Farmers' debts soared over past 15 years: Thai study

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Farmers' debts soared over past 15 years: study
The Nation

Debts causing loss of land ownership, serious problems : forum hears

BANGKOK: -- HIGHER FARMING costs, lack of land ownership and long-term indebtedness have all prompted farmers to work longer, to lose career identity for future generations, and to further reduce their land ownership, a civic group working on farmers' issues told a recent Bangkok seminar.

To solve these problems, farmers need to reduce costs through various measures. They include the use of organic fertilisers, the growing of wide varieties of farm produce and the setting up of a fund to acquire farmland for those lacking it. All this could be achieved through soft, long-term loans, the seminar was told.

On shouldering the costs, Local Action Links manager Phongthip Samranjit said 45-85 per cent of farmers in certain provinces were landless and rented farmlands at the per-rai cost of Bt1,500 to Bt2,500. The high price of seeds, fertilisers and insecticides made up 30-45 per cent of farming costs.

Citing an Office of Agricultural Economics report, Phongthip said 19.6 per cent of farmers across the country were landless. Of these, 36 to 40 per cent were based in the Central region, the main rice-producing source. Increased hardship in farmers' lives has turned their children away, prompting them to seek employment in the industrial sector, she added.

The OAE report in 2012 also found that agricultural households had a huge total debt of Bt456.3 billion, compared to the Bt204.1 they owed in 1999 - which she described as a drastic increase. A recent Local Action Links study found that a farmer's family in Ayutthaya owes an average debt of Bt401,679, and a family based in Phetchaburi owes Bt371,091.

On solutions to the problems, a Phetchaburi-based member of the Council of Networks of Farmers of Thailand, said turning to using organic fertilisers and non-toxic insecticides could help reduce farming cost.

He said government-supported guarantees of rice prices were important to farmers, especially when farming was not possible because of heavy flooding or extreme drought, when farmers earned the lowest guaranteed prices.

Setting up a government fund which enabled farmers to work through a long-term lease was also helpful. This farmland must not be transferable but could be inherited by children of eligible farmers.

A Suphan Buri farmer, Bunchoo Maneewong, 56, said she lost a 10-rai farm through a Bt600,000 loan she acquired from a bank in 1996. She sold the first five rai for Bt500,000 after she was unable to repay debt installments. Faced with a lawsuit in 2002, she found out

that nearly Bt400,000 was deducted as interest, which increased from 7.5 to 18 per cent because of non-payment.

Bunchoo said she later sold the remaining five rai, and has rented it for farming, while still shouldering higher costs and a more expensive rent rate.


-- The Nation 2014-06-23

[ClutchClark]

The redistribution of wealth. Wonder how many generations had owned the 10-rai farm.

"A Suphan Buri farmer, Bunchoo Maneewong, 56, said she lost a 10-rai farm through a Bt600,000 loan she acquired from a bank in 1996. She sold the first five rai for Bt500,000 after she was unable to repay debt installments. Faced with a lawsuit in 2002, she found out

that nearly Bt400,000 was deducted as interest, which increased from 7.5 to 18 per cent because of non-payment.

Bunchoo said she later sold the remaining five rai, and has rented it for farming, while still shouldering higher costs and a more expensive rent rate."

[djjamie]

Interesting that over the past 15 years the Shin lead governments have also pumped 1.5 trillion baht into populist rice schemes. Half of that was the yingluck government over the past 3 years. It is not only a staggering amount of money, it also highlights that the schemes were never designed to help the poor. For starters the 2.59 million of the poorest farmers didn't even qualify for the latest rice scheme.

This is why reform is needed. 1.5 trillion would have gone along way in solving the rice farmers problems had it been funneled into responsible long term programs that include educating farmers on sustainable farming techniques which is what the DRT are currently doing.

The only people that won't be happy under the new DRT initiatives will be the miller and warehouse owners.

A new day is dawning and the rice farmers will finally be able to stand on their own 2 feet. Using them as a political tool while abusing them is over.

[ezzra]

It come to show you a. what ever you give to a poor man they will stay poor,

b. rice schemes, rebates, freebees, debt moratorium, and hand outs never

better the life of no one unless they know how to mange their money and life

and live within the means that governments/god has giving them....

[Ozziepat]

So, the solution to farmer debt is more debt and more government involvement in the rice industry? Are land owners going to be directed to sell their land to renters? Is the government going to commit to rice subsidies and controlled peripheral markets forever? Stay tuned for the next exciting episode of Unanticipated Consequences.

[Ricardo]

Yay for Thaksinomics !

[Chris Lawrence]

How much did the floods loose Thailand?

