Why Politicians Keep Talking About Farmers' Poverty: Thai Talk

[webfact]

THAI TALK

Why politicians keep talking about farmers' poverty

Suthichai Yoon

The Nation

Why is the Thai farmer still poor despite the fact that Thailand has been the world's leading rice exporter all along?

Every politician has his own "policy" to better the lot of our farmers, but nothing seems to have worked. All political parties talk about their "ultimate solution" to raise the standard of living of the country's "backbone". But our farmers remain the poorest members of society.

Study after study has been conducted by the country's top academics. No aspect, it seems, of the farmers' problems has been left unturned. But for the average farmer, it seems that the more things change, the more they remain exactly the same.

Do we know the root causes of our farmers' poverty? Apichart Chongsakul, secretary-general of the Office of Agricultural Economics, has come up with a comprehensive wrap-up of the reasons behind the Thai farmer's plight.

It all stems from the state of monopoly in the whole agricultural process - from the market for production factors such as chemical fertilisers, insecticides and seeds all the way to the final sale of paddy.

When the rice price rises, fertilisers in turn get more expensive, for whatever reason. The prices of insecticide also go up when farmers just begin to enjoy a higher level of income in any particular season. That means despite better paddy prices, farmers don't usually end up earning more.

What's worse, when they sell their paddy to rice mills, what the farmer gets is usually a depressed price that is much lower than the market price. The reason is simple: he just isn't in a position to bargain with the rice-mill operator.

As a result, the farmer doesn't benefit from the difference between the price of paddy and milled rice.

As Apichart - who takes a close-up look at the end-to-end cycle of a farmer's life - concludes: "Even if the price of rice shoots up to Bt20,000 per ton, the farmer doesn't stand to gain in any significant way."

Doesn't the government realise that the state of monopoly at every stage of the rice farming process is the core reason behind the failure to boost our farmers' livelihoods.

Of course, every past government is well aware of the existence of this state of affairs. But the lack of political will and the corrupt practices inherent in the paddy subsidy and price guarantee schemes have contributed to the inevitable and continuing failure.

Farmers get lots of attention from politicians - not because politicians are serious about plucking them out of their long-entrenched poverty, once and for all - but because they form a bloc of votes that can easily sway election results.

Worse, the paddy subsidy policy adopted by the most "caring" and "populist" governments - past or present - offers a channel through which politicians and their associates can siphon off people's tax money into their own pockets.

An attempt to provide reasonably priced fertiliser to farmers, aimed at breaking the private sector's monopoly in this field, has failed miserably. A state enterprise called the National Fertiliser Corporation was set up years ago for that very purpose. It was soon clear that while the objective might have been praiseworthy, the implementation, not unexpectedly, got bogged down in bureaucracy. Its demise didn't come as a surprise to anyone in the business.

And if Thailand's paddy yield per rai has been lower than other rice-producing countries, despite the fact that we are the world's leading rice exporter, the main reason is the lack of sufficiently irrigated areas. (Compare Thailand's figure of 25 per cent in this, to Vietnam's 85 per cent.)

Do the authorities realise this? It's the obvious case that has been cited by every study into the issue. But when it comes to tacking the problem seriously, no government has so far shown any vision or any ability to get down to finding solutions to produce tangible results.

Cynics might say that politicians want to make sure that farmers remain poor so that they can be easily exploited every time an election comes around.

You don't want to believe such a depressing theory because if you do, it means you have given up on both democracy and the future of this country.

-- The Nation 2011-12-22

[exeter]

I think its not just the farmers who remain relatively poor, its the same for the street traders as well where you get you snacks, fruit or whatever, they are all just trying to make a living, its a struggle here for the majority, a minority seem to be able to do very nicely though no matter what, today its the farmers and rightly so, give them a fair crack of the whip. But please dont forget the street traders either they deserve better as well.

[whybother]

I think its not just the farmers who remain relatively poor, its the same for the street traders as well where you get you snacks, fruit or whatever, they are all just trying to make a living, its a struggle here for the majority, a minority seem to be able to do very nicely though no matter what, today its the farmers and rightly so, give them a fair crack of the whip. But please dont forget the street traders either they deserve better as well.

