Thailand's Misguided Rice Policy

[LaoPo]

Thailand's misguided rice policy

By Jonathan Head

BBC News, Bangkok

The first rains of the year have been falling for a couple of months now in Thailand’s often dry north-east, and farmers are out most days in the freshly-flooded fields, transplanting young jasmine rice seedlings.

They work quickly, bent over double, expertly spacing the seedlings in the silt.

Rice farmers are some of the poorest people in Thailand

But it is back-breaking work. And although jasmine is one of the most highly-prized rice varieties – it is grown almost exclusively in north-eastern Thailand – the farmers in this region are some of the poorest people in the country, most of them mired in debt.

Lack of investment

Their problem, says veteran rice researcher Kwanchai Gomez from Bangkok’s Kasaertsart University, is a chronic lack of investment in rice farming.

Very little of the north-east – one of Thailand’s most populous regions – is irrigated.

“Water is the most important thing that guarantees low risk," she says.

“And risk is the main problem for farmers. One year no rain, the next year floods. So you have to get a loan. Then your crop fails, and you get into debt.”

When world rice prices soared last year, everyone assumed that farmers in Thailand – for many years the world’s top rice exporter – must have done well.

Some did. But only those in the central plains region, which get irrigation from the Chaophraya River.

They grow up to three crops a year, mostly higher yield varieties than jasmine.

That is where most of Thailand’s exports come from.

The indebtedness and poverty of farmers was ignored for decades by governments in Bangkok.

Other nations are threatening Thailand's place as the top rice exporter

Then in the 2001 election, a wealthy telecoms tycoon, Thaksin Shinawatra, drew up a platform of policies aimed directly at farmers, like debt forgiveness and a village loan fund.

It proved a stunningly successful vote-winning strategy, delivering Mr Thaksin three successive election victories, before he was ousted by a coup in September 2006.

But many of those policies have done less for farmers than Mr Thaksin claimed.

Rice mortgage

One, in particular, is proving a huge headache for the current government, led by his main rival, the Democrat Party.

“ I realized that our problems with debt and crop prices would never be cured just by waiting for the government to help ”

Tongsuan Sodapak

It is called the rice mortgage scheme. The idea is to help farmers ride out price volatility by allowing them to sell their rice to the government at a guaranteed price.

Farmers usually have no way to store or process their rice, so they are all forced to sell at once at harvest time, allowing the millers – who do have these facilities – to bargain down the price and take most of the profit.

But the scheme has become riddled with corruption, and benefits only a minority of farmers.

“Most of them, unfortunately, are rich farmers with irrigation,” says economist Nipon Poapongsakorn from the Thailand Development Research Institute.

“Poor farmers in the north-east don’t have a surplus of rice to sell, so they don’t benefit from this policy at all. It is a pro-rich, pro-business policy”.

The scheme is also very expensive for the government, especially now, because last year – when rice prices were unusually volatile – a weak government, led by Mr Thaksin’s allies, set the guaranteed price too high.

Those with rice to sell would only sell to the government. Rice traders, like Asia Golden Rice - one of Thailand’s most successful - found it difficult to procure supplies at competitive prices for their overseas customers.

“We might even lose our number one ranking as a rice exporter to our competitors,” says Saranyu Jeamsinkul, deputy managing director for Asia Golden Rice.

“We are at least $100 a tonne higher than Vietnam - so it is rather difficult to export at the moment”.

Sorting the mess

The government has ordered Deputy Prime Minister Kobsak Sapavasu to sort out the mess.

He estimates it has already cost 11 billion baht ($325m) just to process and store crops bought under the mortgage scheme.

And because rice prices have fallen this year, when the government sells the stocks he estimates it will lose another 20 billion baht ($590m).

The escalating price of rice has not made many Thai farmers any richer

“The numbers are just unbelievable," says Mr Kobsak.

But his attempts to close down the mortgage scheme, and replace it with a simpler subsidy, have been blocked by his own coalition partners.

There is a strong suspicion, shared by Mr Kobsak, that a lot of politicians are making money out of the scheme – perhaps from bribes from warehouse-keepers storing it, or traders trying to buy at bargain prices.

With any hope of a new agricultural policy stalled over political bickering, one group of farmers near the north-eastern town of Ubon Ratchathani have decided to try to lift their living standards by themselves.

