Thai Rice Booms For All But The Growers

[webfact]

EDITORIAL

Thai rice booms for all but the growers

By The Nation

If farmers remain poor while others flourish, then something's amiss

Thailand may be proud of being the world's largest rice exporter again this year with an estimated 9-9.5 million tonnes of rice to be shipped overseas. But few rice growers in the kingdom are sharing in that national glow of goodwill, judging by their plight.

Last month a group of Thai farmers representing families in 22 provinces in the Central Plains closed a highway in Ayutthaya in a protest to express their anger at falling rice prices. Blocking highways has always been their favourite protest method when their demands are not met by the government.

Thai farmers are angry because they are poor and landless. They have to rent farmland at a high cost to grow rice that relies on costly fertiliser. Subject to rice price control, their produce emerges from the field cheaper than the production cost. That's when trouble comes.

On the whole, prices of paddy took a tumble this year, according to the Commerce Ministry, to Bt8,500 a tonne from Bt9,400 in early February. The farmers protesting in Ayutthaya demanded Bt14,000 per tonne to cover high overheads, but the government believed even Bt9,000 per tonne was too high. Meanwhile, fragrant paddy dropped from Bt14,800 to between Bt12,000 and Bt13,000 a tonne.

The fall reflected large stockpiles in the country held by companies after some rice exporters could not sell rice they had purchased from the government, because Vietnamese rice was priced lower.

The National Rice Policy Committee this week is considering a request by farmers for a higher benchmark price for rice under the insurance programme in the 2010-11 crop year, to reflect rising costs.

Bearing the brunt of the slump, farmers demanded the government increase compensation to them as well as enlarge the quota of compensation to each household.

As for bagged rice, the Commerce Ministry has no plans for a price hike, saying production costs have yet to increase.

The average price of a five-kilogram bag of rice is between Bt100 and Bt130, with jasmine rice prices of between Bt160 and Bt200 for the same weight bag. But there's been global demand of late and remarkable growth in rice exports over the past two months.

However, the protesting farmers complained that the higher production costs for fertiliser, rental fees, transport and other expenses had lowered their income and profit.

What we see are flourishing rice millers and bagged rice sellers. We have never seen rice millers or CEOs of leading bagged rice producers take to the streets to protest low rice prices.

Farmers' demands for state assistance tend to fall on deaf ears. It's puzzling why demands such as salary hikes for lawmakers and executives of local administrative organisations tend to receive more positive responses.

The point is why our hard-working farmers, themselves the backbone of our country, remain the poor, landless, powerless underdogs? Their image is in stark contrast to that of well-off rice millers and bagged rice producers. You will never hear terms like 'poor' rice millers, or 'poor' bagged rice producers in this country, even when there is a drop in rice prices.

Farmers have been poor and mistreated for too long. They may have themselves partly to blame in that their managerial skills and know-how are limited. There's also little new technology introduced in our rice farming sector. Our investment in research and development for the sector is far lower than in some of our competing rice-growing neighbours.

Water resources and logistics have often been mismanaged. Large parts of our rice fields were flooded in the last rainy season. They still use trucks to carry the produce. These problems tend to repeat themselves annually. All this culminates in farmers closing roads, or dumping paddy at Government House.

Let's face it. If farmers are poor, and yet others continue to flourish, then there's something amiss in our rice sector.

-- The Nation 2011-03-14

[ginjag]

Reading this I get the impression that it's the farmer that is demanding a bigger cut, because of his overheads. SO now lets give a thought to the ones that do not rent land/or own it and its not even their rice. These are the farm WORKERS, those are the people who are the forgotten ones, these are the backbone of the paddy fields, NOT the renters or the owners of land, the farmers have a voice the WORKERS dont. I,m sticking up for the workers and again find myself bashing the farmer-and middle men. sorry ed.

[Footloose1949]

It's about time this issue was addressed, as in many countries, the producer, be he a farmer working the family fields, and the workers he employs, get one hell of a raw deal from the buyers, and everyone else above them. Ok so some farmers produce enough to feed themselves with rice and sell off the excess, but that's pretty well what any farmer does world-wide. One can quite see why farmers and those in the north and northeast and not in the big towns and cities, get upset about the big differences they see in their income and standard of living in comparison to office workers. The King has undoubtably done a lot for decades to improve the lot of poorer people, but I suppose those with the money, want to keep or increase their margins and improve their standard of living, with little regard to those who they make their money from. Do other countries subsidise their farmers (directly or indirectly) to a greater extent than Thailand does, to enable them to undercut the price of rice which is exported?

