Flawed Policies Put Thai Farmers At A Disadvantage: Editorial

[webfact]

EDITORIAL

Flawed policies put Thai farmers at a disadvantage

The Nation

BANGKOK: -- Ongoing subsidy schemes weaken the agricultural sector and open the door for our competitors to take over with better productivity and sustainability

The Asean Economic Community (AEC) will provide both opportunities and threats to Thai businesses. But the prospects are not bright for the agricultural sector.

Thai rice will face direct and severe competition from neighbouring countries once Thailand is fully integrated into the AEC in 2015. This situation will be harder to deal with in the medium to long term if the government maintains flawed policies that are wrecking the competitiveness of Thai rice.

Many economists and traders in Thailand have voiced concerns about the negative impact that the rice subsidy programme will have on exports. The policy of shoring up the rice price may lift the domestic price of rice instantly - to the short-term benefit of farmers - but to what end if the farmers don't enjoy a sustainable and better standard of living and increased productivity?

Spending on the rice price-guarantee programme is not insignificant - around Bt100 billion yearly. Middlemen and rice dealers benefit most from this expensive scheme, while the majority of Thai farmers remain poor. At the same time, some agro-businesses have relocated to neighbouring countries where costs are cheaper.

Populist policies that appeal to farmers may be important for the government, but without long-term goals they will eventually weaken Thai farmers to the point that they can no longer compete with their counterparts in other Asean countries - and thus no longer make a living.

The competitiveness of Thai rice has been eroded largely because of these government policies. The Board of Trade has revealed that some agro-industrial producers have already moved to neighbouring countries to capitalise on the cheaper commodity prices and labour costs there. For instance, Thai corn is currently sold at around Bt10.50 per kilogram, compared to Bt6 or Bt7 in neighbouring countries.

This trend will almost certainly continue after the AEC comes into existence, because these industries will obviously prefer to operate in places where they can source raw materials at the best prices. In addition, due to the AEC requirements for freer flow of goods, the Thai government may end up subsidising some farm produce that is smuggled into the country from neighbours such as Laos, Cambodia and Myanmar.

Thailand might still like to brag about being the world's leading rice exporter, but soon that boast will no longer be possible. Last year Vietnam exported 7.1 million tonnes - one-fifth of the total international trading volume. Thailand is failing to take notice and improve its productivity and competitiveness. Our farmers will eventually lose out, as will the Thai public.

Vietnam's success is down to the application of more appropriate methods. The authorities help farmers by, for instance, laying down proper infrastructure, such as irrigation. Around 90 per cent of that country's agricultural land is fully and effectively irrigated, compared to 22 per cent in Thailand. Vietnam also enjoys high productivity partly due to the good quality of the soil. Vigorous efforts in research and development contribute to Vietnam's higher productivity and yields. Vietnam's current rice yield per rai of 884 kilograms compares to only 666 kilograms in Thailand.

Thailand is now competitive only in terms of niche markets. For instance, the yield per rai of fragrant rice in Thailand is 337 kilograms. But Vietnam does not produce this strain of rice.

To ensure the successful continuity of our agricultural sector, Thai farmers need to understand that farming is a business. They can only stay competitive via effective land management. They must not rely totally on government support through endless rice subsidy programmes or rice pledging programmes that do not help them strengthen their competitiveness and potential in the long term.

The government must adjust these policies if it really wants to improve farmers' productivity. This will also promote food security. If this does not happen, no amount of money will be sufficient to save our farmers and our position as a leading producer of rice and other agricultural products.

-- The Nation 2012-07-11

[JurgenG]

It's interesting to put this article in parallel to an other one published the same day in the Nation "Time for the landless to get a chance" http://www.nationmultimedia.com/national/Time-for-the-landless-to-get-a-chance-30185898.html

Here they say " To ensure the successful continuity of our agricultural sector, Thai farmers need to understand that farming is a business. They can only stay competitive via effective land management. They must not rely totally on government support .."

In the other article they promote removing the farm lands from the private sector to establish kolkhoz http://en.wikipedia.org/wiki/Kolkhoz

"We will soon inspect the plots where the concessions have already expired to prepare for the establishment of community forest," Suwit said. He believed there was no need to uproot palm or rubber trees now growing on the plots. He pointed out that locals could be allowed to harvest them in exchange for an agreement to rehabilitate the forestland.

