Study warns of huge loss in Thai rice export value

[webfact]

RICE
Study warns of huge loss in rice export value
Petchanet Pratruangkrai
The Nation



BANGKOK: -- Thailand will lose about Bt87.5 billion in rice export value during the next 10 years if the country does not put a serious effort into developing its farming sector and related industries, according to a study by the University of the Thai Chamber of Commerce's International Trade Studies Centre.

The study found that the rice industry had been going nowhere during the past decade. While costs of production have increased gradually, the income of farmers has declined, despite subsidy programmes by many governments.

"The Thai rice industry is at risk of losing more market share and competitiveness in global trading, particularly in Asean markets. Farmers have always been hurt by unsustainable policies by each government, with no long-term measures to promote the growth of farming and trading," said Aat Pisanwanich, director of the centre.

The average production cost for rice has increased considerably, from Bt4,835 per tonne in 2004 to Bt10,685 last year. Although the price of rice has also increased, farmers' net profit has declined over the past 10 years.

The price of Thai rice was quoted at Bt6,741 a tonne in 2013, while last year it averaged Bt11,187. This implies that farmers enjoyed an average profit of Bt1,906 per tonne in 2004, but only Bt502 last year.

Meanwhile, the average yield for rice-growing in Thailand has changed relatively little. In 2004, the average yield per rai was 422 kilograms, while last year saw a 457kg/rai yield for main-crop rice.

The average yield for second-crop rice declined during the period, from 680kg/rai in 2003 to 674 last year.

In stark comparison, the average yield per rai for Vietnamese rice is 1,200kg.

To urgently promote rice-industry development, Aat suggested the military-led government should launch a long-term plan for rice production and marketing.

The government could subsidise farmers' production costs by 20 per cent, which would help raise their income from the current Bt500 per rai to something in the region of Bt2,000-Bt3,000, he said.

The subsidy could be in the form of coupons or credit for the purchase of fertiliser, seeds and agricultural equipment.

In order to ensure export competitiveness, the government and private enterprises should cooperate closely on developing rice farming and marketing, said the director, adding that the authorities must restructure the industry's organisation and increase participation among farmers, millers and exporters.

Thailand should have a single overseas marketing team, involving representatives from government agencies and exporters, to promote Thai rice abroad.

In the long run, the government should promote farmers to rely less on chemical fertiliser, and support organic-rice production, or high value-added rice.

The study forecast that Thailand would lose a total of Bt87.5 billion (or Bt8.7 billon per annum) in rice export value through to 2022 if a serious effort is not made to develop the sector, with the country's share of the world market dropping to 2.3 per cent - compared with 2.5 per cent last year.

According to the centre, the Kingdom's market share in Asia would slump from 1.3 per cent in 2013 to just 0.3 per cent in the next 10 years because other rice-exporting nations - mainly Vietnam, Cambodia and Myanmar - would play a more significant role in supplying the continental market.

Market share for Thai rice shipments in Asean are also predicted to decline sharply, from 1.4 per cent to 0.7 per cent, while sales to Europe would be unchanged at 1.4 per cent, those to the Middle East would increase from 5.6 per cent to 8 per cent, and exports to Africa would rise from 25.9 per cent to 30.1 per cent during the next decade.

Source: http://www.nationmultimedia.com/business/Study-warns-of-huge-loss-in-rice-export-value-30243979.html


-- The Nation 2014-09-24

[trogers]

Why is the yield of Thai paddy so low? Cost of labour and machinery forcing the use of seed scattering instead or dunking?

[Fiddlesticks]

Meanwhile, the average yield for rice-growing in Thailand has changed relatively little. In 2004, the average yield per rai was 422 kilograms, while last year saw a 457kg/rai yield for main-crop rice.

The average yield for second-crop rice declined during the period, from 680kg/rai in 2003 to 674 last year.

In stark comparison, the average yield per rai for Vietnamese rice is 1,200kg.

Wow! Quite a disparity! Does anyone know why Vietnam is that much more productive in their rice yield apart from the obvious answer that they are harder working and smarter?

[GiantFan]

Middlemen making all the money.

[trogers]

Middlemen making all the money.

What is the link between middlemen and yield?

[BSJ]

Isn't this article almost the same as an article that appeared on this forum a month or so back?

The fact are the same and the commentary is much of a muchness.