What has been the infastucture % spending in the country areas compared to Bangkok?

What has been the spending on the military over that period of time; how many skirmishes have they been in apart from the coups?

Anyone going after the $1 m+ the boys over at Thai Tobacco recieved?

What social propgrams have been developed over that period and there effectiveness?

Spending on education, health and in what areas greater %?

Spending on rural farm projects?

The Nation appears to have a 'democratic' agenda which comes out as a biasis. Why do they want to keep comming up with what the 'farmers got'?

There are a lot of other things that need reminding of.

I just get this feeling that a smoke screen is being set up by this type of reporting?

[djjamie]

How much did the floods loose Thailand?

What has been the infastucture % spending in the country areas compared to Bangkok?

What has been the spending on the military over that period of time; how many skirmishes have they been in apart from the coups?

Anyone going after the $1 m+ the boys over at Thai Tobacco recieved?

What social propgrams have been developed over that period and there effectiveness?

Spending on education, health and in what areas greater %?

Spending on rural farm projects?

The Nation appears to have a 'democratic' agenda which comes out as a biasis. Why do they want to keep comming up with what the 'farmers got'?

There are a lot of other things that need reminding of.

I just get this feeling that a smoke screen is being set up by this type of reporting?

For 15 years the Shin led governments narrative has been that they are helping the poor farmers and they had been spewing that rhetoric, ad nauseum for 15 years and that rhetoric had been vigorously defended by red apologist ad nauseum as well for 15 years.

We all knew they didn't help the poorest farmers and when it is proven and presented to us it is quickly dismissed, deflected, subject changed and written off as a smoke screen.

So nothing to say on the poor rice farmers that have been left behind by a government that purported to help them?

Nothing? I get the feeling that a smoke screen is being set up by you to deviate from the inconvenient truth that the rest of us knew 15 years ago.

Edited June 23, 2014 by djjamie

[phantomfiddler]

It come to show you a. what ever you give to a poor man they will stay poor,

b. rice schemes, rebates, freebees, debt moratorium, and hand outs never

better the life of no one unless they know how to mange their money and life

and live within the means that governments/god has giving them....

Right on ! If s**t ever becomes valuable, the poor will be born without <deleted> ! One would think that there would be a few redshirts smart enough to realize that they were being led down the garden path, but I suppose they were getting paid extremely well not to inform their farmer friends of the obvious outcome.

[tim armstrong]

In this whole discussion there is not a single word about MARKETING. Reducing the increased costs of production will only work if farmers get a realistic price for their product. They will only get a realistic price if rice for instance, is not resold again and again, before it reaches the consumer. Farmers in Thailand now are quite capable of increasing production by 50% in some areas, but why would they when they mostly have absolutely zero control over marketing and don't know at the beginning of the season what the price might be when they sell their rice.

There needs to be a more predictable way to market Thai rice.

[AGareth2]

having to pay 300 bht a day per worker(they deserve to be paid 300) has increased costs in labour intensive agriculture

cost of product delivered has not gone up, in some cases has declined

This is causing shrinking margins if not losses

[GuestHouse]

I've said for a long time there needs to be an investigation into the exchange of land titles -who is selling, who is buying.

[Manbing]

So the supposed people's champion seems to have really failed to improve the quality of life for this unfortunate population.

The example given of using the land as collateral and then heaping on the NPL interest smacks of usury.

To encumber an uneducated group with complex unrealistic loan repayments is exploitation of the worst kind. If you really want to help these people there are plenty of examples of government sponsored no interest loan schemes.

After all the enticements to farmers to participate in the rice pledging scheme were simple fairy stories.

To hobble this population with debt is unforgivable. It would be nice to see the new regime confiscate the amassed fortunes of the corrupt classes and invest them into a debt relief schemes to support this group.

Government staff could also manage a program of advocating with banks on behalf of the farmers, in the wake of the rice pledging scam to ensure that interest repayments are suspended on these private business loans.

[WhizBang]

Farmers' debts soared over past 15 years: study

So Thaksin Shinawatra et al have well and truely screwed the farmers.

Perhaps now, the farmers will wake up and realize that Thaksin NEVER gave a rat's behind about them, all he ever wanted/needed was their vote.

[Gunna]

My query is what was the 600,000bt loan for.

If it was for something to generate income, then it is a shame that it didn't work and the loan couldn't be repaid.

But I suspect it was for a new pickup truck ( to show off to the neighbours ) which didn't generate any extra income.

Or to pay back gambling debts, or some other non income generating expense or scheme.