In my country, (The UK) the middle-men take a bigger cut than they should, and it's suspected by some, that the big supermarkets, also own the middle-men, and use this to make it look like there is little profit made by them, because of the price the wholesalers charge them, when it could well be that by owning the wholesaler, they are masking the profit they are actually making via another part of the company. There are COOPs in Thailand, and I hope it occurs to farmers involved in these, that they could set up within this system a buyer/wholesaler network which then sells directly to the millers, and they end up getting better prices for their rice.

[MILT]

I understand what you are saying, but have to comment on that the farmers are the workers, and most rice production is done in a similar fashion as a co-op system. Maybe for the people renting land to grow rice, they would have workers, but on the whole most farmers could not support employees to work the paddy's. Peace

Reading this I get the impression that it's the farmer that is demanding a bigger cut, because of his overheads. SO now lets give a thought to the ones that do not rent land/or own it and its not even their rice. These are the farm WORKERS, those are the people who are the forgotten ones, these are the backbone of the paddy fields, NOT the renters or the owners of land, the farmers have a voice the WORKERS dont. I,m sticking up for the workers and again find myself bashing the farmer-and middle men. sorry ed.

[Bakseedaa]

Reading this I get the impression that it's the farmer that is demanding a bigger cut, because of his overheads. SO now lets give a thought to the ones that do not rent land/or own it and its not even their rice. These are the farm WORKERS, those are the people who are the forgotten ones, these are the backbone of the paddy fields, NOT the renters or the owners of land, the farmers have a voice the WORKERS dont. I,m sticking up for the workers and again find myself bashing the farmer-and middle men. sorry ed.

easy...stop growing rice, grow corn for fuel production...

[oevna]

I don't know what percentage of the overall Thai population this represents, but most Thai farmers that I know rent their land because they either lost it due to debt, or sold it to buy something big in the past. They must pay the rent on their land, and in addition to that, they often don't have enough people to work the land that they rent, so they hire temporary workers to help. They are pinched by all of these expenses with very thin margins, so they pay the hired workers a very low wage.

[Krungbin]

While in Europe, quite recently, I was rather shocked to see so called "fair trade" Thai rice from the rice co-operative of Surin proposed for sale at 6 euros for 1 kg.

Fair trade?

Six euros are worth Bt240.

Now, let's consider the "best" selling price for paddy mentioned in the article: Bt9,400 a tonne. Quick calculation: milled in optimum conditions, this tonne of paddy will become 700 kg; of rice (I am not even considering the lost of weight due to the drying of the paddy). Meaning a price per kg of Bt13,42...

Who is taking advantage of the difference between these two selling prices? From Bt13,4 to Bt240 means a 1.788% increase! Fair trade?

Considering the ever increasing costs of production, wouldn't you agree that the Thai farmers cropping rice have all rights to protest?

[hammered]

The middlemen need cutting down to size or removing. That will be difficult as they own the mills, machinery, lend the money and becuase of such dominate rural local and national politics. The very people the rural poor vote for are the ones who will ensure they remain poor. In there is the irony and also the lesson of how Thai democracy works. It is about today or this season and nothing else counts and it is easier to hate a Bangkok based figure as they dont have much effect on your life rather than a local exploiter who controls everything and so is beyond criticism.

[witchhunter]

Reading this I get the impression that it's the farmer that is demanding a bigger cut, because of his overheads. SO now lets give a thought to the ones that do not rent land/or own it and its not even their rice. These are the farm WORKERS, those are the people who are the forgotten ones, these are the backbone of the paddy fields, NOT the renters or the owners of land, the farmers have a voice the WORKERS dont. I,m sticking up for the workers and again find myself bashing the farmer-and middle men. sorry ed.

easy...stop growing rice, grow corn for fuel production...

Indeed. A good piece of advising to Thai farmers - do not grow rice or be poor. We have a rice farm and its return is very low, much below than that from corn or cassava. A problem is a small size of the farm (24 rai) so we cannot imply American technology to grow rice. In California, farmers use airplanes for sawing and big tractors to level farms. We cannot afford either Japanese technologies and small tractors for sawing and leveling as prices for rice are low. Instead we use a walking tractor. The contractors take almost all profits but they work very very hard at the rice field. Personally, I wish to stop but my wife will not. It is pride for Thai people to grow rice and we do it despite of low profit. Corn is more profitable but this year cassava bits all other commodities. We plan to grow cassava instead of corn at our other farm field (20 rai). I wish I have more land and have a good tractor and other means to grow corn and rice but because of small size of our farms we cannot afford to have an own one. So, we hire contractors and they charge a lot for their labor. So, owners are not much in profit either but it is yet better than to keep money in any bank for interest rate is below inflation. dam_n banksters and bureaucrats - they get all creme from our milk, literary speaking.