Nothing is going to change, it still will be commercial farming, but instead of private operators, it's going to be "community farming". Ruled by civil servants from the forest department. Basically back to the USSR in the 30's.

[Yunla]

Nothing is going to change, it still will be commercial farming, but instead of private operators, it's going to be "community farming". Ruled by civil servants from the forest department. Basically back to the USSR in the 30's.

PTP rice-mortgage is the classic red story, corrupt officials get rich and farmers lose out. The poor get poorer and keep begging the Party to help them. They keep wearing the dictator's face on their Tshirts and portrait of him on the wall, and mobilising on the streets to support the Party that never supports them back in return. Its all about faith in the future.

And segregated "red villages". Card-carrying Party-members only. Segregation keeps everyone politically divided, and believing that the 'enemy' are other working-class Thais who are not pro-Party, as opposed to realising that all working-class people share a single enemy ; the billionaire Leader and his billionaire Committee Men.

Edited July 11, 2012 by Yunla

[Thai at Heart]

They can't even convince farmers not to incinerate and smoke out half the country

[JurgenG]

They can't even convince farmers not to incinerate and smoke out half the country

One of the problem is the land titles the farmers held have no value. Same with what the forest department plan to do with the landless farmers (from the articles cited above ) : "Satitpong said his office was preparing to help landless people by issuing them , community land-title deeds. " This titles have absolutely no value, farmers can't go to the bank to get a loan to buy modern farming equipements. That's why they have no alternative than burning their fields to prepare them for the next crop.

[fareastguy]

Millions of Thai Baht is wasted every year, the money supposedly being pumped into the Thai agricultural sector by a government which is unfortunately run by corrupt officials & local land owners.

Yet again another shining example of corruption, money mis-appropriated & pocketed on the way to the farmers who are crying out to be funded to be dragged into the modern world.

How many hands does the money pass through to get to the farmer, only to find the amount he ends up with wouldn't feed his OX..

Better to hold the money in a farmers co-operative type bank, where the farmer can directly apply for funds according to his needs with a business plan of what he is growing/selling & how he intends to repay the loan.

The co-operative can also fund investment in how to become more productive with information now readily availableworldwide regarding rice types, climates changes, soil types & natural fertilizers.

Keep the money out of the pockets of the middlemen & make sure it is wisely invested by those who would only deliver directly to the farmers who need the machinery & technology to become equal in the 21st century with neighbouring Asean competitors.

A farmer toiling behind his Ox & wooden plough preparing the paddy may look good on a picture postcard, sowing rice by hand should be a thing of the past only seen in those quaint tourist attraction videos of "traditional Thailand" & as for rows of workers harvesting the crops by hand will only see Thai agriculture become a thing of the past & it's export market destined to become zero.

How can an Ox compete with a modern tractor, it's time again for Thailand to wake up to the "Big" picture & not just the few to line their pockets with a quick buck now but invest in the future.. but isn't that Thailands trouble, the mentality of those that have their hands on the money but not their hands in the soil !!

[jaltsc]

They can't even convince farmers not to incinerate and smoke out half the country

One of the problem is the land titles the farmers held have no value. Same with what the forest department plan to do with the landless farmers (from the articles cited above ) : "Satitpong said his office was preparing to help landless people by issuing them , community land-title deeds. " This titles have absolutely no value, farmers can't go to the bank to get a loan to buy modern farming equipements. That's why they have no alternative than burning their fields to prepare them for the next crop.

Then why have western European peasant farmers been composting for centuries without the use of modern equipment?...And...in an environment that doesn't approach the favorable conditions for composting which exists in southeast Asia. The answer is probably that their culture allows them to think in advance about what the advantages will be reaped in the near future. Thai farmers seem to want everything now, and to have more than their neighbor in order to gain face, instead of forming cooperatives and pooling their resources for the benefit of all. If they are given a subsidy to grow less garlic in order to increase the price, everyone of them uses that money to buy more garlic to plant and then scratch their heads, wondering why the prices have dropped when they were promised that the prices would rise. The ignorance and selfishness is not restricted to the middlemen. It is part of the culture from top to bottom. Given the chance, these farmers would cheat their neighbors in order to make more money.