Street traders usually don't need to deal with monopolies when buying and selling their goods. They have a choice of what they sell, where they sell it, and the price they sell it for.

[JurgenG]

I think its not just the farmers who remain relatively poor, its the same for the street traders as well where you get you snacks, fruit or whatever, they are all just trying to make a living, its a struggle here for the majority, a minority seem to be able to do very nicely though no matter what, today its the farmers and rightly so, give them a fair crack of the whip. But please dont forget the street traders either they deserve better as well.

“The comfort of the rich depends upon an abundant supply of the poor.” ― Voltaire

[Reasonableman]

I think its not just the farmers who remain relatively poor, its the same for the street traders as well where you get you snacks, fruit or whatever, they are all just trying to make a living, its a struggle here for the majority, a minority seem to be able to do very nicely though no matter what, today its the farmers and rightly so, give them a fair crack of the whip. But please dont forget the street traders either they deserve better as well.

Street traders usually don't need to deal with monopolies when buying and selling their goods. They have a choice of what they sell, where they sell it, and the price they sell it for.

They don't have much choice about the various leeches they have to pay off for the privilege, however.

[tragickingdom]

The article is obviously written by a moron. BEing the biggest rice exporter and making money out of it by a farmer are different things In Africa you'll find the biggest Cacao producers in the world the big chocolate makers are the ones making the money not the farmers. With coffee precisely it is the same, the Satarbucks' and Sara Lee's are making the money not by the farmer doing the real work. You cannot explain such a thing to a city chap who sees Ferrari's in a Bangkok shopping mall and to a Nation editor who thinks that milk is produced in factory.

[Payboy]

Why is the Thai farmer still poor despite the fact that Thailand has been the world's leading rice exporter all along?

Because Thailand is home to some of the world's richest middlemen?

[billd766]

The article is obviously written by a moron. BEing the biggest rice exporter and making money out of it by a farmer are different things In Africa you'll find the biggest Cacao producers in the world the big chocolate makers are the ones making the money not the farmers. With coffee precisely it is the same, the Satarbucks' and Sara Lee's are making the money not by the farmer doing the real work. You cannot explain such a thing to a city chap who sees Ferrari's in a Bangkok shopping mall and to a Nation editor who thinks that milk is produced in factory.

Do you live in the countryside?

I live in a farming area in Khampaeng Phet and there are a lot of the first stage middle men around.

The main crops around here are man saparang (tapioca), sugar cane and some rice.

Wherever the farmer goes to sell his crop the price variation is no more than a couple of hundred baht per ton and if you can get more 5 km away then good for you as the cost of transport to there is your problem.

Oh we will also knock off 5% from the gate price as the crop has a high water content.

We will guarantee you a good price for next years crop "provided" that you buy your fertilizer and seeds from me and we will lend you the money too.

Of course the price of fertilizer is high because of the high oil prices and next year it will be higher because of the 300 baht a day we have to pay our workers.

If you take our offer and the price is higher next year we will pay you this years agreed price that we both agreed to in writing.

Of course you don't have to sell to me but I don't think many other people will buy it from you elsewhere.

What is needed in Thailand is a proper co-operative owned and run by farmers for the benefit of farmers and that won't happen in my lifetime as there is too much money involved.

[hammered]

Politicans pay attention to this as the farmers deliver elections. The farmers seem to prety much majority support only one party now so lets hope that doesnt lose them leverage. Its also an alliance of certain polticians and farmers with a common objective of geting one over on the traditonal pwoer brokers

[whybother]

Politicans pay attention to this as the farmers deliver elections. The farmers seem to prety much majority support only one party now so lets hope that doesnt lose them leverage. Its also an alliance of certain polticians and farmers with a common objective of geting one over on the traditonal pwoer brokers

Has anything been any different for the last 10 years?

