Thai rubber farmers wheeze as prices slump

[Lite Beer]

Thai rubber farmers wheeze as prices slump

Phang Nga, Thailand | AFP | Sunday 10/12/2014

As rubber prices slump, hard-up farmers in Thailand -- the world's top producer of the commodity -- are appealing for a bailout, testing the junta's resolve to end populist policies and an entrenched subsidy culture.

The global price for a one kilogramme sheet of natural rubber has retreated to 43 Thai baht ($1.3) after a three-year slide.

That decline, from highs of up to 120 baht in 2011, has chiselled away the income of Thailand's estimated six million rubber farmers.

Many of them reside in the nation's south, a region home to the ultra-royalists who backed a May army coup that toppled the elected government.

Now, as their profits shrivel, they want payback from an army they helped propel to power.

With dawn creeping over his plantation in Pa Ko subdistrict of Phang Nga province, Jade Charongan said tapping his 500 trees for the once-lucrative sap yields around $130 a month.

Three years ago he earned five times that amount, as surging demand from China saw rubber reach highs of $3.6 a kilo.

"Now the rubber price is very, very low and life is tough," Jade said adding that rising living costs mean "farmers in almost every house have problems".

The uncertainty heaps further misery on the daily 4:00 am torch-lit trudge to bleed the trees for the milky white sap, he added.

The Thai Rubber Farmers' Association says the kingdom produces around four million tonnes per year with an average annual export value of around $8 billion -- although that sum has been sheared by falling global prices.

- Rubber revolt? -

Farmer Somjai Chomkhwan, 51, was among thousands of southerners who travelled to Bangkok to join the mass rallies that paralysed Yingluck Shinawatra's government, paving the way for the May 22 coup.

"When the junta came into power, we expected the rubber price would probably be increased," he told AFP.

"But it has been months and the rubber price has kept dropping."

Farmers' groups are calling on the military government to guarantee the price at 80 baht a kilo.

They also want the suspension of a plan to release 210,000 tonnes of stockpiled -- but fast-degrading -- rubber to the market, fearing it will further depress prices.

Their disquiet threatens a fallout with the junta.

"If the government does not adjust the price, we will go to meet the Prime Minister," Sawad Ladpala, president of the Thai Rubber Farmers' Association, told AFP.

"We have been calling for help for a long time but there has been no clear stance or direction (from the government) yet," he added.

The protests which presaged the coup targeted Yingluck and the political ascendancy of her brother Thaksin -- a billionaire former premier who is reviled in the Thai south but adored in the rice-growing north.

The demonstrators accused the Shinawatra clan of lavishing state subsidies on its rice farming electoral base at the expense of the rest of the country.

Yingluck swept to power in 2011 on a wave of support from the north and northeast on a pledge to pay up to 50 percent of the market price for rice -- a policy she said was necessary to help the rural poor.

State largesse under her tenure also extended to rubber farmers.

Following violent protests in the south last summer, she doled out $80 per 0.4 acres (0.16 hectares) to help ease dropping prices.

-- (c) Copyright AFP 2014-10-12

[ClutchClark]

I foresee quite alot of farmland changing hands in the near future. Big money interests will consolidate the small farms, limit production, hire back some of these farmers as laborers.

[worgeordie]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

[Costas2008]

They didn't like the subsidies given to the rice farmers by the Sinawatras. that I also believe it was very wrong, now they want subsidies for themselves.

Where is the logic to that and why the government should succumb?

I do understand their hardship and concerns but they have to be patient and survive with their own means,

They live in a free trade world and have to adjust with the ups and downs.

Hand outs is a matter of the past, hope we don't see it again for the benefit of all the people, and not just the rubber farmers, in Thailand.

[ClutchClark]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

My wife comes from a large extended family of rubber tree farms. They tell me many farmers have borrowed against their land and those debts can't wait for a bounce back.

Perhaps someone here on TV can shed more light on this?

[Mosha]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

They won't, 5.5M Rai came on line in non traditional areas (eg Ghana) this year and more to follow.

Edited October 12, 2014 by Mosha

[Pib]

Lot more rice farmers than rubber farmers...the sheer number of people and voters (i.e., rice farmers and their families) get any govt's attention, whether that govt is elected or not.

Unfortunately, I think the rubber farmers will get little to no help which would put any significant amount of money in their pockets anytime soon. The govt is trying hard to stop the domino effect of needing "to give every group of farmers who grow something" a subsidiary....trying to stop the expectation of, "Well, you gave that group of farmers money...I want some too for my crop!"

