Endless Handouts Lead To Weakness And Dependency: Thai Editorial

[OzMick]

My suggestion for a co-op - 20 farmers pool their adjacent plots, borrow to mechanise. 19 get a job while the other grows rice. He takes a similar salary to the others, pays the loan and splits the rest 20 ways. All are better off.

Small scale farming of a low value crop keeps you poor. Subsidising the crop only delays the realisation that it is a loser situation, while reducing spending on the nation's infrastructure - but, hey, it gets you elected.

We have a co-op (manager studied in Denmark), school for members (bio-farming, seed selection, irrigation technics, soil analysis), engines sharing, rice mill, savings bank, micro-credits).

All great ways of reducing production costs and increasing efficiency. But are your farmers making enough to live on without price subsidies? If not, something in the equation has to change.

[Thai at Heart]

at the level of government debt around in Thailand today, Thailand would have to implement absolutely enormous social programs for a very long time to get into the same position.

If the government is irresponsible with social spending and borrowed heavily from the central bank to fund the social programs, problems can grow exponentially (think about the compound interest formula) and spiral out of control (instead of gradually worsen in a linear manner as you appear to suggest), exacerbated by the great number of recipients. Thailand has 65M people compared with Greece's 11M, so Thailand has much more people to "feed", yet Thailand's GDP (PPP) per capita in 2011 was just 9,396 while Greece's was 26,294 (Source: List of countries by GDP (PPP) per capita).

Of course everything can grow exponentially, but comparing what was going on in Greece with an enormous public sector with retirements at 58, on 70% final salaries, train drivers on the subway taking home Euro 80k, a very fragmented private sector where everyone evading taxes hand over fist, it spun out of control very very easily because of the ability of Greece to borrow money at the same rate as Germany within the Euro. We hired a guy there on 22k Euro but the total social cost was about another 10k on top. They hadn't grasped the nettle for 25 years in Greece and eventually it came crashing down, but it was apparent 10 years ago that it was a broken system.

The public sector was so over blown there, it was evident that it was going to blow up. As I said, it doesn't mean that it is impossible for any country to recreate the same financial mess, but in reality, 1997 taught Asia a very valuable lesson, and things are on a decent footing in Thailand (at least for the medium term), and of course nothing stays the same, but with consistent 3 to 6% growth in Thailand, the government does have the ability to borrow when coming from a point of 40 to 45% debt. The shame of it is, will the borrowing be spent properly, and that is the issue, far more than worrying that Thailand will become Greece.

[lungmi]

My suggestion for a co-op - 20 farmers pool their adjacent plots, borrow to mechanise. 19 get a job while the other grows rice. He takes a similar salary to the others, pays the loan and splits the rest 20 ways. All are better off.

Small scale farming of a low value crop keeps you poor. Subsidising the crop only delays the realisation that it is a loser situation, while reducing spending on the nation's infrastructure - but, hey, it gets you elected.

We have a co-op (manager studied in Denmark), school for members (bio-farming, seed selection, irrigation technics, soil analysis), engines sharing, rice mill, savings bank, micro-credits).

All great ways of reducing production costs and increasing efficiency. But are your farmers making enough to live on without price subsidies? If not, something in the equation has to change.

I have to investigate. The marketing for rice of middle quality and high quality glutenious rice from some hilltribes is successfull. Indian corn and potatoes at a lower level too.. They want to establish at the coop a local market for "home made" vegetables, fruits, herbs, mushrooms.

A longtime project includes medical herbs for cosmetics and teas. (the forests are full) and a can-factory.

Edited May 3, 2012 by lungmi