In most western countries the banks won't lend money unless you can show you can repay the loan from your income. It appears in Thailand all they need is enough security, ie Chanote for land, and they will loan make loans to farmers knowing that they can't pay it back and will eventually lose their land

[Chris Lawrence]

How much did the floods loose Thailand?

What has been the infastucture % spending in the country areas compared to Bangkok?

What has been the spending on the military over that period of time; how many skirmishes have they been in apart from the coups?

Anyone going after the $1 m+ the boys over at Thai Tobacco recieved?

What social propgrams have been developed over that period and there effectiveness?

Spending on education, health and in what areas greater %?

Spending on rural farm projects?

The Nation appears to have a 'democratic' agenda which comes out as a biasis. Why do they want to keep comming up with what the 'farmers got'?

There are a lot of other things that need reminding of.

I just get this feeling that a smoke screen is being set up by this type of reporting?

For 15 years the Shin led governments narrative has been that they are helping the poor farmers and they had been spewing that rhetoric, ad nauseum for 15 years and that rhetoric had been vigorously defended by red apologist ad nauseum as well for 15 years.

We all knew they didn't help the poorest farmers and when it is proven and presented to us it is quickly dismissed, deflected, subject changed and written off as a smoke screen.

So nothing to say on the poor rice farmers that have been left behind by a government that purported to help them?

Nothing? I get the feeling that a smoke screen is being set up by you to deviate from the inconvenient truth that the rest of us knew 15 years ago.

Maybe you can ask a person why? before you lambast someone for adopting critical thinking.

No problem with answering a civil request. I don't supporrt either side, but I do like to see the average person get treated with dignity and respect.

I have spent 20 years working in areas of social reform.

Also in that 15 years there have been coups and other governments?

[Fat Haggis]

For starters the 2.59 million of the poorest farmers didn't even qualify for the latest rice scheme.

So why then have they still remained poor? You think it has nothing to do with the poor rice prices, the millers taking the piss, the cost of production going up?

Those farmers who didn't qualify were the victims of simple economics, perhaps if these farmers stopped being lured by the $$$$$ signs in their eyes and didn't expand through greed, and buy all the state of the art machinery, brand new pickups etc maybe they wouldn't have been in debt ? Buy out of necessity not out of vanity!!

The only person you can blame for being in debt is yourself, nobody should take loans out that they cannot meet the repayments, also you need to understand that the interest rates alone are mostly giving the loan companies and 200% ROI, they lend you 10,000, they get 20,000 back over the years.

All over the world people are in financial difficulties due to spending beyond their means, getting loans to repay loans etc.

A lot of their debts are brought on by their own greed, and their miss management of their finances.

[diehard60]

Yea knkow when I came here back in 1991 a bag of fertilizer was only 150 Baht. Now 2000 to 3000 baht. A little inflation goes a long way. But the price of rice has not gone the same percentage. This is why they are loosing money and having to borrow so much and then loose everything they had.

[kannot]

dont bleedin borrow more than u can payback and u dont need that shiny new car, man up an be responsible.............some hope eh, happens the world over

[indothai]

Wrong! In hindsight, loans got them into trouble and so it won't get them out of it. High operating costs also contributed, and going organic won't solve anything. Learn from the troubles the American farmers got into.

The solution:

- Refinance through the government and put a cap on interests.

- Government supported programs to ensure farmers get the best technology for farming.

- Government programs to monitor climate and irrigation controls. They need to know exactly where and when it's going to rain... again.. look at America, they can do it. Hong Kong's weather forcast system is light years more advanced and they aren't even in the agri business.

And all this isn't going to save the average farmer from working like a buffalo still..... The government needs to go to the land owners and negotiate a buy back program for the farmers so they can be independant again.

Are they trying to save the farmers? or are they trying to make the farmers rich?... Two completely different objectives... i believe the latter is what got the farmers into trouble.

"To solve these problems, farmers need to reduce costs through various measures. They include the use of organic fertilisers, the growing of wide varieties of farm produce and the setting up of a fund to acquire farmland for those lacking it. All this could be achieved through soft, long-term loans, the seminar was told."

[ClutchClark]

It come to show you a. what ever you give to a poor man they will stay poor,

b. rice schemes, rebates, freebees, debt moratorium, and hand outs never

better the life of no one unless they know how to mange their money and life

and live within the means that governments/god has giving them....

A farmer with 10-rai was not "poor".

Furthermore, you know absolutely no specifics to this persons circumstance, you simply create a history to suit your argument.

[ClutchClark]

Yea knkow when I came here back in 1991 a bag of fertilizer was only 150 Baht. Now 2000 to 3000 baht. A little inflation goes a long way. But the price of rice has not gone the same percentage. This is why they are loosing money and having to borrow so much and then loose everything they had.