[ramrod711]

The study found that the rice industry had been going nowhere during the past decade. While costs of production have increased gradually, the income of farmers has declined, despite subsidy programmes by many governments.

Thank you 3 times Thaksin, Yingluck and associates. Thank you for pretending to care about farmers while plundering the treasury. Just a coincidence I'm sure, that this occurred during your reign.

[jeanpierre]

they need a studie that proofs the opposit!!

[kotsak]

No wonder since most farming practices here haven't changed since the agricultural revolution, approx. around 10,000 B.C.

[umbanda]

I hope the Thai Government will understand that rice is not a good crop to resolve poverty in Thailand, and to increase country's export value, and will do something to change that. Thailand's King farming projects where researching that issue when the King was active, but for some reason farmers keep farming rice even knowing that is not profitable enough. Vietnam now is one of the big coffee producers in the world....and for a "coincidence" that is exactly what Thailand"s King was traying to implement here in large scale for so many years.

[jonclark]

Thailand seems to have rested for some considerable time on its laurels. In part due to a combination of that monotonous drum beat that Thai rice is best, Thai people know best, and that rice farming, was, is and always shall be, at the heart of Thai culture and it simply can't change. Combine all of these elements with an introspective view of the world and its hardly surprising that countries which are genuinely open to innovation and investment surpass Thailand.

I am reminded of the old slogan : Improvise, adapt and overcome.

Words of wisdom which Thailand could do well to consider.

[timewilltell]

If the government wants to do something then it should invest in local vocational training schools to promote best practices for rice farmers. Second it should regulate minimum prices offered by middlemen and better still have a government run middleman service to compete by offering reasonable rates. Lastly control the millers prices so that neither middleman nor miller can corner the market leaving the farmer to pick put he tab.

The vocational training centers could promote other crops as well that offer the potential for better profit. If there is little take up because of ignorant skepticism then allocate government owned land as micro projects for various alternative crops so people can actually see what yields and profits can be had in the local area.

There would soon be a change of scenery and perhaps some improvement in farmers incomes. Thailand is getting so far behind everywhere else because of its ignorance and the oppression of the poor by the rich and influential.

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[alant]

The study found that the rice industry had been going nowhere during the past decade. While costs of production have increased gradually, the income of farmers has declined, despite subsidy programmes by many governments.

Thank you 3 times Thaksin, Yingluck and associates. Thank you for pretending to care about farmers while plundering the treasury. Just a coincidence I'm sure, that this occurred during your reign.

As long as the only answer is to blame Yingluck I see no progress being likely.

[thesetat2013]

Hasnt anyone noticed they compare 2004 to last year? Last years gov robbed the thai rice farmers and scammed them in more ways than the rice scheme. Costing farmers and the country. They need to wait and see how the rice industry will do under new management. This report should have shown a comparison prior to the YL admin. Not during it

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[AnotherOneAmerican]

What I never understand, is why it costs so much more to buy rice, than the farmers get to sell it.

Part of the problem is the middle men taking all the profits.

[Utley]

Why is the yield of Thai paddy so low? Cost of labour and machinery forcing the use of seed scattering instead or dunking?

Different strains of rice produce different yields. Jasmine rice, I believe, has one of the lowest yields.

[tim armstrong]

This is quite a complex issue. Firstly,the type of rice, production costs and weather are the big factors in yield. Thai farmers will logically grow rice that is the cheapest to produce. They don't or cannot all grow hom mali orthe better quality fragrant rice, and its production costs are higher. Where they fall down is in the marketing, which is not controlled by the farmers. Producing higher value rice fro less paddy and encouraging more alternative land useage is essential.

[Utley]

The study found that the rice industry had been going nowhere during the past decade. While costs of production have increased gradually, the income of farmers has declined, despite subsidy programmes by many governments.

Thank you 3 times Thaksin, Yingluck and associates. Thank you for pretending to care about farmers while plundering the treasury. Just a coincidence I'm sure, that this occurred during your reign.

Don't forget Abhisit and the previous military coup bunch that overthrew Thaksin - they were present also.

[rreddin]

Thailand seems to have rested for some considerable time on its laurels. In part due to a combination of that monotonous drum beat that Thai rice is best, Thai people know best, and that rice farming, was, is and always shall be, at the heart of Thai culture and it simply can't change. Combine all of these elements with an introspective view of the world and its hardly surprising that countries which are genuinely open to innovation and investment surpass Thailand.