They have joined forces to run their own rice mill, and they are saving on escalating fertiliser costs by recycling cow dung and growing organic jasmine rice.

"I wondered why so many farmers were abandoning their farms," said Tongsuan Sodapak, the local teacher whose idea it is. "Then I realised that our problems with debt and crop prices would never be cured just by waiting for the government to help."

This group of farmers has been fortunate, because they have been able to make contact with a buyer for their organic rice in Italy. Most other farmers in the north-east have no way of marketing their jasmine rice, despite its famed fragrance and flavour.

Thailand's long preoccupation with being the number one exporter should now shift, says Nipon Poapongsakorn - to a strategy of marketing Thai rice for its quality and variety.

One retailer in Bangkok has made a start in promoting Thailand's 81 rice varieties. Gourmet Market, a luxury supermarket chain, has bins of different kinds of rice, explaining exactly which region they come from, and their characteristic. It is a bit like the terroir of wine.

"We have people coming here from places like Hong Kong," says company vice president Lakana Naviroj. "They take rice home, because they don't have the variety and quality we have here."

One supermarket alone, though, will not give Thailand's rice the impact it could have on global markets. That requires a concerted drive coordinated by different government agencies, something that seems unlikely in today's volatile political climate.

At the school where Tongsun Sodapak teaches, when he's not helping grow to rice, I asked a group of teenage girls - nearly all of them the children of farmers - how many of them would be happy to stay on the farm when they left school.

Only four, out of 34, raised their hands.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8130187.stm

LaoPo

[alant]

i dont know of any good state agricultural scheme, the generality leads to problems and inflexibility that crops dont understand, they grow according to the effects of nature.

combine with mans desire to make the occasional buck by whatever means and bingo,

Edited July 15, 2009 by alant

[bonobo]

It seems strange to me that with the high perceived quality of Thai rice, especially jasmine rice, that aggressive store chains such as Trader Joe's and Henry's in the US don't set up cotnracts with local mills to buy entire crops.  They do this with other products (buying entire product lines from farms/mills/vineyards/co-ops/etc), so why not with rice?

As an aside, our factory has temporarily lost about 20% of our workers who have gone home for the rice crop, and I can't get new silk shawls woven until September for the same reason for my personal side business. Rice is still the lifeblood of the region, but the people cannot make a living only at rice, so they have to take other jobs as well.

[Maizefarmer]

We have thrashed this subject out several times in the Farming In Thailand section of the forum - I see Johnathan Head BBC has at last picked up on it (!).....

[LaoPo]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Edited July 15, 2009 by LaoPo

[TPI]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

[LaoPo]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

Good idea; why not.

IMO there's always a very smart Farang with some assets who sees "opportunity knocks" and starts doing something.

I have seen so many questions in the past years by Farang who want to set up a business that I don't understand that someone didn't jump in already, but maybe someone did and doesn't talk about it.

It's also done now already by the group of joined farmers who contacted an Italian buyer like mentioned in the OP article.

LaoPo

[tranquillize]

Government corruption seems to be a common theme for failed policies. The farmers in Ubon have done well but it will be difficult for others to follow suit, it can be tough to organize people the way they have. Kudos to them.

[Chaimai]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

Good idea; why not.

IMO there's always a very smart Farang with some assets who sees "opportunity knocks" and starts doing something.

I have seen so many questions in the past years by Farang who want to set up a business that I don't understand that someone didn't jump in already, but maybe someone did and doesn't talk about it.

It's also done now already by the group of joined farmers who contacted an Italian buyer like mentioned in the OP article.

LaoPo

I don't want to be dismissive about this piece of lateral thinking (even though it may have been expounded in the past). however, there are somr barriers to success:-

1. The Chinese/Thai control on the rice market is overwhelming.

2. Breaking cartels can be dangerous - if not lethal.

3. A friend had the same issue with crickets when he tried to break out of a local (whole province) cartel - nobody would touch him.

As one who imports Jasmine to the UK I fail to understand why prices are up 15% when rice exports are 40+% down !

If anyone can form a local cooperative and supply 24 tonnes of Jasmine 100% rice per month, complete with the usual cert of origin, physiosantry, fumigation etc.etc I will happily buy (at the right price ).