But its so much for more fun for everyone who know nothing of agriculture to come on here and accuse farmers of irresponsible spending. Incredible the number of TV posters who celebrate another persons misfortune.

[northernjohn]

It come to show you a. what ever you give to a poor man they will stay poor,

b. rice schemes, rebates, freebees, debt moratorium, and hand outs never

better the life of no one unless they know how to mange their money and life

and live within the means that governments/god has giving them....

Sorry it sounds nice but in reality it does not work that way.

They may get more for their rice giving them more cash but the suppliers of needed products just up their prices as do the land owners the amount of the lease. Resulting in no gain what so ever.

What is needed is a method to help them increase their productivity with out the accompanying sharks taking the increased money they receive.

They need a way off the merry go round.

[monkeycountry]

Over the past 15 years inflation in Thailand has been somewhere between 4-5% on average. This means inflation has doubled in 15 years.

In other words, adjusted for inflation, farmers total debt now is roughly the same as it was 15 years ago.

It could be however that there are alot less farmers to share the total debt now compared to 15 years ago. Unfortunately the report does not mention that.

The fact that those who make these reports do not account for inflation is worrying. As an example, the average salary of Thais has probably also doubled over the past 15 years. Does that mean the average Thai is now twice as rich and can afford twice as much? (rhetorical question, does not need an answer)

[thumper101]

Interesting that over the past 15 years the Shin lead governments have also pumped 1.5 trillion baht into populist rice schemes. Half of that was the yingluck government over the past 3 years. It is not only a staggering amount of money, it also highlights that the schemes were never designed to help the poor. For starters the 2.59 million of the poorest farmers didn't even qualify for the latest rice scheme.

This is why reform is needed. 1.5 trillion would have gone along way in solving the rice farmers problems had it been funneled into responsible long term programs that include educating farmers on sustainable farming techniques which is what the DRT are currently doing.

The only people that won't be happy under the new DRT initiatives will be the miller and warehouse owners.

A new day is dawning and the rice farmers will finally be able to stand on their own 2 feet. Using them as a political tool while abusing them is over.

It's going to get a lot worse before it gets any better though.

No matter what the Junta does, their hands are completely tied thanks to the last Thaksin led governemnt and their 15 million remaining tonnes of rice stock and an expected 20 million more tonnes to be reaped from September onwards.

That will be 34 million tonnes in the country of which 10 million will be domestically consumed leaving 24 million for export.

They will only probably be able to export about 8 tonnes next year, any more than that and the global price starts to fall again and will increase the problem. Then you have the WTO stepping in.

The ONLY way to bring back the industry and the good rice prices is to either destroy all the rice held in stock (which we can't afford to do) or force the rice farmers to grow something else for probably three years to get the export stocks back to zero.

The reason they like to grow rice is that it is one of the most non labour intensive crops to grow. But they are going to have to bite the bullet for a while.

Get out of growing rice guys.... the industry is fluked and you can thank Thaksin and Yingluck for that

The Junta needs to see where the 600 billion in 'supposed' costs have gone.. bank transfers and government cheques all lead somewhere and see how much was actually justified and recall the rest which probably amounts to a lot of graft and corruption... Got to get that money back.

But in the end.... help is limited on this one and a lesson has been learned that you get what you vote for.... Sadly, if Thaksin came back with a new party next year, promising amazing wealth for all the poor, they will vote him back in anyway.... so is there any point in helping them?

I mean, they sold out their industry for a couple of years of good money, much more than they deserved and that got them mainly into the debts they are in, because they were too stupid to understand that it couldn't last.

[Robby nz]

For starters the 2.59 million of the poorest farmers didn't even qualify for the latest rice scheme.

So why then have they still remained poor? You think it has nothing to do with the poor rice prices, the millers taking the piss, the cost of production going up?

Those farmers who didn't qualify were the victims of simple economics, perhaps if these farmers stopped being lured by the $$$$$ signs in their eyes and didn't expand through greed, and buy all the state of the art machinery, brand new pickups etc maybe they wouldn't have been in debt ? Buy out of necessity not out of vanity!!

The only person you can blame for being in debt is yourself, nobody should take loans out that they cannot meet the repayments, also you need to understand that the interest rates alone are mostly giving the loan companies and 200% ROI, they lend you 10,000, they get 20,000 back over the years.

All over the world people are in financial difficulties due to spending beyond their means, getting loans to repay loans etc.

A lot of their debts are brought on by their own greed, and their miss management of their finances.

I see from your posts you have your areas of knowledge but unfortunately you have no idea what you are talking about on this subject.

I get around every day and I see how the farmers live and work here on the central plain and I can tell you there are very few who have any new gear at all.

