Rice Policy Drives Land Claw-Back: Special Survey

[webfact]

SPECIAL SURVEY

Rice policy drives land claw-back: Special Survey

PETCHANET PRATRUANGKRAI,

ACHARA PONGVUTITHAM

THE NATION

BANGKOK: -- The Thai rice industry is not just being hit by the government's price-pledging policy, but also allegedly by foreign investors believed to be buying up land from farmers via nominees. An investigation by The Nation, however, has found little support for such charges in the prime rice-growing Central region.

Still, farmers, millers and exporters all say the government is losing control of the agricultural sector because farmers are being lured into selling their land to rich people, who are now growing rice to enjoy higher returns.

For the first time in half a century, Thailand was ousted from its rank as the world's top rice exporter by India, which sold 3.61 million tonnes compared with the Kingdom's 3.6 million tonnes in the first half of this year. This 45-per-cent slump is being blamed on the fact that the price of Thai rice is no longer competitive.

The Commerce Ministry recently came out in defence of its policy, saying the shortfall was only short-term and the government was targeting rice exports of 9 million to 9.5 million tonnes this year.

(click for large image)

However, exporters are not that optimistic, saying they would be lucky to sell 7 million tonnes this year.

A survey conducted in the Central region by The Nation showed that most of the farmland was owned by Thai landlords who leased plots of up to 10 rai (1.6 hectares) to small-scale farmers. Yet over the past few years, those in the rice business have been claiming that foreigners, particularly investors from the Middle East, have been buying up farmland via nominees.

Reportedly, more foreigners have been coming in since the government launched its price-pledging policy, in which the subsidy offered is much higher than the market price. Some have even been alleging that investors from Singapore have bought up land to serve the island state's consumption. However, The Nation was not able to find any concrete information backing this allegation.

Still, farmers, millers and exporters all say the government is losing control of the farming sector because farmers are being lured into selling their land to rich people, who are now growing rice to enjoy higher returns.

As per The Nation survey, Thailand has 60 million rai devoted to rice farming and 60 per cent of this is owned by farmers, while the rest is handled by landlords and businesspeople, and some foreigners.

A similar survey conducted by the University of the Thai Chamber of Commerce showed that 70.6 per cent of Thai farmers grew crops on their own land, with each farm averaging 22.4 rai. It also found that farmers were renting additional land to earn extra from the government's pledging policy. According to the UTCC survey, 7 per cent of the farmers did not own land but rented about 30.9 rai each to grow rice.

Vichai Poonpiriyasup, senior vice president of the CP Group's Charoen Pokphand Seeds, said that on average the group sold enough seeds to cover up to 300,000 rai, adding that about 30-40 per cent of the farmers who bought the seeds worked on rented land.

"It is normal for Thai farmers to rent land to produce a larger harvest, because the yield from their small farms would not cover their costs for the rest of the year," Vichai said. "Some farmers even rent their land to those who have a more efficient farming method."

He added that he had seen no signs of foreign investors. However, he acknowledged that some landlords had taken back their land and were growing rice themselves to take advantage of the high subsidy. If the government wanted foreigners to invest in the sector, it should set up farming zones and restrict them to large-scale farming.

Vichai said they should also |be encouraged to focus on agricultural-industrial crops instead of rice alone. He said this would help the Thai rice industry become sustainable and strengthen the country's competitiveness in the long run.

Meanwhile, Department of Special Investigation chief Tarit Pengdith said his department had not found any instances of foreigners owning farms or growing rice via nominees. Farming is forbidden to foreigners under the Foreign Business Act.

He added that the DSI had investigated farmland ownership in Angthong, Ayutthaya and Suphan Buri and would take its investigation to the Central region and the North, where many foreigners are rumoured to be landowners.

During the previous Democrat-led government, the DSI reported that up to 10,000 rai of farmland was primarily owned by foreigners with Thai spouses.