[animatic]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

It also sounds like a lovely way to get shot and dumped in a ditch....

The local puya millers and friends would no doubt greatly dislike this farang competition.

As can be noted by the restrictions on what jobs farangs can do.

Rice farming and milling I am pretty sure are right on that list.

Generally intended to keep multi-nationals at bay,

it also applies to farangs with wife in business.

[baht&sold]

It also sounds like a lovely way to get shot and dumped in a ditch....

The local puya millers and friends would no doubt greatly dislike this farang competition.

It's also notable, many rice mill owners & Puyai's in the N & NE were/are an integral part of Mr Thaksin's 'get out the vote' control scheme (whilst fleecing poor farmers). And so it continues with Mr Thaksin's observant apprentice Mr Newin via his Agriculture/Commerce Ministry 'team players'. Meanwhile, the handful of controlling Thai-Chinese Bkk rice barons continue to reap the labours (and profits) of what others sow, as it always has been, and as long as corrupt politicians see fit to 'take a slice' (all at the expense of the poor duped farmer) so it shall be, and very sadly indeed.

Edited July 15, 2009 by baht&sold

[LaoPo]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

It also sounds like a lovely way to get shot and dumped in a ditch....

The local puya millers and friends would no doubt greatly dislike this farang competition.

As can be noted by the restrictions on what jobs farangs can do.

Rice farming and milling I am pretty sure are right on that list.

Generally intended to keep multi-nationals at bay,

it also applies to farangs with wife in business.

I was expecting negative posts Animatic. If you start talking about getting shot and dumped in ditches I think you watch too many Mafia movies.

How many Farang have been shot and dumped in ditches who were trying to do some work or set-up a business in the N-East?; you tell me, since you will probably know.

Apart from that, the wives are Thai and can unite the farmers and set up a rice mill; the Farang can set up the sales business abroad and/or in BKK, the official way via a Thai entity with Thai shareholders, likely to be joined by the farmers cooperation.

What's wrong with that ?

If you say it's impossible, explain why it WAS possible for a bunch of N-Eastern Thai farmers who joined forces and DID something, instead of the writing by a negative Farang who says "not-possible...you will get shot"...

I have a lot more respect for those farmers than I have for you, being negative.

"With any hope of a new agricultural policy stalled over political bickering, one group of farmers near the north-eastern town of Ubon Ratchathani have decided to try to lift their living standards by themselves.

They have joined forces to run their own rice mill, and they are saving on escalating fertiliser costs by recycling cow dung and growing organic jasmine rice.

"I wondered why so many farmers were abandoning their farms," said Tongsuan Sodapak, the local teacher whose idea it is. "Then I realised that our problems with debt and crop prices would never be cured just by waiting for the government to help."

This group of farmers has been fortunate, because they have been able to make contact with a buyer for their organic rice in Italy....".

http://www.thaivisa.com/forum/Thailand-s-M...01#entry2872301

Negative posters.....

LaoPo

[dee123]

Isn't this a classic case for the"Fair Trade" logo ,...like the imported coffee we now see regularly on our Supermarket shelves.Recognising that the very small farmer in Issan has a need to make a living as well as the supersize farmer in the central plains.Working as a co-operative under strict fair-trade scheme.I believe there is a rice cartel so this might make things awkward.The western consumer is now prepared to pay a little extra for ethically sourced product.No need for us to make money,I talked to my wife about this when I read the BBC report,she claimed the weather was a big hurdle in the North-east (droughts and floods)but for what its worth Laopao a reasonable idea and do-able with commitment.

Edited July 15, 2009 by dee123

[dee123]

Of course if the big western Supermarkets wanted to they could make the whole world "fair trade" ,....but then again thats why we are in this mess in the first place!......Here in UK I have been bugging(sending emails and speaking to Branch managers) about biodegradeable disposable goods,which I use to hold Thai food for our Event Catering business,these are now being produced by companys like "GOODLIFE" who's boss said getting into the big Supermarkets "is a hard nut to crack" at Supermarket Hoo Hing they didn't want to know,even though they are cheaper and more effecient than their plastic rival!I am afraid the supermarket policy's are primarily concerned with making profit for their shareholders.