[DP25]

Farmers remain poor because it is in the best interest of the local feudal elites that have controlled the NE politically and economically for decades to keep them poor and easily controlled so they can continue to siphon off the majority of the agricultural wealth as middlemen

People also dramatically overestimate the value of rice. Being the world's largest rice exporter isn't actually worth that much. Total rice exports last year were about $6 billion. Total exports for the first 11 months of this year were $215 billion, and that is even with the big hit due to the flood as well. Rice unfortunately isn't worth very much. Hard drives, electronics, and cars are worth a lot.

[ballpoint]

Politicans pay attention to this as the farmers deliver elections. The farmers seem to prety much majority support only one party now so lets hope that doesnt lose them leverage. Its also an alliance of certain polticians and farmers with a common objective of geting one over on the traditonal pwoer brokers

So you're trying to say that there are no farmers in the entire South? Any argument that ignores the overwhelming lack of support for the TRT / PPP / PTP / whatever they call themselves next, down there is too simplistic. And, if you did some checking, the traditional power brokers in the Northeast are still in power. Always have been, no matter who controls the government. Even if you look at the one rural party shunned by the PTP - the BJP, it still firmly has its hands on the reins in its stronghold of Buri Ram.

[BigJohnnyBKK]

I think its not just the farmers who remain relatively poor, its the same for the street traders as well where you get you snacks, fruit or whatever, they are all just trying to make a living, its a struggle here for the majority, a minority seem to be able to do very nicely though no matter what, today its the farmers and rightly so, give them a fair crack of the whip. But please dont forget the street traders either they deserve better as well.

“The comfort of the rich depends upon an abundant supply of the poor.” ― Voltaire

Just as true in the US. But there we only let the poor sell illegal drugs in the streets to support themselves, not snacks or clothes - IOW nothing that competes with the rent-paying shops.

[OzMick]

If the average Thai rice farmer sold his crop from the farm gate, at world market prices and with none of the costs of production, he would still be poor because he simply doesn't produce enough of this low value crop. His farm is many times too small and his production methods labour intensive.

Of course, he supports the Thaksin party because they promise economically unviable rice subsidies which deplete the Treasury, and the changes that need to be made are left undone due to lack of funds. If his children could get a better education they would realise that small scale rice-farming is a life-time ticket to poverty.

Why, in a country with a labour shortage, are so many people employed in an unproductive industry? If the rice subsidies were cut (and the money used to improve education), and the number of immigrant workers reduced, wages would increase and a better quality workforce result.

Are PTP interested in breaking this vicious cycle? Sure, that's why they cancelled the Dem installed education subsidies and teacher improvement programs. They have a voting bloc of uneducated and poor rice-farmers, why should they change things.

[wxyz]

where communism goes, famine follows.

[wxyz]

over breeding is one component of poverty.

“[Mother Teresa] was not a friend of the poor. She was a friend of poverty. She said that suffering was a gift from God. She spent her life opposing the only known cure for poverty, which is the empowerment of women and the emancipation of them from a livestock version of compulsory reproduction.”

Christopher Hitchens

[Thai at Heart]

Someone mentioned co-operatives. That in the eyes of the agriculture ministry is almost akin to socialised farming. I mean who knows what would happen if the farmers really ganged up together and used their masses to dictate prices back to the market, it could lead to revolution, civil unrest and a demand from the farmers to be listened to through the political system.

Ah woops. So is it the case that the continued mismanagment of the markets for export produce through the hands of largely Chinese traders has led to the current political situation? So what is the answer?

I would suggest breaking the Thai/Chinese strangle hold on the agricultural business. But "Oh No", that isn't allowed by the FBA, so to do that would need a change in the law, and of course, having extracted billions in wealth from this market, these poor companies still aren't ready to compete in the world market. I mean how could adding competition to the market be in the interest of the country if it meant higher farm prices and less profit spread around in Bangkok to buy Mercs and Bentleys.

We foreigners just don't get the concept that national interest extends as far as feathering the bank accounts of the middle men and exporters, and no one from the outside will be allowed unfettered access to this apparent gold mine if it means reduced profits for a very select part of the "Thai" (debatable at best) business. And they wonder why Chavez gets elected in South America and farmers in Thailand are finally taking their votes and putting it where they think they get some representation.

We are in the middle of this whole con unravelling, and so far it hasn't been particularly pretty has it.