Thai Agriculture Minister: raising rubber prices a Herculean task

[webfact]

Agriculture Minister: raising rubber prices a Herculean task

BANGKOK, 11 Dec 2014, (NNT) - Rubber farmers from Songkla Province have vowed to wait and see whether the Government’s assistance measures would work before deciding on their next move.

Deputy Agriculture and Cooperatives Minister Amnuay Patisay has admitted that the demand of rubber planters that the minimum price of rubber be raised to 80 baht per kg before New Year is unrealistic, adding the Government will instead adopt various other assistance measures.

According to Mr. Amnuay, the rubber producers said they would not stage protests, but rather make their demand known by means of submitting letters.

Meanwhile, representatives of the rubber producers in Songkla Province said they would not make any further move until it is clear that the Government’s assistance measures are not effective. The authorities have rolled out campaigns to help rubber planters, which include low-interest loans for cooperatives to purchase latex, discounts on production materials, and instructing the Public Warehouse Organization to purchase processed rubber from the cooperatives.

Some of the campaigns have already kicked off, while others are underway, said the Minister. He also urged rubber planters to wait and see whether the campaigns can bring up the prices of rubber to 60 baht per kg as targeted before making their next move.


-- NNT 2014-12-11

[ABCer]

In any country, at any time, any Minister attempting to lift the price of any product gets one thing only.

It is called hernia.

BTW, the rubber tree plantations across Thailand is somewhat boring.

Personally I would prefer acacia. Smells nice and I love acacia honey.

Unfortunately I am not a Minister.

Edited December 11, 2014 by ABCer

[Commerce]

I want a pay rise for working alone, as my work is not paying me enough right now. Unless I make huge profits, I will forever demand government handouts!

[jaltsc]

"Rubber farmers from Songkla Province have vowed to wait and see whether the Government’s assistance measures would work before deciding on their next move."

In every business venture, in every country, there are gambles. Some pay off, others go bust. No difference here. They should have weighed the risks and benefits before making their decision whether to venture into that endeavor. Looking at ones government's follow through on past promises is one of the major considerations. The rubber farmers who chose to go ahead, rolled the dice and lost. That is the nature of business. If every government bailed out every failed business venture, their wouldn't be a standing government anywhere in the world. This is just another example of blind faith brought on by a cultural naivety of how the real business world operates. If there is any blame, it is upon the education system that does not prepare its students to make informed decisions in later life.

Edited December 11, 2014 by jaltsc

[slapout]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

[dcutman]

Maybe the govt should consider getting out of the farming biz

Thailand Encourages Rubber Farmers to Switch Crops

Move Follows Multiyear Slide in Rubber Prices

http://www.wsj.com/articles/thailand-encourages-rubber-farmers-to-switch-crops-1407839494

Rural Thailand to Try Again

This Time, Government Wants Farmers to Plant More Rubber Trees

http://www.wsj.com/articles/SB108543997172720113

Edited December 11, 2014 by dcutman

[gerry123]

no no you no understand we are farmer must be obeyed must be payed

[Rumble]

there are many items produced in Thailand that can be made of rubber or can have rubber ingredients instead of other materials.

Rubber can be made to stretch, can be as soft, can be as hard as one would like. and can easily replace many items and components made out of plastic today. it just takes a bit of imagination, for instance car bumpers can have a mixture of rubber and be flexible.

[Rumble]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

[jaltsc]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

Then have them grow food which benefits the local people. At the very least, if they don't sell their produce, they still have something to eat. They are just looking for unrealistic riches within an economic model they do not understand.

[slapout]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

No sh.t sherlock. as a landowner/farmer in Thailand for 25 plus years and several more decades farming and working for big companies to support my chosen farm life style, I can believe your placement of importance on farming communities, both here and abroad. I might disagree on you note of : one of the most important" but then I like to gourge myself at least 7 days a week, and I can think of no other industry that I need/must have to survive. You have a fantastic day now, you hear?

[gerry123]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

No sh.t sherlock. as a landowner/farmer in Thailand for 25 plus years and several more decades farming and working for big companies to support my chosen farm life style, I can believe your placement of importance on farming communities, both here and abroad. I might disagree on you note of : one of the most important" but then I like to gourge myself at least 7 days a week, and I can think of no other industry that I need/must have to survive. You have a fantastic day now, you hear?

and several more decades farming? how many years is decades ?? i know a decade is 10 but several amounts to ???