Edited July 16, 2009 by dee123

[ding]

My wife's family are rice farmers.

She says mold is another problem along with weather/water. A commercial grade dehumidifier would add to the cost of a mill, or storage. What do well run mills do?

She agrees that there is a Chinese-Thai cartel, and that there would be danger in cutting them out. Maybe a 'Fair Trade' organization and high profile government involvment would provide cover. Still, I'd want to set up a corporation in a western country and stay anonymous. Sounds like a good idea though, a win-win.

We're interested in looking at it.

I buy fair trade stuff when times are good, not as much now, however.

[losworld]

Thailand's misguided rice policy

By Jonathan Head

BBC News, Bangkok

The first rains of the year have been falling for a couple of months now in Thailand's often dry north-east, and farmers are out most days in the freshly-flooded fields, transplanting young jasmine rice seedlings.

They work quickly, bent over double, expertly spacing the seedlings in the silt.

Rice farmers are some of the poorest people in Thailand

But it is back-breaking work. And although jasmine is one of the most highly-prized rice varieties – it is grown almost exclusively in north-eastern Thailand – the farmers in this region are some of the poorest people in the country, most of them mired in debt.

Lack of investment

Their problem, says veteran rice researcher Kwanchai Gomez from Bangkok's Kasaertsart University, is a chronic lack of investment in rice farming.

Very little of the north-east – one of Thailand's most populous regions – is irrigated.

"Water is the most important thing that guarantees low risk," she says.

"And risk is the main problem for farmers. One year no rain, the next year floods. So you have to get a loan. Then your crop fails, and you get into debt."

When world rice prices soared last year, everyone assumed that farmers in Thailand – for many years the world's top rice exporter – must have done well.

Some did. But only those in the central plains region, which get irrigation from the Chaophraya River.

They grow up to three crops a year, mostly higher yield varieties than jasmine.

That is where most of Thailand's exports come from.

The indebtedness and poverty of farmers was ignored for decades by governments in Bangkok.

Other nations are threatening Thailand's place as the top rice exporter

Then in the 2001 election, a wealthy telecoms tycoon, Thaksin Shinawatra, drew up a platform of policies aimed directly at farmers, like debt forgiveness and a village loan fund.

It proved a stunningly successful vote-winning strategy, delivering Mr Thaksin three successive election victories, before he was ousted by a coup in September 2006.

But many of those policies have done less for farmers than Mr Thaksin claimed.

Rice mortgage

One, in particular, is proving a huge headache for the current government, led by his main rival, the Democrat Party.

" I realized that our problems with debt and crop prices would never be cured just by waiting for the government to help "

Tongsuan Sodapak

It is called the rice mortgage scheme. The idea is to help farmers ride out price volatility by allowing them to sell their rice to the government at a guaranteed price.

Farmers usually have no way to store or process their rice, so they are all forced to sell at once at harvest time, allowing the millers – who do have these facilities – to bargain down the price and take most of the profit.

But the scheme has become riddled with corruption, and benefits only a minority of farmers.

"Most of them, unfortunately, are rich farmers with irrigation," says economist Nipon Poapongsakorn from the Thailand Development Research Institute.

"Poor farmers in the north-east don't have a surplus of rice to sell, so they don't benefit from this policy at all. It is a pro-rich, pro-business policy".

The scheme is also very expensive for the government, especially now, because last year – when rice prices were unusually volatile – a weak government, led by Mr Thaksin's allies, set the guaranteed price too high.

Those with rice to sell would only sell to the government. Rice traders, like Asia Golden Rice - one of Thailand's most successful - found it difficult to procure supplies at competitive prices for their overseas customers.

"We might even lose our number one ranking as a rice exporter to our competitors," says Saranyu Jeamsinkul, deputy managing director for Asia Golden Rice.

"We are at least $100 a tonne higher than Vietnam - so it is rather difficult to export at the moment".

Sorting the mess

The government has ordered Deputy Prime Minister Kobsak Sapavasu to sort out the mess.

He estimates it has already cost 11 billion baht ($325m) just to process and store crops bought under the mortgage scheme.

And because rice prices have fallen this year, when the government sells the stocks he estimates it will lose another 20 billion baht ($590m).