[exbelg]

it is always the middle person that buys at low price from the farmer to sell to wholesaler, transporter and distribution (tesco, big c, etc..) that makes the most money of those poor farmers

so why the government does not supply loanes to those poor farmers to buy the land the cultivate on ?

ah yes, because the mere 1% elite in every country posseses 99% of everything and they surely do not want to give in 1% of their power/wealth

why you think us farangs cannot buy land in this country, even 1 RAI for ourselves to build a home on ? because it would be competetion with the rich chinese elite big land owners

let's not change a thing, they think, as they are rich moreover

[witchhunter]

While in Europe, quite recently, I was rather shocked to see so called "fair trade" Thai rice from the rice co-operative of Surin proposed for sale at 6 euros for 1 kg.

Fair trade?

Six euros are worth Bt240.

Now, let's consider the "best" selling price for paddy mentioned in the article: Bt9,400 a tonne. Quick calculation: milled in optimum conditions, this tonne of paddy will become 700 kg; of rice (I am not even considering the lost of weight due to the drying of the paddy). Meaning a price per kg of Bt13,42...

Who is taking advantage of the difference between these two selling prices? From Bt13,4 to Bt240 means a 1.788% increase! Fair trade?

Considering the ever increasing costs of production, wouldn't you agree that the Thai farmers cropping rice have all rights to protest?

I agree. But Vietnam produces rice even for lower prices. We are second day from a trip to Vietnam. I saw very small farms and very poor people that grow rice. Certainly, profits should be adjusted to give a larger piece of cake to producers. In our days, middlemen and banksters are the people who rape poor farmers and get fat from growing prices for food.

It would be interesting to compare prices for sugar with its cost and profits in Thailand. I bet it is even more shocking proportions. Why producers cannot sell rice at Ebay directly to consumers? Can be a good idea if transportation to Europe can be arranged at low rates. All win-win situation. Of cause, I understand that EU never would accept such an idea. They regulate prices for rice and sugar so that local EU farmers get subsidies while producers elsewhere are much underpaid.

[DP25]

Too much rice is grown using too many people, they should switch to something more valuable. Thailand is the leading rice exporter in the entire world and it brought in $5 billion last year, out of total exports of $196 billion. What percent of workers are growing rice for this amount?

[tim armstrong]

Like so many farmers worldwide, Thai farmers and farmworkers are really hardworking, and go into debt because they are told that a bigger Kubota tractor, more fertiliser, or weed control will increase their yield and hence their income. Many farmworkers her incidentally, do have their own small plot of land. Sounds reasonable? except that like many other farmers, they are woefully ignorant about what happens to their rice once it leaves the farm. They are generally poorly educated and think that marketing is the business of someone else, WHO WILL BE FAIR TO THEM. They have no idea that their product may be sold several times before it reaches the market.

Try asking a local farmer why there is so much difference in the price of rice in the shop, to the price he gets. He'll probably tell you its the cost of transport or handling?? They rarely know how much the middlemen make. But they also don't think they can be middlemen themselves, because they don't have the education. The cooperatives do their bit but are too small, and still largely concerned with production. When/if farmers take over the marketing of their own product, maybe then they will get a fair deal. But will the middlemen/others go quietly ?? This is big international business- It needs some clever sons/daughters of farmers to get into marketing. It also needs some farmers to be really aware of what the larger agrochemical companies are trying to do. ie. patent the rice seed, so it will only grow with their chemicals. I hope Thai farmers come up with someone to champion their cause - and its not Thaksin.

[sirchai]

While in Europe, quite recently, I was rather shocked to see so called "fair trade" Thai rice from the rice co-operative of Surin proposed for sale at 6 euros for 1 kg.

Fair trade?

Six euros are worth Bt240.

Now, let's consider the "best" selling price for paddy mentioned in the article: Bt9,400 a tonne. Quick calculation: milled in optimum conditions, this tonne of paddy will become 700 kg; of rice (I am not even considering the lost of weight due to the drying of the paddy). Meaning a price per kg of Bt13,42...

Who is taking advantage of the difference between these two selling prices? From Bt13,4 to Bt240 means a 1.788% increase! Fair trade?

Considering the ever increasing costs of production, wouldn't you agree that the Thai farmers cropping rice have all rights to protest?

When I first moved to my wife's village about 10 years ago, I used to live in a tiny village in the lower northeast.

I also went to harvest rice, no machines to help us. Believe me being a farmer here pretty much sucks.