[4jasmin]

recently, there was a documentary, that a german care tire producer ( continental ) is experimenting with a new method

to use organic substances instead of rubber

immediately, I was thinking : this will cause the rubber prizes to fall

here you can see the tokyo rubber futures

http://www.tocom.or.jp/souba/rubber/

make the best out of it

[Toknarok]

Bit of som nam na for the rubber farmers in the South I think. In September 2013 Yingluck proposed to double the subsidy paid to rubber farmers. That was deemed not good enough and a couple of months later they went on a rampage which ended up with Yinglucks Government being toppled by the coup.

Now these same farmers are complaining bitterly because the Junta whom they wholeheartedly supported are reluctant to impliment popularist policies and are obfuscation on giving out subsidies for rubber.

Edited October 12, 2014 by Toknarok

[halloween]

Bit of som nam na for the rubber farmers in the South I think. In September 2013 Yingluck proposed to double the subsidy paid to rubber farmers. That was deemed not good enough and a couple of months later they went on a rampage which ended up with Yinglucks Government being toppled by the coup.

Now these same farmers are complaining bitterly because the Junta whom they wholeheartedly supported are reluctant to impliment popularist policies and are obfuscation on giving out subsidies for rubber.

She only managed to lose B700+ billion, plus ongoing interest estimated around B300 billion, on rice, so surely she should have been allowed to waste a few hundred billion more on rubber. And why wouldn't rubber farmers expect the same treatment as rice farmers, cassava farmers and whoever else got on the government tit?

Welcome to the world of economic rationalism, and thank god the junta threw her sorry butt out of the PM's chair before she did any more damage.

[marinediscoking]

I wish someone would explain why prices for tires here have continued to rise the past few years? I can't find a dealer willing to sell me a set of band name tires for my car for less than 4,100 baht per tire. I get a quote when ever I stop somewhere to get air. Last time I bought tires they were a 1,000 bath cheaper each and that was when the rubber price was near the high and they all make their tires here in Thailand.

[harness]

I agree with you Toknarok. Som num naa . A Nation article the other said that 0.1% of the Thai population own 46% of the country's wealth. The rubber boys from the south went onto the streets to help this group recover full control. Now they're in power forever, and they're not willing to help out their supporters with subsidies. How sad eh.

[Thai at Heart]

I foresee quite alot of farmland changing hands in the near future. Big money interests will consolidate the small farms, limit production, hire back some of these farmers as laborers.

Its inevitable. Many of the large exporters Thai Hua and others already have their own plantations per se.

[harryfrompattaya]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

My wife comes from a large extended family of rubber tree farms. They tell me many farmers have borrowed against their land and those debts can't wait for a bounce back.

Perhaps someone here on TV can shed more light on this?

I guess you as well as other TV members should help out kend them the money until the price bounces back. If it was my extended family if lovable people I will give them the money no strings attachs

[fayou]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

They won't, 5.5M Rai came on line in non traditional areas (eg Ghana) this year and more to follow.

Do you have a link ? please .

[Thai at Heart]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

They won't, 5.5M Rai came on line in non traditional areas (eg Ghana) this year and more to follow.

Do you have a link ? please .

Just the extra supply in Thailand coming online is large. Then Laos and Cambodia too.

The global volume is up. Prices are down. The 120 baht a few years ago matched with a confluence of high oil prices.

[diehard60]

I do not feel for them in the least little way. They brought this on themselves. When the prices were so high they decided to plant more and more. There is a thing called supply and demand. But they dont understand that.

[ClutchClark]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

My wife comes from a large extended family of rubber tree farms. They tell me many farmers have borrowed against their land and those debts can't wait for a bounce back.

Perhaps someone here on TV can shed more light on this?

I guess you as well as other TV members should help out kend them the money until the price bounces back. If it was my extended family if lovable people I will give them the money no strings attachs

Do I detect sarcasm?

The fact is they are diversified and have a much better understanding of the Ag market in Thailand and SE Asia than I do and absolutely more than the expat community, in fact, they have been increasing their land holdings for years.

But thanks for your advice.

[ClutchClark]

I do not feel for them in the least little way. They brought this on themselves. When the prices were so high they decided to plant more and more. There is a thing called supply and demand. But they dont understand that.

Do you have even basic knowledge of the production cycle of a rubber tree operation?

Your post simply sounds like you have issues in general.

[Eric Loh]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

[tbthailand]

"When the junta came into power, we expected the rubber price would probably be increased," he told AFP.

crazy to connect these two points unless he is thinking about dramatically increased production of stamps

[Thai at Heart]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

The wholesale complete and utter lack of a plan is the problem. Allowing the market to just ebb and flow with absolutely no plan at all is ridiculous. How did it come to pass that they planted this enormous new area in isaan while the supply in the south is still online?