The escalating price of rice has not made many Thai farmers any richer

"The numbers are just unbelievable," says Mr Kobsak.

But his attempts to close down the mortgage scheme, and replace it with a simpler subsidy, have been blocked by his own coalition partners.

There is a strong suspicion, shared by Mr Kobsak, that a lot of politicians are making money out of the scheme – perhaps from bribes from warehouse-keepers storing it, or traders trying to buy at bargain prices.

With any hope of a new agricultural policy stalled over political bickering, one group of farmers near the north-eastern town of Ubon Ratchathani have decided to try to lift their living standards by themselves.

They have joined forces to run their own rice mill, and they are saving on escalating fertiliser costs by recycling cow dung and growing organic jasmine rice.

"I wondered why so many farmers were abandoning their farms," said Tongsuan Sodapak, the local teacher whose idea it is. "Then I realised that our problems with debt and crop prices would never be cured just by waiting for the government to help."

This group of farmers has been fortunate, because they have been able to make contact with a buyer for their organic rice in Italy. Most other farmers in the north-east have no way of marketing their jasmine rice, despite its famed fragrance and flavour.

Thailand's long preoccupation with being the number one exporter should now shift, says Nipon Poapongsakorn - to a strategy of marketing Thai rice for its quality and variety.

One retailer in Bangkok has made a start in promoting Thailand's 81 rice varieties. Gourmet Market, a luxury supermarket chain, has bins of different kinds of rice, explaining exactly which region they come from, and their characteristic. It is a bit like the terroir of wine.

"We have people coming here from places like Hong Kong," says company vice president Lakana Naviroj. "They take rice home, because they don't have the variety and quality we have here."

One supermarket alone, though, will not give Thailand's rice the impact it could have on global markets. That requires a concerted drive coordinated by different government agencies, something that seems unlikely in today's volatile political climate.

At the school where Tongsun Sodapak teaches, when he's not helping grow to rice, I asked a group of teenage girls - nearly all of them the children of farmers - how many of them would be happy to stay on the farm when they left school.

Only four, out of 34, raised their hands.

Story from BBC NEWS:

http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/8130187.stm

LaoPo

Maybe no gov't funding or direction due to certain elites "who lend the money then repossess the land time and time again? Does this have something to do with it?

Edited July 16, 2009 by losworld

[animatic]

Cooperation and Unification are the key words

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

The women should go out and unite the farmers. Talk to them, unite and set up their own rice mill, together with:

a few Farang (married with the latter) who should unite and cooperate as well and set up a company with a website in English, Spanish, French, Italian, German and some other languages. Invest some money together and have the website content translated by an official translation bureau.

The two companies - the Rice Mill and the Sales Organization should cooperate and work together with salespeople (maybe even trusted relatives) in the agriculture business in their various home-countries and promote and sell the various rice varieties.

It would benefit the farmers a great deal whilst there will be an attractive profit for the Thai wives and their Farang husbands, surpassing the rice mills, owned by large companies, at the same time.

One has to start somewhere...

LaoPo

Wouldn't it need the imput from a third party, to organise and perhaps assist in financing the operation?? Most farang husbands don't have the sort of money required to set up a medium sized mill...it looks as if it would be a perfect chance for an aspiring politician or go gettum university?

Great idea tho! World Bankish, perhaps??

It also sounds like a lovely way to get shot and dumped in a ditch....

The local puya millers and friends would no doubt greatly dislike this farang competition.

As can be noted by the restrictions on what jobs farangs can do.

Rice farming and milling I am pretty sure are right on that list.

Generally intended to keep multi-nationals at bay,

it also applies to farangs with wife in business.

I was expecting negative posts Animatic. If you start talking about getting shot and dumped in ditches I think you watch too many Mafia movies.

How many Farang have been shot and dumped in ditches who were trying to do some work or set-up a business in the N-East?; you tell me, since you will probably know.

Apart from that, the wives are Thai and can unite the farmers and set up a rice mill; the Farang can set up the sales business abroad and/or in BKK, the official way via a Thai entity with Thai shareholders, likely to be joined by the farmers cooperation.

What's wrong with that ?

If you say it's impossible, explain why it WAS possible for a bunch of N-Eastern Thai farmers who joined forces and DID something, instead of the writing by a negative Farang who says "not-possible...you will get shot"...