I am reminded of the old slogan : Improvise, adapt and overcome.

Words of wisdom which Thailand could do well to consider.

It seems to me that the OP has raised two issues. The first is that yield is low compared to other countries in the region. The second is that the cost of production is high, giving thin profit margins and low incomes for rice farmers. Both issues need to be addressed and therein lies the difficulty. Successive governments have tried to improve the farmers' incomes by supporting the price of rice, but this was unsustainable during a period in qhich the market price for the commodity fell below the guranteed price paid to farmers. Human nature being what it is, farmers will do the least possible for the highest price.

To address both issues needs a solution or combination of measures that will both increase yield and reduce costs of production. New plant strains and increased mechanisation as well as larger farm units seems the logical way to go. The restraining factor is that such measures are likely to bring about unplanned social changes or speed up those already in progress. Social change brings political change and that is not currently on the agenda. So, I expect nothing serious to be done about these issues.

[trogers]

Thailand seems to have rested for some considerable time on its laurels. In part due to a combination of that monotonous drum beat that Thai rice is best, Thai people know best, and that rice farming, was, is and always shall be, at the heart of Thai culture and it simply can't change. Combine all of these elements with an introspective view of the world and its hardly surprising that countries which are genuinely open to innovation and investment surpass Thailand.

I am reminded of the old slogan : Improvise, adapt and overcome.

Words of wisdom which Thailand could do well to consider.

It seems to me that the OP has raised two issues. The first is that yield is low compared to other countries in the region. The second is that the cost of production is high, giving thin profit margins and low incomes for rice farmers. Both issues need to be addressed and therein lies the difficulty. Successive governments have tried to improve the farmers' incomes by supporting the price of rice, but this was unsustainable during a period in qhich the market price for the commodity fell below the guranteed price paid to farmers. Human nature being what it is, farmers will do the least possible for the highest price.

To address both issues needs a solution or combination of measures that will both increase yield and reduce costs of production. New plant strains and increased mechanisation as well as larger farm units seems the logical way to go. The restraining factor is that such measures are likely to bring about unplanned social changes or speed up those already in progress. Social change brings political change and that is not currently on the agenda. So, I expect nothing serious to be done about these issues.

Larger farm units? Tell that to the dying farmer with over 100 rai, and his 5-6 children inheriting the farm.

[cloudhopper]

Hasnt anyone noticed they compare 2004 to last year? Last years gov robbed the thai rice farmers and scammed them in more ways than the rice scheme. Costing farmers and the country. They need to wait and see how the rice industry will do under new management. This report should have shown a comparison prior to the YL admin. Not during it

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Did you notice that the graph depicts yield/rai? That has nothing whatever to do with political administrations.

[Thai at Heart]

Middlemen making all the money.

What is the link between middlemen and yield?

His cousin sells fertiliser too.

[Thai at Heart]

Thailand seems to have rested for some considerable time on its laurels. In part due to a combination of that monotonous drum beat that Thai rice is best, Thai people know best, and that rice farming, was, is and always shall be, at the heart of Thai culture and it simply can't change. Combine all of these elements with an introspective view of the world and its hardly surprising that countries which are genuinely open to innovation and investment surpass Thailand.

I am reminded of the old slogan : Improvise, adapt and overcome.

Words of wisdom which Thailand could do well to consider.

It seems to me that the OP has raised two issues. The first is that yield is low compared to other countries in the region. The second is that the cost of production is high, giving thin profit margins and low incomes for rice farmers. Both issues need to be addressed and therein lies the difficulty. Successive governments have tried to improve the farmers' incomes by supporting the price of rice, but this was unsustainable during a period in qhich the market price for the commodity fell below the guranteed price paid to farmers. Human nature being what it is, farmers will do the least possible for the highest price.

To address both issues needs a solution or combination of measures that will both increase yield and reduce costs of production. New plant strains and increased mechanisation as well as larger farm units seems the logical way to go. The restraining factor is that such measures are likely to bring about unplanned social changes or speed up those already in progress. Social change brings political change and that is not currently on the agenda. So, I expect nothing serious to be done about these issues.

Go and look who owns the chemical companies that either make fertiliers or feed stock.

