom from the headmaster, with a communist undertone.

 

Is it just me or are all the media very quiet on this man at the moment? The only press seems to be coming from the propaganda bureau. 

[bluesofa]

3 hours ago, webfact said:

Gen. Prayut has suggested local farmers get together in groups such as cooperatives or community enterprises in order to help one another

Ha ha ha, so funny!

I suspect the good man has been watching Monty Python and the Holy Grail: "We're an anarcho-syndicalist commune. We take it in turns to act as a sort of executive officer for the week."

 

Perhaps the farmers could be issued with T-shirts too:

 

[Scott]

A post with inappropriate comments has been removed.  

 

[faraday]

Next time....

 

A plan will be implemented, so that the gubberment owns all the farmers produce to ensure a better price.

 

But not for the farmers.

[canopy]

He's right. Farm sizes in Thailand haven't changed much since it was subsistence farming. From all appearances farming practices are inefficient, outdated, low quality, and not competitive on the world stage. A 10 rai farm is just never going to be profitable like a 1000 rai farm can be. But just telling the farmers to vaguely do something better is not going to work. He needs to make a pilot program in one part of Thailand where all the farmers verify it actually works. After the problems are worked out, then roll it out. He's also advocated growing things other than rice. Again, implement it somewhere to show proof of concept. The farmers deserve more than hand waving. They are in desperate need of solutions.

 

[GinBoy2]

Maybe 'if' they actually wanted to raise the peasants from servitude, they should educate them to be able get decent jobs and off the land, then the farms would consolidate to sizes that were actually profitable, just like Taiwan & South Korea did decades ago

But, silly me....an uneducated underclass suits the elite just fine, then you just rebrand servitude into 'sustainable development'

Welcome to Thailand!

[thaiguzzi]

59 minutes ago, GinBoy2 said:

then the farms would consolidate to sizes that were actually profitable, just like Taiwan & South Korea did decades ago

Most of the farms in South Korea are smallholders.

Ditto Japan.

Don't know about Taiwan.

2 hours ago, Lungstib said:

The problem for farmers is that what they cut from the field cannot be eaten until it is milled. Farmers do not own mills. There is still a very large difference between what the farmers get for one kilo of rice and what a miller gets for selling it from their factory. Then, of course, there is the add-on that big supermarkets and shops want if they sell the product. The people who grow rice are forced to sell as soon as possible

Yep, Same in the West with milk and diary farmers.

The farmers are the ones getting the short end of the stick, living hand to mouth, whilst the middle men and supermarkets cream the profits...

4 hours ago, webfact said:

As for other crops, such as tapioca, sugar cane, rubber and pineapples, the Prime Minister recommended growers adopt a similar approach in order to avoid a situation which requires a government subsidy and hurts the country’s budget.

This guy has never had earth nor grime underneath his fingernails, sweat stinging his eyes, nor done a day's hard labour in his life.

How dare he suggest what is wrong or right to a hard working honest farmer who knows his own land and crops, but has been shafted for decades by dishonest middlemen and rice millers.

[Eric Loh]

If he understand economy of scale, then he should do something about the excessive generals. ?

[Srikcir]

5 hours ago, webfact said:

The PM said that a major problem for Thai rice farmers is the high cost of production and their inability to sell their products due to unfavorable market conditions. Accordingly, many have become indebted and owe money to both formal and informal lenders. 

But didn't the Prayut government just recently say that they solved all those challenges?

• Higher income among agricultural households helped boost spending. 2018-08-02 https://www.thaivisa.com/forum/topic/1050979-thai-economy-stays-on-upward-trend-in-june/?utm_source=newsletter-20180802-0632&utm_medium=email&utm_campaign=news

• Government Spokesperson Lt Gen Sansern Kaewkamnerd said the prime minister is satisfied with the work of the government-appointed debt relief committee tasked with assisting members of the Farmer's Reconstruction and Development Fund. 2018-08-13 

  https://www.thaivisa.com/forum/topic/1052576-pm-prayut-satisfied-with-farm-debt-solutions/?utm_source=newsletter-20180813-0652&utm_medium=email&utm_campaign=news

   

• Gen.Prayut stressed that the government is helping the low-income people through various measures in order to help increase their income and reduce expenses. 2018-08-13

  https://www.thaivisa.com/forum/topic/1052623-pm-happy-with-better-economic-conditions-in-thailand/?utm_source=newsletter-20180813-1234&utm_medium=email&utm_campaign=news

 

[Srikcir]

5 hours ago, webfact said:

PM Prayut: Farmers should work in groups to achieve economy of scale

The way that economy of scale is typically a consolidation (ie., purchase) of small farms into large farms where large scale mechanization can significantly cut production costs.

If there were an increase in farm size, profit would increase more than proportionally to the increase of land and fixed capital. This would be especially achievable when all machinery and equipment is owned by the farm and not rented.

https://www.jstage.jst.go.jp/article/arfe/52/4/52_259/_html/-char/en

There are similar rice reform policies in Japan and Korea to effect profitable economy of scale.
One problem with full implementation of economy of scale policies that use farm consolidation is how do displaced small scale farmers survive? With Thailand already in a full employment economy and meager re-training resources for producing skilled workers, the future of displaced farmers is bleak.