I have a lot more respect for those farmers than I have for you, being negative.

"With any hope of a new agricultural policy stalled over political bickering, one group of farmers near the north-eastern town of Ubon Ratchathani have decided to try to lift their living standards by themselves.

They have joined forces to run their own rice mill, and they are saving on escalating fertiliser costs by recycling cow dung and growing organic jasmine rice.

"I wondered why so many farmers were abandoning their farms," said Tongsuan Sodapak, the local teacher whose idea it is. "Then I realised that our problems with debt and crop prices would never be cured just by waiting for the government to help."

This group of farmers has been fortunate, because they have been able to make contact with a buyer for their organic rice in Italy....".

http://www.thaivisa.com/forum/Thailand-s-M...01#entry2872301

Negative posters.....

LaoPo

Two points.

1 ) I didn't say I didn't like the idea,

I just pointed out two real drawbacks.

Mainly the vested interests do NOT like interlopers

and this likely would be met harshly.

And it is likely against Thai law at the moment.

2 ) You never commented on the fact farangs are prohibited by law

from working in this sector of the economy.

You talk like you think I want Issan farmers to remain poor, which is very far from the case.

Pointing out negatives is part of looking at the WHOLE picture.

The point was not about THAI FARMERS collectivizing amongst themselves.

But about the farang component in that mix.

I could care less if you respect me or not.

But looking at ALL sides to an issue Pro and Con is not negativity, it is prudent forsight.

But I guess you don't respect a global view on an issue either.

Edited July 16, 2009 by animatic

[LaoPo]

Two points.

1 ) I didn't say I didn't like the idea,

I just pointed out two real drawbacks.

Mainly the vested interests do NOT like interlopers

and this likely would be met harshly.

And it is likely against Thai law at the moment.

2 ) You never commented on the fact farangs are prohibited by law

from working in this sector of the economy.

You talk like you think I want Issan farmers to remain poor, which is very far from the case.

Pointing out negatives is part of looking at the WHOLE picture.

The point was not about THAI FARMERS collectivizing amongst themselves.

But about the farang component in that mix.

I could care less if you respect me or not.

But looking at ALL sides to an issue Pro and Con is not negativity, it is prudent forsight.

But I guess you don't respect a global view on an issue either.

Your initial post was negative and NOT positive. If your so called "global" view is about shooting and dumping Farang in Thai ditches it's not very positive, is it ?

I never said that Farang should work locally with the rice farmers but merely to set up a business SELLING rice to the west.

That doesn't have to be done IN the region, not even in Thailand.

In the example in the OP article a group of farmers sold rice to an Italian client OR an Italian client BOUGHT rice from a group of cooperating rice farmers.

Which one would it be ?

With positive attitude, thinking, acting and doing something, a lot can be done as shown by the cooperating rice farmers and Italian client. Negative attitude is killing for an idea or business.

That's why I wrote:

Here lies a golden opportunity for Farang, married with clever and intelligent Thai women not shy of working hard and living in the North East...

LaoPo

[LaoPo]

JULY 15, 2009, 3:07 A.M. ET

UPDATE: Thai Rice Stocks Near 7 Mln Tons - Industry Official

SINGAPORE (Dow Jones)--Thai government milled rice stockpiles are likely to be approaching 7 million metric tons and will probably start being released back into the market soon, a senior Thailand-based industry official said Wednesday.

Under a market intervention program in place since March, aimed at supporting prices for Thai rice farmers, the Thai government said it would build stockpiles of 6 million tons of milled rice by buying paddy directly from farmers at a fixed price of $345/ton.

"I think that level has already been passed - the stockpile is now likely nearing 7 million tons," said Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand.

"It remains unclear when the government will start to release it but it will have to soon - before the main harvest gets underway in November," he said.

While the scheme has helped the country's rice farmers by paying above-market prices, exporters say it places the country's rice export sector in the hands of the government, leaving the private sector at the mercy of government-dictated prices and supply.

Meanwhile, observers have expressed concerns that the huge stockpile will continue to hang over the market.

"How and when the government decides to release the stockpile is critical - if they release it in large quantities then it could obviously effect rice prices. It is important that the rice is released in smallish lots of 300,000-400,000 tons," Chookiat said.