Separately, the Business Development Department reported that the number of new rice mills had risen from 23 last year to 30 in the first five months of this year. However, the value of new businesses registered in the rice sector had dropped from Bt1.2 billion during the same period last year to Bt592.7 million. The Internal Trade Department reported that the number of rice exporting companies had increased from 374 in April this year to 378 firms in May, while the number of rice mills rose from 1,540 in April to 1,542 in May.

-- The Nation 2012-08-07

[Thai at Heart]

So they investigated, and reportedly, apparently, possibly discovered a rumour.

I swear that the nation is getting worse.

[OzMick]

Are there many countries where you can lose some of your citizenship rights because you marry a foreigner?

[Thaddeus]

It's those pesky foreigners again.

[Ricci]

aaahhh .... the 40% that owns 115 million square km? (or was it rai?)

whatever .... i love this kind of investigative thai journalism .... ouch, oxyMORON .... again

>.<

[... where many foreigners are rumoured to be landowners ...]

check the chanods ... no foreigners name on them ... for sure

Edited August 7, 2012 by Ricci

[otherstuff1957]

The average farmer owns 22 rai? The income from 22 rai of rice paddies is just enough to keep them poor and deeply in debt. Quiet frankly, you need about 100 rai of land to get a decent income from your farm.

No wonder Thai farmers are always complaining about being poor & in debt!

[Katipo]

40% is owned by foreigners and non-farmers. So this could mean 39% has been bought up by rich Thais (Chinese?) with 1% bought by foreigners? Nothing like the fresh smell of scape-goat in the morning. At least they go one to elaborate a ever so slightly more deeper in to the article I suppose (after everyone has already seen the pretty graphs and pictures and made up their minds).

[Ricardo]

Perhaps a former-PM might assist the investigation, into foreign land-ownership, by recalling the good-old-days when he was said to be helping them acquire land so-as-to secure their longer-term food-supplies ? Or perhaps not.

[hanuman2543]

All the small-scale farmers will have to give up over the next 1-2 decades, this is a process nobody can stop. It was the same in the west. They should be happy that foreigners want to paricipate, because only this will bring the capital and know how to stay competitive. Instead they cry about it and try to keep competition out and proceed with their outdated technology. It is a perfect example for Thai protectionism and in the end they will pay a hefty bill for it. The whole small-scale farming is only a cover for widespread unemployment and a clever way to distribute taxpayers money to a few chosen ones. In the 22nd century only efficiency counts and Thailand has to learn that they are in copmetition with the rest of the world. Having no unfair competitive advantages over others is a concept new for Thais but they should adapt very quickly or pay the bill.

[harrry]

Heritage laws have meant that land has been more and more subdivided. My father in law left 24rai od riwe land on his death. My wifes family's 24 rai of rice land should have been divided between 5. At the moment the family has left the proceeds of farming to support my wifes's mother and the two children of a deceased brother. On my MIL's death my wife will recieve the 4.5 rai herself. Totally not viable for individual farming. The 24 rai is rented on a share farming agreement as an 80 year old mother would not be able to work the fields. Hopefully the family can continue the same arangement and share the proceeds.

I think this is happening in many cases, The share farmer actually controls 100 rai.

If all the children of my wife's generation had not been sent to university the original land holdings would have been about 150 rai. It was used as an investment in My wife's brothers and her future but this has made the land holding unviable.

Edited August 7, 2012 by harrry

[Jaivin2011]

So far claims that foreigners getting involved in the rice plantation business have proven to be not true and unfounded as just the usual way for the thai officials to throw smoke. The real "foreigners" here monopolising the rice business and exploiting thereal thai farmers are the Thai Chinese CP Group. and other thai chines millers and brokers. Of course they get away as they have the Democrats supporting them and note that one of the Abhisits father is a director of the company. The Pheu Thai will also not investigate them as they have been paid off by these "Chinese Foreigners" If the Red Shirts relly want to do something, stop supporting all the corrupted politicians including the Hakka Chinese Thaksin and the Democrats who only support the Thai Chinese Community and instead the Red Shirts should start a revolution to claim back their lands and businesses from the Thai Chinese

[WhizBang]

I swear that the nation is getting worse.