[worgeordie]

Next it will be the little Mom & Pop stores, saying they cannot

compete with the Tesco s and Big C, please help,then will

come the noodle sellers,the Taxi drivers have already been

helped, Then the Farangs,the THB is too strong, we need help.

Thailand the HUB of people seeking help from the Govt.

regards Worgeordie

[Thai at Heart]

"Rubber farmers from Songkla Province have vowed to wait and see whether the Governments assistance measures would work before deciding on their next move."

In every business venture, in every country, there are gambles. Some pay off, others go bust. No difference here. They should have weighed the risks and benefits before making their decision whether to venture into that endeavor. Looking at ones government's follow through on past promises is one of the major considerations. The rubber farmers who chose to go ahead, rolled the dice and lost. That is the nature of business. If every government bailed out every failed business venture, their wouldn't be a standing government anywhere in the world. This is just another example of blind faith brought on by a cultural naivety of how the real business world operates. If there is any blame, it is upon the education system that does not prepare its students to make informed decisions in later life.

Of course this begs the question, when they were being encouraged to plant more in Thailand why were the Thai rubber exporters also expanding in Malaysia and Indonesia.

Surely these companies who worked hand in hand with the government had some understanding of the state of the markets?

[wow64]

Got a good idea... pay the farmers what they want for the rubber and store it in stockpiles all over Thailand. Then when the rubber prices rises the Government can sell the rubber at a profit.

Anyone see any issues with this? Makes perfect sense.

[Emster23]

One of Hercules tasks was to clean out the stables. Probably easier than cleaning out the horse poop that passes for economic understanding of how markets determine price. At least the stables were not infinite.

[laocowboy2]

Got a good idea... pay the farmers what they want for the rubber and store it in stockpiles all over Thailand. Then when the rubber prices rises the Government can sell the rubber at a profit.

Anyone see any issues with this? Makes perfect sense.

Sadly (my wife has rubber plantations!) it will not work. It has been tried before, and on an international scale. However the stocks kept rising and the cost of borrowing to pay for the stock became unsupportable. The result was a flood of rubber back onto the market and a crash in prices.

If we were talking about something produced, consumed and traded only within Thailand, a buffer scheme could work (although it would be expensive). However rubber is internationally traded and internationally produced and consumed. So we are back to supply and demand. Supply has been rising as trees planed over the last decade or so begin to produce (it takes 6-7 years for this after planting) and then reach peak output (another couple of years or so). And once producing, trees continue to do so for up to 20 years although output tends to tail off towards the end. In Thailand, a lot of marginal land rice farmers swapped over to rubber (with government encouragement) in the period since 2000. Not sure of the supply dynamics in Malaysia etc. Demand depends on the world economy in general and the auto industry in particular. Neither are too great at present so rising supply meets static demand = falling prices.

Over time, supply and demand will readjust. Old trees will cease to produce - and may well not be replaced if prices are low - while demand should inch up as the world economy grows (and auto ownership rises in India, Indonesia, Africa etc.). But it will not be a fast process. Current forecasts are for rubber output to decline in 2014 - but only by 1% to 11.05mn tonnes. Of this, Thailand 4.11mn tonnes or a decline of 1.6%.

This chart runs only to early 2013 but shows that the high prices of 2007-13 were atypical. This one is more up to date

[Eric Loh]

Double whammy for the rubber farmers this time with oil price vis synthetic rubber and a weak global economy. Got themselves to blame for abandoning their rice fields and fruit trees for rubber. Looks like their northern cousins are smarter to persevere with rice, cassava and sugar cane. At least those markets are more resilient and sustainable.

[Mudcrab]

I want a pay rise for working alone, as my work is not paying me enough right now. Unless I make huge profits, I will forever demand government handouts!

I thought you were an Aussie before...now I'm convinced.