Traders have previously said the government will have to start to release its stocks to free up space ahead of Thailand's main rice harvest, which gets underway in November.

The price at which the stocks will be made available has not yet been finalized, but will likely depend on the market situation at the time, and the stocks will likely be sold through an auction system whereby private exporters bid directly to the government, Chookiat said.

Thailand, the world's biggest rice exporter, had previously forecast that 2009 exports would reach 8 million tons.

Source: The Wall Street Journal/Business section

If the government pays above-market prices to the rice-farmers how come they're still dead poor ?...learning that world-wide consumption is rising ?

It's about time the farmers should be guided by the government to diversify the kind of products they produce

LaoPo

[LaoPo]

Thailand’s paddy politics threaten dominance of rice

A government scheme to buy rice at inflated prices ensures both income and votes but hampers free-market trade in Thai rice

By Peter Janssen - DPA , BANGKOK - Saturday, Jul 11, 2009, Page 9

Four-and-a-half decades ago, Myanmar was the world’s leading rice exporter.

A military coup in 1962 followed by the introduction of socialism swiftly stifled free trade in Myanmar, allowing neighboring Thailand to take the top rice-exporter slot, which it has held ever since.

But populist polices in Thailand’s rice fields are slowly undermining its leading role in the trade.

Thailand is arguably unique in Asia. The country produces more than 18.1 million tonnes of rice per year, of which 9 million tonnes are consumed domestically. The remainder is exported.

“We grow rice for business,” said Chookiat Ophaswongse, president of the 90-year-old Thai Rice Exporters Association. “We’re not like other countries that grow rice because they want to be self-sufficient in food and just export the surplus.”

There are more than 200 members in the association, plus 50 to 60 other exporters who operate freely on the market.

Business has been good. Last year, during the so-called food crisis when India and Vietnam slapped bans on their own rice exports, Thailand shipped more than 9 million tonnes, earning the kingdom 200 billion baht (US$5.6 billion).

Business was especially good for a handful of rice exporters who succeeded in bidding for public rice stocks under the government’s paddy-pledging scheme, which has become a prime player on the Thai rice market over the past eight years.

Under the scheme, the government pays farmers a fixed price for their rice, which is stockpiled in millers’ warehouses and then auctioned off to exporters.

Introduced in 1980, the scheme initially guaranteed farmers rice prices at market levels to allow them to postpone sales to middlemen. Since 2001, after populist politician Thaksin Shinawatra became prime minister, the scheme’s goal was altered to stabilizing rice prices on the local market and boosting farmers’ incomes.

Although admirable in principle, the application of the scheme has proven corruption-prone and advantageous mainly to big exporters and large, prosperous farmers. Furthermore, it has undermined Thailand’s reputation for high-quality rice and skewered the market system.

For instance, this year, because of high prices offered under Thailand’s paddy-pledging system, Thailand’s 100 percent B grade white rice is being priced at US$575 per tonne on the export market, compared with Vietnam’s US$410.

Thailand’s rice exports during the first six months of this year reached 3.7 million tonnes, down 27 percent compared with last year’s shipments, while Vietnam’s rice exports hit 3.4 million tonnes, up 56 percent year-on-year.

Vietnam has kept its prices down partly because it faces tough competition from Pakistan, Cambodia and Myanmar, all of which sell lower-quality rice than Thailand.

That reputation for high-quality rice is being swiftly undermined by the government’s paddy-pledging scheme, which is encouraging Thailand’s neighbors to smuggle their rice into Thailand to benefit from the higher local price.

“Every year, at least 500,000 tons [453,500 tonnes] is coming across the border into Thailand,” Chookiat said. “This is huge.”

It is likely to get even bigger next year when rice is included in the ASEAN Free Trade Agreement, which is to impose low import taxes on the regional rice trade.

“The quality of Thai rice has dropped, partly because of the smuggled rice from neighboring countries and partly because our own farmers don’t care about quality anymore because whatever they grow, they can sell to the government,” Chookiat said.

Past Thai governments did not care because they benefited from kickbacks from a handful of big exporters with political connections and votes from happy farmers, said Nipon Poapongsukorn, president of the Thailand Development Research Institute think tank.