The farmers have alternatives. They are just too ignorant and selfish to recognize and utilize them. They are not being denied by the banks. They are being denied by their own primitive culture which cannot survive in the modern world.

Edited July 11, 2012 by jaltsc

[h90]

It's interesting to put this article in parallel to an other one published the same day in the Nation "Time for the landless to get a chance" http://www.nationmul...e-30185898.html

Here they say " To ensure the successful continuity of our agricultural sector, Thai farmers need to understand that farming is a business. They can only stay competitive via effective land management. They must not rely totally on government support .."

In the other article they promote removing the farm lands from the private sector to establish kolkhoz http://en.wikipedia.org/wiki/Kolkhoz

"We will soon inspect the plots where the concessions have already expired to prepare for the establishment of community forest," Suwit said. He believed there was no need to uproot palm or rubber trees now growing on the plots. He pointed out that locals could be allowed to harvest them in exchange for an agreement to rehabilitate the forestland.

Nothing is going to change, it still will be commercial farming, but instead of private operators, it's going to be "community farming". Ruled by civil servants from the forest department. Basically back to the USSR in the 30's.

"Basically back to the USSR in the 30's." --> back to school

Structures of farming in USSR is an interesting read, but has nothing to do with what is happening in Thailand.

[JurgenG]

They can't even convince farmers not to incinerate and smoke out half the country

One of the problem is the land titles the farmers held have no value. Same with what the forest department plan to do with the landless farmers (from the articles cited above ) : "Satitpong said his office was preparing to help landless people by issuing them , community land-title deeds. " This titles have absolutely no value, farmers can't go to the bank to get a loan to buy modern farming equipements. That's why they have no alternative than burning their fields to prepare them for the next crop.

Then why have western European peasant farmers been composting for centuries without the use of modern equipment?...And...in an environment that doesn't approach the favorable conditions for composting which exists in southeast Asia. The answer is probably that their culture allows them to think in advance about what the advantages will be reaped in the near future. Thai farmers seem to want everything now, and to have more than their neighbor in order to gain face, instead of forming cooperatives and pooling their resources for the benefit of all. If they are given a subsidy to grow less garlic in order to increase the price, everyone of them uses that money to buy more garlic to plant and then scratch their heads, wondering why the prices have dropped when they were promised that the prices would rise. The ignorance and selfishness is not restricted to the middlemen. It is part of the culture from top to bottom. Given the chance, these farmers would cheat their neighbors in order to make more money.

The farmers have alternatives. They are just too ignorant and selfish to recognize and utilize them. They are not being denied by the banks. They are being denied by their own primitive culture which cannot survive in the modern world.

What are you talking about ? Agriculture has ben mechanized in the west for more than 200 years.

You have very strong words for Thai farmers but very little knowledge about farming.

Mods/Admins, would you mind in the future post news regarding farming and land use in the farming forum ? At least we will have people who know and understand farming and may have the chance of more constructive conversation.

[Thai at Heart]

Millions of Thai Baht is wasted every year, the money supposedly being pumped into the Thai agricultural sector by a government which is unfortunately run by corrupt officials & local land owners.

Yet again another shining example of corruption, money mis-appropriated & pocketed on the way to the farmers who are crying out to be funded to be dragged into the modern world.

How many hands does the money pass through to get to the farmer, only to find the amount he ends up with wouldn't feed his OX..

Better to hold the money in a farmers co-operative type bank, where the farmer can directly apply for funds according to his needs with a business plan of what he is growing/selling & how he intends to repay the loan.

The co-operative can also fund investment in how to become more productive with information now readily availableworldwide regarding rice types, climates changes, soil types & natural fertilizers.

Keep the money out of the pockets of the middlemen & make sure it is wisely invested by those who would only deliver directly to the farmers who need the machinery & technology to become equal in the 21st century with neighbouring Asean competitors.