They get in contractors who own the machinery to do the work that is needed so there is no need for them to own a flash tractor that they would only use for a couple of weeks a year, neither do they have new vehicles.

This is the typical farmers tractor I see around, and this one, with a new motor is in much better order than most :

Even then those who own one are in the minority for most use a pump motor such as this :

These are mostly used to connect to a pump to pump water in or out of the paddy, a pump like this, his one being driven by a small motor :

That this farmer is taking to another location towed behind typical farmer transport.

For the most part the rice farmers are in debt through no fault of their own, very few have decent houses and some live in hovels.

Neither are they ignorant as some would say but when it comes to selling their product the have no choice but to take the price they are given.

They cant leave the rice in the paddy after it has matured and once it is harvested have no way of keeping it till a better price comes along.

They have been screwed by everyone from the landlords, the suppliers of the products they need, the buyers right up to Governments who have given them unrealistic expectations.

They desperately need a better deal.

[Fat Haggis]

Can't knock or disagree with your post, but you're ommiting the crux, as to WHY they're in debt.

You have finger pointed towards everyone bar their own actions? I don't disagree with you, but debts getting out of control is partly the responsibility of their own actions.

When I had debt, I didn't blame it on anyone else, I had to revise my lifes plans, I had to stop being frivolous with cash, tighten up the purse strings, I took the debt on to make my family's life a bit better, but it cost me more in the long run, I didn't blame the cost of living, I didn't blame the banks for lending me the money, I took a reality check and realised that living beyond my means was the cause.

I have a little bit of sympathy with the farmers, but they're having to produce more to make more to ease their debts, they have just been paid double what their crop is valued at in todays market prices, and they're no longer going to get the massive handouts, why should the rice farmers who opted to join the scheme continue to expect to receive the same funds as before?

It's all too easy to point fingers to apportion blame on someone, without having a good look in the mirror

I love these pictures by the way, very errr appropriate one would say, highlighting a case of poverty, but what about all the thousands of the Kubotos that were fairly new that were seen descending into Bangkok, I seen with my own eyes over a dozen trailers full of new tracotors in one day heading "north" from Bangkok towards Udon Thani way, so someone is buying them

I don't pretend to have an in depth knowledge, but that doesn't mean I'm unable to post my own opinions sir

[djjamie]

How much did the floods loose Thailand?

What has been the infastucture % spending in the country areas compared to Bangkok?

What has been the spending on the military over that period of time; how many skirmishes have they been in apart from the coups?

Anyone going after the $1 m+ the boys over at Thai Tobacco recieved?

What social propgrams have been developed over that period and there effectiveness?

Spending on education, health and in what areas greater %?

Spending on rural farm projects?

The Nation appears to have a 'democratic' agenda which comes out as a biasis. Why do they want to keep comming up with what the 'farmers got'?

There are a lot of other things that need reminding of.

I just get this feeling that a smoke screen is being set up by this type of reporting?

For 15 years the Shin led governments narrative has been that they are helping the poor farmers and they had been spewing that rhetoric, ad nauseum for 15 years and that rhetoric had been vigorously defended by red apologist ad nauseum as well for 15 years.

We all knew they didn't help the poorest farmers and when it is proven and presented to us it is quickly dismissed, deflected, subject changed and written off as a smoke screen.

So nothing to say on the poor rice farmers that have been left behind by a government that purported to help them?

Nothing? I get the feeling that a smoke screen is being set up by you to deviate from the inconvenient truth that the rest of us knew 15 years ago.

Maybe you can ask a person why? before you lambast someone for adopting critical thinking.

No problem with answering a civil request. I don't supporrt either side, but I do like to see the average person get treated with dignity and respect.

I have spent 20 years working in areas of social reform.

Also in that 15 years there have been coups and other governments?

Ummmm, OK. Wonderful. There was also a war in Iraq and a tsunami in Japan, but I am not talking about that either.

I said "For 15 years the Shin led governments narrative has been that they are helping the poor farmers and they had been spewing that rhetoric, ad nauseum for 15 years and that rhetoric had been vigorously defended by red apologist ad nauseum as well for 15 years."

Guess what? The PTP didn't help the farmers even with the `1.5 trillion baht they invested into rice schemes over that 15 years.

The smoke screen is getting thicker Chris.

BTW - It is amazing that since the 22nd of May most red apologists now say "I don't support either side" I touch embarrassed me thinks.

[belg]

stop giving free credit cards to farmers ???

[chotthee]

Since Prayuth return all the Farmers money, they now have enough to pay back all loans with interest + spare to buy a few more iPhones for their mistress.