“The paddy-pledging program gives the politicians both votes and money,” Nipon said. “It’s win-win.”

The institute, which estimated the government spends up to 200 billion baht on the paddy-pledging and similar schemes for other crops, has proposed the government switch to an insurance plan that would cover the costs and a small profit margin for farmers, but keeps the government out of the rice trade.

Thai Prime Minister Abhisit Vejjajiva is reportedly considering the change, but it is unlikely his Democrat-led government will be around for long to implement it.

Thailand’s options are few, Nipon said. Either the government must find the will to change its price-support system or bow out to others in the rice race.

“If the dictators went away, Myanmar would become our major competitor within a few years,” he said.

“Sooner or later, we are not going to be the world’s No. 1 rice exporter, but we should maintain our position as the world’s No. 1 exporter of quality rice,” Nipon said. “That’s the direction we should go in.”

Source: Taipei Times http://www.taipeitimes.com/News/editorials...7/11/2003448344

LaoPo

[Thai at Heart]

Unfortunately, years of discouraging the farmers from forming proper co-operatives has let them get messed around by the exporters.

Thailand has some of the best quality rice in the world, but to this day, very little of the profit from it's export feeds back to the farmer.

Only in a country as corrupt as Thailand could there be 100's (maybe 1000's) of fragmented exporters passing supply between themselves whilst adding almost no value to the food chain.

[Thai at Heart]

Unfortunately, years of discouraging the farmers from forming proper co-operatives has let them get messed around by the exporters.

Thailand has some of the best quality rice in the world, but to this day, very little of the profit from it's export feeds back to the farmer.

Only in a country as corrupt as Thailand could there be 100's (maybe 1000's) of fragmented exporters passing supply between themselves whilst adding almost no value to the food chain.

[Ned]

Recently I met a few growers of cha-om, a fragrant plant used in cooking. They told me they're forced to sell the crop to certain buyers who market it at ten times what they give the growers. I asked them what would happen if they tried to market the stuff themselves. They reckoned that the first time they'd have their legs broken and if they tried it again they'd probably be bumped off. That's agro business Thai style folks.

[animatic]

I see I am not the ONLY one willing to mention the negative repercussions of Cartel busting....

I don't imagine one can create a collective to market rice without a facility on the ground;

anti-mold/moisture storage, etc. That needs to be built with money from outside,

and that is not something an external company can do... or they WOULD HAVE now.

Add to that the sector specific ban on farangs in the rice industry,

and the difficulty for investment by non-indigenous companies,

and you build some large disincentives to it actually getting done.

Even as it IS conceptually a great idea.

Don't shoot the messenger.

That said there is a dire need for scrapping the current system.

The money for the original planting and harvesting needs to get to the farmers hands.

The idea of an crop insurance is a pretty good one at first blush.

If the crops fail they are not left hanging, and get a small profit and don't lose their farms.

Add to that serious additions to regional irrigation systems.

Edited July 17, 2009 by animatic

[slapout]

There are various farm coop's set up though out the world which are successful and could be used for a pattern. This type of organization has been successful for several generations in the real world. In fact it can be traced back to Roman times to some degree. In fact the latter case seems to have a lot of similarities between present day Thailand and the early Roman empire as far as the thinking of elite vs labor class. The first thing needed is that the farmers must decide if they want future generations to have a better life style and how/what are they willing to sacrifice to achieve this goal. Mobil phones, etc do not enter the process. This topic is directed toward rice but the entire farm production goes thru the same process. The 'middle men' in many cases are not using their resources/money to buy product, so the farmer must wait for his money until the product has been sold up the ladder (this is in most cases not the consumer) Those middle men (political favorites) in many cases borrow the seed money from the top of the chain at a high interest rate, guess where this expense goes? Farmers product price is lowered.To change/improve the system to benefit the farmer by a fair percent will require a few knock down drag outs, blood shed, crop destruction, etc. Most countries of the world have refered to this type of behavior as Revolution, Civil war, War of independence, etc.

[JohnC]

So where does the domestic rice farmer take his rice to achieve the guaranteed government price of 15 baht per kilo? At present they are being offered 6 baht a kilo in Buriram where the harvest is ready albeit slightly early this year.