A farmer toiling behind his Ox & wooden plough preparing the paddy may look good on a picture postcard, sowing rice by hand should be a thing of the past only seen in those quaint tourist attraction videos of "traditional Thailand" & as for rows of workers harvesting the crops by hand will only see Thai agriculture become a thing of the past & it's export market destined to become zero.

How can an Ox compete with a modern tractor, it's time again for Thailand to wake up to the "Big" picture & not just the few to line their pockets with a quick buck now but invest in the future.. but isn't that Thailands trouble, the mentality of those that have their hands on the money but not their hands in the soil !!

The reason that the agriculture system is the way that it is goes back many years, but for example, during the 60's and 70's everyone had an enormous distrust of the word communal farming fearing that it would lead to some massive outbreak of socialism.

Result, encourage the farmers to independent self sustainability with tiny plots, no community purchase of inputs, suits the buyers massively

Allow middle men to squeeze the farmers at sale time when cash is tight, instead of providing bridging loans or contracted farming.

Result, suits the buyers massively

Don't issue land titles to farmers meaning that financing for crops and investment meaning that farmers continue to be relatively product rich and cash poor

Result, suits the buyers massively

Allow loan sharks to proliferate, forcing farmers to use land titles as collateral, eventually leading to seizure of land titles when monies cannot be repaid

Result creates untitled farmers who will never get out of the trap they are in. suits the buyers massively

I have worked in this industry and because of the nature of our business, which wasn't one of the massive commodities, we were compelled to give all the inputs away at cost, finance the whole lot, and we still made a good profit. We were the only buyers of that given product, and fortunately had a pretty responsible partner who supported it. The farmers on a per rai basis made more from that crop they produced than any other. We had to prove this every year to our customers and the excise dept. Jigging the numbers was largely pointless since lieing would only have hurt us.

The system has for so long been jigged in the favour of the large industrial buyers who have had absolutely NO pressure put on them to insure the sustainability of their supply, or make sure that the farmers make an ok living and a little bit more, resulting in gargantuan profit in agri-exports, and little improvement in the lot of the farmer. I am not crying out for communism, just that there should have been a hell of a lot more investment cost forced on most of the agribusinesses to insure that the farmers do it better, get higher yields and higher quality year on year, and also have to provide some kind of disaster insurance.

The rice or sugar buyers have behaved like oligopolies in this country for ever, but everyone has been trumpeting that there is a "market" around. It is better than it used to be, but when the cost of transportation from one rice mill to another is so large, and you are probably taking a choice between selling to one or either brother, what odds you really get a better price. As if the Thai Rice Producers or Thai Rubber Producers don't set the market price. Just look at what happens in the rest of the world when buyers are proven to collaborate on the prices that they buy commodities.

The only way out of this is if the villages are allowed to purchase inputs in bulk, and pool the profits to some extent to give them some pricing power in the market. At the moment they get picked off, one by one by the middle men and buyers.

Edited July 11, 2012 by Thai at Heart

[jaltsc]

They can't even convince farmers not to incinerate and smoke out half the country

One of the problem is the land titles the farmers held have no value. Same with what the forest department plan to do with the landless farmers (from the articles cited above ) : "Satitpong said his office was preparing to help landless people by issuing them , community land-title deeds. " This titles have absolutely no value, farmers can't go to the bank to get a loan to buy modern farming equipements. That's why they have no alternative than burning their fields to prepare them for the next crop.

Then why have western European peasant farmers been composting for centuries without the use of modern equipment?...And...in an environment that doesn't approach the favorable conditions for composting which exists in southeast Asia. The answer is probably that their culture allows them to think in advance about what the advantages will be reaped in the near future. Thai farmers seem to want everything now, and to have more than their neighbor in order to gain face, instead of forming cooperatives and pooling their resources for the benefit of all. If they are given a subsidy to grow less garlic in order to increase the price, everyone of them uses that money to buy more garlic to plant and then scratch their heads, wondering why the prices have dropped when they were promised that the prices would rise. The ignorance and selfishness is not restricted to the middlemen. It is part of the culture from top to bottom. Given the chance, these farmers would cheat their neighbors in order to make more money.

The farmers have alternatives. They are just too ignorant and selfish to recognize and utilize them. They are not being denied by the banks. They are being denied by their own primitive culture which cannot survive in the modern world.