 

 

[Small Joke]

Yes,  brilliant.  Ask the Chinese, North Koreans, and Russians that survived their respective famines how well agricultural collectivism worked. ?

[Eric Loh]

1 hour ago, thaiguzzi said:

Don't know about Taiwan.

Mostly family run farms averaging 1.1 hectares. Noted for high yield, crop rotation, use of high tech method, second or third educated generations, mechanization, heavy government assistance and chinese entrepreneurship. 

[tomta]

Superfluous advice from a superfluous adviser but I suppose the farmers will be grateful that they haven't been given another shovel of sufficiency economy rubbish

[Small Joke]

4 hours ago, meechai said:

 

Come On ! Surely he knows this is how it has always been done since generations in all villages. No farmer plants & harvests his own rice.

Instead they work together & when for instance it is time to plant Somchai's rai's the whole village helps. Somchai provides only lunch. Then Somchai also works on all the others plant job when it is their day. Same for harvest time...one owners rai's at a time they harvest each others crops

 

As for bargaining with buyers...Good luck all accept what the collector is paying out of fear of not moving their rice. Yes in that instance perhaps if they all said no to a price they may get more or...not & be stuck with tons of rice

I think he has a -heaven forfend- half baked commisar driven collectivism model in mind,  where everyone ends up thoroughly dis-incentivised, and the arse soon falls out of the nations rice bowl. 

Whatever, if his advice was worth anything,  it would have been done by the farmers on their own,  as you pointed out, anyway. 

[Ulic]

You mean like, a farmers Co-Op (farmers co-operative). Of course they should but with all the 

coruption nobody trusts each other. 

[Small Joke]

1 hour ago, Srikcir said:

The way that economy of scale is typically a consolidation (ie., purchase) of small farms into large farms where large scale mechanization can significantly cut production costs.

If there were an increase in farm size, profit would increase more than proportionally to the increase of land and fixed capital. This would be especially achievable when all machinery and equipment is owned by the farm and not rented.

https://www.jstage.jst.go.jp/article/arfe/52/4/52_259/_html/-char/en

There are similar rice reform policies in Japan and Korea to effect profitable economy of scale.
One problem with full implementation of economy of scale policies that use farm consolidation is how do displaced small scale farmers survive? With Thailand already in a full employment economy and meager re-training resources for producing skilled workers, the future of displaced farmers is bleak.

 

 

That works in sophisticated, highly mechanised, nations only. 

Here, a rich guy would buy up the smallholdings for not enough to let the farmers retire, probably with extortion thrown in as a gesture of goodwill,  then lease the land back to the farmers who then work for him,  and,  and basically enslave them on their former lands. Take it or leave it. 

[metisdead]

Off topic posts and the replies have been removed. 

[Srikcir]

2 hours ago, Small Joke said:

That works in sophisticated, highly mechanised, nations only. 

It's all about efficiency in terms of production costs and mechanization is only part of the solution.

 

According to the Empirical Investigation of the Rice Production Structure in Taiwan, 1976-93 by

Yoshimi Kuroda, published in  The Developing Economies, XXXVI-1 (March 1998), pp. 80–100:

 

There must be for the Taiwan rice industry the promotion of a larger-scale mechanization with more effective consolidation of paddy fields. The government will have to introduce policy measures to promote technological innovations and more

flexible land movements for larger-scale farming with smaller number of entrepreneurial rice farmers.

However, in doing so rice production policy must focus less on self-production and self-sufficiency and give greater emphasis on more balanced and diversified sources of supply.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1746-1049.1998.tb00861.x

Seems to me that Prayut has focused on just the opposite: more on self-production and self-sufficiency. In a way that's protectionism in the form of nationalism - not suitable on a global stage.

 

[Enoon]

4 hours ago, Small Joke said:

That works in sophisticated, highly mechanised, nations only. 

 

 

Unlike Japan, Korea and Taiwan, Thailand missed that "boat".

 

Thailand could have caught it in the late 19th century, as Japan did (or even after WW2) but they didn't.

 

If the "revolution" had not been castrated it might have been different.

 

It was too easy for the "owners" to milk foreign money (chiefly enriching themselves) by selling a few of the population as "indentured labour" to foreign developed/owned industries.

 

There is nowhere for the rural population to go.

 

The worst is yet to come.

 

 

 

 

Edited August 14, 2018 by Enoon

[johng]

They should all wear the "proper"farming attire to attract high prices

 

 

[johng]

Like this

[George FmplesdaCosteedback]

I asked almost the same question a couple of years ago and got my answer:

Why don't Thai farmers work in co-operatives?

I was told that the coops ultimately become corrupted and the savings are negated by those in charge skimming the profit for themselves.

 

Sounds par for the course in Thailand.