[Mudcrab]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

No sh.t sherlock. as a landowner/farmer in Thailand for 25 plus years and several more decades farming and working for big companies to support my chosen farm life style, I can believe your placement of importance on farming communities, both here and abroad. I might disagree on you note of : one of the most important" but then I like to gourge myself at least 7 days a week, and I can think of no other industry that I need/must have to survive. You have a fantastic day now, you hear?

Wow, that's a long time.

Who else has supported your chosen farm life style?

I hope not too many taxpayers!!

[Ulic]

The price of rubber will not go up until the price of oil goes up. End of story. Farmers and the Thai government have to

understand this. Better to pay people to cut the trees down. Not the old non-producing trees either. Move on to another

crop.

[RubbaJohnny]

Monoculture when not absolutely necessary is stereotypical uninformed risk taking.

Governments should keep out of price setting even big ones like EU US and China cannnot buck international markets.ASEAN is also slated to start in 3 weeks when Thais will need to be more competitive.

With cheap world oil and oversupply farmers need to get busy on other work.of course many will be in the hands of loan sharks having spent future earnings in Pick up trucks,phones and other devaluing assets.

Edited December 11, 2014 by RubbaJohnny

[Thai at Heart]

Got a good idea... pay the farmers what they want for the rubber and store it in stockpiles all over Thailand. Then when the rubber prices rises the Government can sell the rubber at a profit.

Anyone see any issues with this? Makes perfect sense.

Sadly (my wife has rubber plantations!) it will not work. It has been tried before, and on an international scale. However the stocks kept rising and the cost of borrowing to pay for the stock became unsupportable. The result was a flood of rubber back onto the market and a crash in prices.

If we were talking about something produced, consumed and traded only within Thailand, a buffer scheme could work (although it would be expensive). However rubber is internationally traded and internationally produced and consumed. So we are back to supply and demand. Supply has been rising as trees planed over the last decade or so begin to produce (it takes 6-7 years for this after planting) and then reach peak output (another couple of years or so). And once producing, trees continue to do so for up to 20 years although output tends to tail off towards the end. In Thailand, a lot of marginal land rice farmers swapped over to rubber (with government encouragement) in the period since 2000. Not sure of the supply dynamics in Malaysia etc. Demand depends on the world economy in general and the auto industry in particular. Neither are too great at present so rising supply meets static demand = falling prices.

Over time, supply and demand will readjust. Old trees will cease to produce - and may well not be replaced if prices are low - while demand should inch up as the world economy grows (and auto ownership rises in India, Indonesia, Africa etc.). But it will not be a fast process. Current forecasts are for rubber output to decline in 2014 - but only by 1% to 11.05mn tonnes. Of this, Thailand 4.11mn tonnes or a decline of 1.6%.

This chart runs only to early 2013 but shows that the high prices of 2007-13 were atypical. This one is more up to date

They would be better to do be every single provably employed rubber farmer a cheque for 9000 baht per month for the next 6 months. Equivalent to 300 baht per day.

And then pay market rate for the rubber.

[chooka]

The threat of a public protest (illegal under present law) seems to be the latest mindset of those in meed of the latest mobil phone, television card, hospital care, budget education, etc The rubber farmers have been and still are being taken for a ride on a vehicle, which they do not know how to steer, service, nor maintain. The chose the one crop per year income and its only due to their attitude toward not wanting to work hard for 12 months/year, that is holding them in the dire straits they find themselves in. Those that do their own tapping are making a go of it, these protesters most likely have control of illegal land plots, hire illegals to tap and screw everyone they do business with. Shape up or ship out, work for another individual (boss), comes to mind.

They seem to think that they should have the where with all to tell the government and the rest of the population, that they are the boss and this is how much they demand in compensation which we expect you to furnish. They are no better/worse than the corrupt civil servants/politicans who run this country..

Actually believe it or not the farming is one of the most important communities in Thailand as well as many countries, or would you prefer only to buy imported food products.

No sh.t sherlock. as a landowner/farmer in Thailand for 25 plus years and several more decades farming and working for big companies to support my chosen farm life style, I can believe your placement of importance on farming communities, both here and abroad. I might disagree on you note of : one of the most important" but then I like to gourge myself at least 7 days a week, and I can think of no other industry that I need/must have to survive. You have a fantastic day now, you hear?

Wow you own land in Thailand, how did you manage that?