Are you refering to the nation of Thailand, or to that useless rag of a newpaper? Hard to tell.

Still, farmers, millers and exporters all say the government is losing control of the farming sector because farmers are being lured into selling their land to rich people, who are now growing rice to enjoy higher returns.

'Being lured into sell their land to rich people'? Hmmm, don't think so. They are lured into debt. To get loans they have to sign over their land as collateral. When they cannot pay off their debt, the loan is forclosed on and they loose their land. Yes, most likely to rich people. But that was the whole intention of giving them the loan in the first place.

Absolutely Amazing Miracle Thailand. Not!

Edited August 7, 2012 by WhizBang

[Thai at Heart]

I swear that the nation is getting worse.

Are you refering to the nation of Thailand, or to that useless rag of a newpaper? Hard to tell.

Still, farmers, millers and exporters all say the government is losing control of the farming sector because farmers are being lured into selling their land to rich people, who are now growing rice to enjoy higher returns.

'Being lured into sell their land to rich people'? Hmmm, don't think so. They are lured into debt. To get loans they have to sign over their land as collateral. When they cannot pay off their debt, the loan is forclosed on and they loose their land. Yes, most likely to rich people. But that was the whole intention of giving them the loan in the first place.

Absolutely Amazing Miracle Thailand. Not!

I meant the newspaper.

The level of coherent discussion and fact gathering is getting worse and worse. Rumour, gossip and third hand Tittle tattle is being trumpeted as fact.

The very first paragraph mentions foreigners, then it is middle eastern investors, then it is Singaporeans, and finally right at the bottom of the article,

He added that he had seen no signs of foreign investors

andMeanwhile, Department of Special Investigation chief Tarit Pengdith said his department had not found any instances of foreigners owning farms or growing rice via nominees

So which is it?

Edited August 7, 2012 by Thai at Heart

[spirit47]

20-30 Rai, then with the Kubota 3-4 times, at least, spraying poison 5 times, I would be poor too...

The goal is, to push small farmers away, and growing on fields with 2000 Rai and more...

If they learn, to work together, some can survive with organic rice and special rice, but not with poor quality.

But like children believe in Santa Claus, they will sell their vote next time again, and then wonder, when the bill coming. Boring...

[belg]

i really hope those rich people or not the very bad white farang they keep talking about ... real expats do not have any rights, not even to own 1 rai to build their own house on... so who are those rich investors from foreign countries?

everybody knows only millers and middle persons get rich by exploiting the poor farmers... time for a new villa, benz, mia noi

[riceyummm]

All the small-scale farmers will have to give up over the next 1-2 decades, this is a process nobody can stop. It was the same in the west. They should be happy that foreigners want to paricipate, because only this will bring the capital and know how to stay competitive. Instead they cry about it and try to keep competition out and proceed with their outdated technology. It is a perfect example for Thai protectionism and in the end they will pay a hefty bill for it. The whole small-scale farming is only a cover for widespread unemployment and a clever way to distribute taxpayers money to a few chosen ones. In the 22nd century only efficiency counts and Thailand has to learn that they are in copmetition with the rest of the world. Having no unfair competitive advantages over others is a concept new for Thais but they should adapt very quickly or pay the bill.

A well thought out post, but what struck me was the inadvertent but beautiful typo.........copmetition. Now there's a new word crying out for a definition. The Washington Post has a copmetition....oops, competition every year where copmeditors........oops, competitors take a common word, change it a little to make a new word.

Example: intaxication........the giddy feeling you get when you receive your tax refund. The feeling quickly disappears when you realize it was your money in the first place.

Another: bozone.........the substance surrounding stupid people which blocks out intelligent ideas.

My offering: copmetition.........when two policemen argue over who gets to write the citation.

Another: copmetition........when two moderators argue over who gets to remove this post because it is WAY off topic.