No factories, or places to find work. Farmers are the most uneducated people in this country. But others rip them of, paying nothing for their rice. Poverty's causing people to drink and take drugs. Time for a change.............:jap:

[MaiChai]

I have lived in Thailand 15 years or so, and currently the country people are the poorest I have seen them. Not sure what the answer is; maybe in Laos or Vietnam because of communism there is greater help from the state and cooperatives? Not saying communism is the answer, but each Thai/family group works on their own; there is some cooperation between families, etc, but not enough to make a huge difference. Also costs have rocketed; fuel, machinery, fertilizer, etc.

Thailand really is becoming a country of two types of people: rich city people (factory/office workers/owners) and poor country farmers. Probably the government need to do much more to help the farmers? Seems like the factory owners seem to be able to take care of themselves (mostly foreign owned/partnerships?).

[Huey]

Really it should be even lower to compete with Vietnam. There is no reason for it to be this high.

[jimbeam1]

I thought there was going to be a massive shortage because of the floods. So prices were going to be sky high.

On another note what a sick society this is. The poor farmer as we hear all the time gets a pittance. Somehow from the farmer up big bucks are made. Did someone earlier mention fair trade?

jb1

[teetersb]

Does anyone know where to find the prices of rice in Thailand for the last 10 years, or so? I did a brief search but didn't find what I was looking for. I would like t find out how much the paddy prices were, preferably in chart form. Any help would be greatly appreciated, Thanks

[Nisa]

Where in the world does a family farmer have it good? There is a reason all across the globe populations are moving to the cities. And if these people are not land owners then they are not "the farmer" but simply farm workers ... same type of uneducated illegal aliens you see working on farms for peanuts in other countries.

The fact that Thailand is the number one exporter of rice might be a good indication that it is not a wise business to be in for the small farmer. If a number of them moved on to different crops or sought different business ventures then the price of rice would go up and those remaining will make money.

Just seems like a silly thing to blame other about unless Thailand is selling rice well below the market value but it has always been my understanding these farmers are guaranteed prices up front from the government.

Edited March 15, 2011 by Nisa

[Nisa]

I have lived in Thailand 15 years or so, and currently the country people are the poorest I have seen them. Not sure what the answer is; maybe in Laos or Vietnam because of communism there is greater help from the state and cooperatives? Not saying communism is the answer, but each Thai/family group works on their own; there is some cooperation between families, etc, but not enough to make a huge difference. Also costs have rocketed; fuel, machinery, fertilizer, etc.

Thailand really is becoming a country of two types of people: rich city people (factory/office workers/owners) and poor country farmers. Probably the government need to do much more to help the farmers? Seems like the factory owners seem to be able to take care of themselves (mostly foreign owned/partnerships?).

Thailand has significantly less people living in poverty than 15-years ago and considerably less than its communist neighbors. Laos & Cambodia have about 40% of their people living below poverty level while Thailand is at about 10% ... Vietnam is about 15% where Thailand was about 10-years ago.

[Nisa]

While in Europe, quite recently, I was rather shocked to see so called "fair trade" Thai rice from the rice co-operative of Surin proposed for sale at 6 euros for 1 kg.

Fair trade?

Six euros are worth Bt240.

Now, let's consider the "best" selling price for paddy mentioned in the article: Bt9,400 a tonne. Quick calculation: milled in optimum conditions, this tonne of paddy will become 700 kg; of rice (I am not even considering the lost of weight due to the drying of the paddy). Meaning a price per kg of Bt13,42...

Who is taking advantage of the difference between these two selling prices? From Bt13,4 to Bt240 means a 1.788% increase! Fair trade?

Considering the ever increasing costs of production, wouldn't you agree that the Thai farmers cropping rice have all rights to protest?

How much did it cost to ship that rice to the UK, transport it to the store and package it for sale in the UK (not to mention import taxes)? How much profit is being made by the grocer and all the people who worked to get that rice to the UK?

[ginjag]

I have lived in Thailand 15 years or so, and currently the country people are the poorest I have seen them. Not sure what the answer is; maybe in Laos or Vietnam because of communism there is greater help from the state and cooperatives? Not saying communism is the answer, but each Thai/family group works on their own; there is some cooperation between families, etc, but not enough to make a huge difference. Also costs have rocketed; fuel, machinery, fertilizer, etc.

Thailand really is becoming a country of two types of people: rich city people (factory/office workers/owners) and poor country farmers. Probably the government need to do much more to help the farmers? Seems like the factory owners seem to be able to take care of themselves (mostly foreign owned/partnerships?).

O.K. We know most of the profits are going to the Hi SO's Who have built vast aircraft style hangers, massive house on the outskirts of each town. Storage sheds 55555555......there is where most money is going.