Rice is the same. Sugar is the same. Thailand is at the top in terms of volume and yet many of its farmers still live in abject poverty.

Edited October 12, 2014 by Thai at Heart

[BangkokHank]

The irony is that subsidizing anything keeps the production of that thing higher than it otherwise would be, which in turn keeps the price lower than it otherwise would be. The only way for prices to rise is for production to decline. For production to decline, unfortunately some producers will have to go out of business.

[fayou]

I do not feel for them in the least little way. They brought this on themselves. When the prices were so high they decided to plant more and more. There is a thing called supply and demand. But they dont understand that.

But also with the help from the government .

The Thai government ( Thaksin ) spent 1.4 billion baht buying 90 million seedlings under its plan to increase the country's rubber cultivation area in 2004 .

the price for rubber in Oct. 2004 was exactly the same like it is today .

Yes you are right , more rubber dosen't make more demand ! But, the gov said in 2004 that the world's demand for rubber is 'huge' ! Every poor farmer who had a little money was very thank full for help and was full of hope for a better life.

[ClutchClark]

The irony is that subsidizing anything keeps the production of that thing higher than it otherwise would be, which in turn keeps the price lower than it otherwise would be. The only way for prices to rise is for production to decline. For production to decline, unfortunately some producers will have to go out of business.

Some of the issue is continued increase in competition such as Indonesia Production growth. There is also a direct relationship between rubber prices and the price of petroleum. As oil prices drop then the cost of synthetic rubber decreases making demand for natural rubber to fall off...and you can see the cycle.

So there are more factors than a simple supply and demand model.

A rubber tree is not even tapped for atleast 6 years and preferably 7 and produces another 25 years. As you can imagine, there would be a large economic loss to cut down a plantation to start a different crop like palm oil unless your trees are nearing the end of their productive life.

So, what is the long-term forecast for Brent Crude?

[winstonc]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

more rubbish from you again eh eric ...no blame the farmers they werent crying when they were milking it in..they only tap it themselves now it was always burmese up at 3a.m doing the work while they lay in a drunken stuper..never heard of putting something away for a rainy day...let em go under if they cant manage it...i lived in kokkloi in phang -nga up to 2 years ago i know..how it works...its called greed ..but remember its always some one elses fault over here isnt it..

[Mosha]

They will just have to wait until the prices "bounce" back.

regards Worgeordie

They won't, 5.5M Rai came on line in non traditional areas (eg Ghana) this year and more to follow.

Do you have a link ? please .

It was in the rubber tree topic in the Farmers Forum. Search Ghana and read on from there. A lot of reading as it was back in February when the price drop started to get bad. Ghanaian cocoa farmers moved to rubber becaise the government took most of the money paid for cocoa. A large amount being planted in Laos Cambodia and Vietnam.

Edited October 12, 2014 by Mosha

[Mosha]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

It goes way back before PDRC, before Abhisit's administration in fact.

[Gweiloman]

Are we likely to see some farmers marching to Bangkok, setting up stages and blockading Govt House again?

I quite enjoyed the party atmosphere the last time round. Traffic was a breeze (around Asok), free concert every night. If I'd wanted to, I could have eaten and drank for free even.

[Eric Loh]

That's the price the rubber farmers got to pay for following blindly the call from a master manipulator. They abandon their plantations and spent 7 months in poor conditions and bet that Sutherp will bring them a better live. Now when it's all over, the PDRC leaders are back in their comfortable positions and the farmers are in a worsen situation. Don't blame the junta, blame Sutherp. Doubt the next time he ask for their support, they will come. This will cause the Dem some election fallout.

The wholesale complete and utter lack of a plan is the problem. Allowing the market to just ebb and flow with absolutely no plan at all is ridiculous. How did it come to pass that they planted this enormous new area in isaan while the supply in the south is still online?

Rice is the same. Sugar is the same. Thailand is at the top in terms of volume and yet many of its farmers still live in abject poverty.

Think Issan started growing rubber trees 7-8 years ago when the rubber price was high. Most are small enterprises and acted really on impulse and not really have that mentality to think future. Perhaps there are lack of information and advise from the Commerce Ministry. I doubt any government can predict future price of hard and soft commodities whether it's iron ore, oil, wheat or jute. While hard commodities are usually owned by large corporations that can fend for themselves, soft commodities are usually small and family businesses and will always need help from the government even in rich nations like Japan. We can't abscond from subsidizing farm products as like you said most are in abject poverty. It's a social contract that the affordable population should help their fellow poorer countrymen. Here it's exploited by politics whether as large populist policies or indiffences by the richer tax payers.