[RobthaiIre]

I would love to know where they got the cost of production per tonne figure of 10,600 baht. I got over 6 tons last year on 8 rai and I certainly didn't spend anywhere close 60k+ on tractors, fertilizer, labout etc. maximum 20k I spent. It was all sold (Jasmine rice) and I got 100+k so I made a profit of 80k. I also grew 3 rai for eating.

These figures quoted in this article are obviously based on the growing of poor quality, low yield rice on over used land in the central plans, where most of the people do not own the land they have to lease from wealthy landlords. This article or study only reflects a certain area of Thailand and certainly doesn't reflect the NE where I am, where I can sell Jasmine rice to traders at minimum 15 baht per KG or sticky rice at 11 baht per KG.

If people are going to do these studies they could at least state where they got there calculations from as the generalize the whole of Thailand based growing rice in a certain area is highly misleading and inaccurate.

Basically this study is a load of rubbish

[allan michaud]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

Meanwhile, the average yield for rice-growing in Thailand has changed relatively little. In 2004, the average yield per rai was 422 kilograms, while last year saw a 457kg/rai yield for main-crop rice.

The average yield for second-crop rice declined during the period, from 680kg/rai in 2003 to 674 last year.

In stark comparison, the average yield per rai for Vietnamese rice is 1,200kg.

Wow! Quite a disparity! Does anyone know why Vietnam is that much more productive in their rice yield apart from the obvious answer that they are harder working and smarter?

That is largely due to massive (over)use of chemical fertilisers. Vietnam's soils are fast being destroyed by their use of these chemicals, although the government did recently make a push for people to lessen the use. The reality is chemical fertilisers only work in the short term and without soil remediation (basically adding compost, which includes important organisms that turn various natural chemicals and chemical fertilisers into a form that is accessible to plants) the soil becomes hard and unable to hold the chemicals. The result is more chemical use and more chemicals leaching into water sources. I made a short film here in Cambodia last year on this subject and met the elderly couple who grew Cambodia's world beating rice for the past 2 years. They are totally organic and while their yield is not as high as the Vietnamese it was considerably better than the Thai average and was worth much more as it was organic. Over use or incorrect use of pesticides only exacerbate the problem of destroying natural processes.

It is all about education IMO.

Intelligent article, absolutely spot on... but will they actually do anything about it.

[billd766]

Hasnt anyone noticed they compare 2004 to last year? Last years gov robbed the thai rice farmers and scammed them in more ways than the rice scheme. Costing farmers and the country. They need to wait and see how the rice industry will do under new management. This report should have shown a comparison prior to the YL admin. Not during it

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

If you look at the pretty picture in the OP it actually shows year on year from 2014 to 2013 and you can pick out the years you want. Then you could probably do a Google search on the maket price of rice over that 10 year period and compare it to year on year.

Up to 2011 farmers did more on the quality of rice but when Yingluck and the PTP brought in the rice scheme farmers grew the quickest and cheapest rice therefore destroying Thailands claim to be the best quality rice.

[trogers]

Middlemen making all the money.

What is the link between middlemen and yield?

His cousin sells fertiliser too.

Price of fertiliser pertains to cost of production, and not to yield.

[Mudcrab]

No wonder since most farming practices here haven't changed since the agricultural revolution, approx. around 10,000 B.C.

And your answer is?......Wait until l the wheel is invented?

[AYJAYDEE]

I would love to know where they got the cost of production per tonne figure of 10,600 baht. I got over 6 tons last year on 8 rai and I certainly didn't spend anywhere close 60k+ on tractors, fertilizer, labout etc. maximum 20k I spent. It was all sold (Jasmine rice) and I got 100+k so I made a profit of 80k. I also grew 3 rai for eating.

These figures quoted in this article are obviously based on the growing of poor quality, low yield rice on over used land in the central plans, where most of the people do not own the land they have to lease from wealthy landlords. This article or study only reflects a certain area of Thailand and certainly doesn't reflect the NE where I am, where I can sell Jasmine rice to traders at minimum 15 baht per KG or sticky rice at 11 baht per KG.

If people are going to do these studies they could at least state where they got there calculations from as the generalize the whole of Thailand based growing rice in a certain area is highly misleading and inaccurate.

Basically this study is a load of rubbish

you got 15 baht a kilo last crop? what province?

[Mudcrab]

What I never understand, is why it costs so much more to buy rice, than the farmers get to sell it.

Part of the problem is the middle men taking all the profits.

I thought you blokes invented Capitalism