If no one is helping the farm workers OR farmers with small plots, Then the farmers in the meantime have to try as always to help themselves. Next to my house we have a family farm, before buffalo worked, now all the latest machines to plow and reap, others farming in the village help them with the planting etc., Then each one helps in turn for free, so they dont have to pay other workers..........They all have enough rice to store for the off season, and sell the rest. But this is nothing in terms of income, it only buys new seed and fertilizer for the next season. This is your typical farm local style. do not forget that this is done with the latest machinery..............if they are strapped for cash.... will they get out of mothballs the redundant BUFFALO ???..Do not forget though that this small farmer who abandoned his buffalo, paid over 1 million bht for his new machines !!!!!!... hardly cost effective. He would be better off with goats, dairy, rubber, but this is what he has always done, so he will have to keep doing it as his grandfather did it ???

Now we go on to the next tier, Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Then we get the big boys who have all the lot in one, vast fields, wharehouses, milling, you name it.

Edited March 15, 2011 by ginjag

[Nisa]

Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Wow, those workers are making more than many BKK workers where the cost of living is incredibly higher.

[ginjag]

Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Wow, those workers are making more than many BKK workers where the cost of living is incredibly higher.

Not forgetting though this is seasonal nisa..........in between though some will be cock fighting, gambling, knocking back the odd lao kao. 55555 O.k. they dont get much dosh, but some don't spend it wise...............

[IanPrince99]

Would you rather see Thai Farmers rich & Thai Urban Elite poor?

[teetersb]

Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Wow, those workers are making more than many BKK workers where the cost of living is incredibly higher.

Not forgetting though this is seasonal nisa..........in between though some will be cock fighting, gambling, knocking back the odd lao kao. 55555 O.k. they dont get much dosh, but some don't spend it wise...............

It's the same in Surin. During rice harvest the going day labor rate for harvest is 230-240B, up from 200B 2 years ago. I had one small 8 rai field harvested with a combine in 3 hours, while the family did the 6 rai by hand, which took over 5 days. Cost for the combine was about 2000B, and the cost for manual labor (2 people) was the same, but took much longer.

[whybother]

Would you rather see Thai Farmers rich & Thai Urban Elite poor?

"Urban elite"

[Nisa]

Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Wow, those workers are making more than many BKK workers where the cost of living is incredibly higher.

Not forgetting though this is seasonal nisa..........in between though some will be cock fighting, gambling, knocking back the odd lao kao. 55555 O.k. they dont get much dosh, but some don't spend it wise...............

The rest of the year they also get to make upwards of 1000 baht a day vacationing in beautiful BKK outside the largest malls.

[ginjag]

Where there is the better off farmer who has a vast amount of land to farm for rice/sugar cane etc. he will employ workers and pay approx 230 bht a day.

Wow, those workers are making more than many BKK workers where the cost of living is incredibly higher.

Not forgetting though this is seasonal nisa..........in between though some will be cock fighting, gambling, knocking back the odd lao kao. 55555 O.k. they dont get much dosh, but some don't spend it wise...............

The rest of the year they also get to make upwards of 1000 baht a day vacationing in beautiful BKK outside the largest malls.

a..%...you may be right, but I doubt.......................my other point I wanted to make is the new K. tractors that are the rage in Issan, at a cost of 699,000 bht..........and are redundant for a big % of the year. why do the small farmers buy them??? if they rent at 5,000 bht a plough x how many--little----------then again after harvest--it's a fraction over years, compared to the outlay, They borrow cause it's easy--giving up the deeds--and house deeds to get these tractors. If you have one in the area you are 'UP' and a status symbal. Many people who keep their heads above water-Hire these for the job. IT'S this borrow easy thing that cripples most of the poor. the same with the m/cycles deposit 900 baht---2000 a month for 3 years--double the original price. I really do feel sorry for them--but maybe thats why I tend to bash at some of their decisions.

Edited March 15, 2011 by ginjag

[swillowbee]

"Farmers' demands for state assistance tend to fall on deaf ears. It's puzzling why demands such as salary hikes for lawmakers and executives of local administrative organisations tend to receive more positive responses."

... not really so puzzling ... indemic corruption ... deformed feudal system ... inferior cultural values ... blah, blah, blah, hubba, hubba, hubba.

... the Reds are coming, and there is nothing that will stop them ... think ignorant feudal peasants lured into indentured servitude to the feudal lords' land, finally rising up ... seems to me that a fundamental social change is bearing down on Thailand ... grown intolerant, it will drive political change ... and if political change does not come, then less civil solutions will be sought.

... ("They've got the guns, but we've got the numbers." -- Jim Morrison)

... I do not feel good about what could transpire during and after this election.