What are you talking about ? Agriculture has ben mechanized in the west for more than 200 years.

You have very strong words for Thai farmers but very little knowledge about farming.

Mods/Admins, would you mind in the future post news regarding farming and land use in the farming forum ? At least we will have people who know and understand farming and may have the chance of more constructive conversation.

Sorry buddy, but I'll forget more about farming in the next hour than you will ever learn in your lifetime. It sounds like you want to mechanize and promote the use of chemicals to destroy the land. Typical lacky of Monsanto and Cargill.

[brianP]

With Parents from the midwest,USA. I know how govt. subsidies and cooperatives work. They squeeze out the little mom and pops and pay wealthy landowners to not grow crops and the resulting industrialization of commercial farming, of biological genetics and chemical compounds to increase the sterile production. Watch the cancer rates grow with industrial farming. And the poor bear the burden as usual.

[MESmith]

Watch the cancer rates grow with industrial farming.

I'm more worried about the current mis-use / overuse of pesticides & herbicides by the current peasant farmers

[SouthernMan3]

Millions of Thai Baht is wasted every year, the money supposedly being pumped into the Thai agricultural sector by a government which is unfortunately run by corrupt officials & local land owners.

Yet again another shining example of corruption, money mis-appropriated & pocketed on the way to the farmers who are crying out to be funded to be dragged into the modern world.

How many hands does the money pass through to get to the farmer, only to find the amount he ends up with wouldn't feed his OX..

Better to hold the money in a farmers co-operative type bank, where the farmer can directly apply for funds according to his needs with a business plan of what he is growing/selling & how he intends to repay the loan.

The co-operative can also fund investment in how to become more productive with information now readily availableworldwide regarding rice types, climates changes, soil types & natural fertilizers.

Keep the money out of the pockets of the middlemen & make sure it is wisely invested by those who would only deliver directly to the farmers who need the machinery & technology to become equal in the 21st century with neighbouring Asean competitors.

A farmer toiling behind his Ox & wooden plough preparing the paddy may look good on a picture postcard, sowing rice by hand should be a thing of the past only seen in those quaint tourist attraction videos of "traditional Thailand" & as for rows of workers harvesting the crops by hand will only see Thai agriculture become a thing of the past & it's export market destined to become zero.

How can an Ox compete with a modern tractor, it's time again for Thailand to wake up to the "Big" picture & not just the few to line their pockets with a quick buck now but invest in the future.. but isn't that Thailands trouble, the mentality of those that have their hands on the money but not their hands in the soil !!

Very, very, very well said !

Thank you

[SouthernMan3]

They can't even convince farmers not to incinerate and smoke out half the country

One of the problem is the land titles the farmers held have no value. Same with what the forest department plan to do with the landless farmers (from the articles cited above ) : "Satitpong said his office was preparing to help landless people by issuing them , community land-title deeds. " This titles have absolutely no value, farmers can't go to the bank to get a loan to buy modern farming equipements. That's why they have no alternative than burning their fields to prepare them for the next crop.

Then why have western European peasant farmers been composting for centuries without the use of modern equipment?...And...in an environment that doesn't approach the favorable conditions for composting which exists in southeast Asia. The answer is probably that their culture allows them to think in advance about what the advantages will be reaped in the near future. Thai farmers seem to want everything now, and to have more than their neighbor in order to gain face, instead of forming cooperatives and pooling their resources for the benefit of all. If they are given a subsidy to grow less garlic in order to increase the price, everyone of them uses that money to buy more garlic to plant and then scratch their heads, wondering why the prices have dropped when they were promised that the prices would rise. The ignorance and selfishness is not restricted to the middlemen. It is part of the culture from top to bottom. Given the chance, these farmers would cheat their neighbors in order to make more money.

The farmers have alternatives. They are just too ignorant and selfish to recognize and utilize them. They are not being denied by the banks. They are being denied by their own primitive culture which cannot survive in the modern world.

"Then why have western European peasant farmers been composting for centuries without the use of modern equipment?...And...in an environment that doesn't approach the favorable conditions for composting which exists in southeast Asia."

The easy answer : education.