Time to face harsh market realities of rice growing

[rickudon]

Reality is that land consolidation is needed. But it will happen. In the North-east, it is hard to find a farmer under 40 years old, and more and more land is going fallow. Younger people are diversifying their occupations. What the government needs to do is pay farmers a proper pension when they get to 60 or so, then they wouldn't have to keep growing those  5 rai of rice. But they will not sell the land unless they can buy something tangible, not pieces of paper in a bank.

 

Growing new crops, new methods - that needs money, time and experience. Without the first you won't get the other two before you go bust.

[digibum]

On 11/2/2016 at 6:20 PM, OMGImInPattaya said:

Remember a few years back, when prices were high, and some brain-stem in the government had plans to set up a "rice cartel," ala OPEC, to ensure permanently high prices ?

 

Yes, and I remember laughing hysterically at it at the time.  I mean the hubris was off the scale.  They literally thought rice was on par with oil and that once they cornered the market Thailand would be like Saudi Arabia in terms of wealth.  

 

Only one tiny flaw in that logic.  Anybody can grow rice.  The higher the price goes the more enticing it is for people to grow it which means that barring a hurricane or flood that wipes out everyone else's rice, there's a cap on how much the price will appreciate.  

 

I mean, this is f'ing Business 101 and the guy in charge of the nation's biggest cash crop has zero clue on how markets work.  

 

Interestingly, it was this same stupid thinking that led to the rice scheme.  Thailand was going to horde all of the rice and drive the prices up and then make massive profits.  But they forgot about India and Vietnam who filled the gap and rice didn't appreciate to astronomical levels as predicted and Thailand got stuck with silos full of rotting rice.  

 

 

[digibum]

On 11/2/2016 at 7:22 PM, ballpoint said:

What is really needed to be faced is the reality that small, family run farms, are not viable economically.  Starting with a plot of land that once fed the family with rice, fish and frogs back in the days of buffalo power (which actually weren't that long ago), long before the "requirement" for a pickup truck, motorcycle, high end phone, tractor, and all the other accoutrements of the modern age that the television tells us we need, and then progressively dividing it up among the children and grandchildren who want all that fore mentioned stuff, is not going to work.  Add in the fact that the small patchwork farm structure of Issan is notoriously inefficient, and the increasing requirement to buy fertiliser due to the land being continually worked for hundreds of years, and you get to the situation we have today - barely, if even that, making ends meet.  Harsh as it may seem, the country and farmers have three choices:  Either carry on living like they have done for centuries before them, making enough from the farm for their own survival and abandoning the desire for modern comforts;  move into a different occupation / crop / farming method; or continue scraping a living, being subsidised by the government, and pawns for whatever power grabbing group pays them a few hundred baht to vote it into power or protest and die on its behalf.  

 

Agreed.  It's not a sustainable model.  But it is a model that benefits the wealthy and politicians so I'm sure we're a long way away from ever seeing the government come in and try to ween the farmers off this model towards a model of financial independence.  

 

I mean, you cannot possibly imagine a better scenario for manipulating the people for your own benefit.  Have the people dependent on an economic model that guarantees no upward mobility and trickle down government benefits on them like crumbs.  Whenever they get frustrated you just offer to buy their rice for a few baht more than what they are currently getting or promise them more loans so they can go further in debt and they keep you in office.  

 

Make sure they receive the worst possible education so they're uneducated and lack critical thinking skills and then pacify them with nationalism and soap operas.  Be sure to keep the news media full of trivial dramas and political infighting so people are occupied but never let them see the bigger picture or discuss the massive inequality.  

 

You can run that model for a few hundred years before they catch on.  

 

 

[digibum]

On 11/3/2016 at 1:13 AM, bkkgriz said:

 

This is spot on. My family's 2500 acre farm was not economically viable anymore so we got out of the business. Operating costs are just way too high for small farmers to survive anymore. It's a problem for farmers all over the world. Family farms are a thing of the past. If you don't own 15 to 20,000 acres in the US, it's not economically viable. 10 and 20 rai farms in Thailand are in the same boat.

 

While it's devastating to the individual farmers, it's actually not a bad thing for society.  If every 2,500 acres has to support an entire family then prices to consumers is going to be higher.  If someone can run 20,000 acres for the same cost, the price for food declines.  

 

The trick is transitioning those farmers into other professions which offer them more opportunity.  Instead of paying rice subsidies or giving out loans to people who surely won't be able to pay them back, funnel that money into training people for some sort of other skilled labor profession or offer university scholarships so the family has a way out.  

 

[digibum]

2 hours ago, rickudon said:

Reality is that land consolidation is needed. But it will happen. In the North-east, it is hard to find a farmer under 40 years old, and more and more land is going fallow. Younger people are diversifying their occupations. What the government needs to do is pay farmers a proper pension when they get to 60 or so, then they wouldn't have to keep growing those  5 rai of rice. But they will not sell the land unless they can buy something tangible, not pieces of paper in a bank.

 

Growing new crops, new methods - that needs money, time and experience. Without the first you won't get the other two before you go bust.

 

Excellent point.  Farmers are the backbone of the Thai economy (or so says any politician pandering to farmers) but where is their pension?  Where is their opportunity to give a better life to their children?  

 

The reality is that the farmer is a source of wealth for the already wealthy who built their fortunes on the backs of the farmers.  There is no incentive for them to give the farmer a path up because having them weak, uneducated, and with one foot in poverty, is a much better negotiating position.  It keeps them voting for politicians who promise to make things even a slightest bit better rather than demanding what is due to them.  

[Toknarok]

       It has rained here (S. Buriram) for the past 3 days, in fact it's pouring down right now. Right in the middle of the harvest season just when the farmers don't need it. Vast swathes of top heavy rice now lie flattened. This rice cannot be harvested by the combine machines, they cannot pick up rice that has fallen. Once down it stays down.

     The two combine harvesters in my village yesterday evening came back to their depot to be laid up. I saw at least another 4 combines being trailered away. As far as the combine machines are concerned their harvesting season is over a month early. They may get to harvest some late grown crop when things dry out.

    So now what. The only way to salvage flattened a flattened crop (if the grain hasn't already rotted) is by hand. Back breaking labour just like the old days before combines. Costly business, provided you can get the labour. Then the rice has to be threshed, I've seen one or two threshing machines, a few years ago there used to be dozens. I suspect many have been scrapped.

   Now the farmer has to make a big choice, does he go for the hand harvesting and threshing thereby incurring further costs or will he simply abandon the crop. With the very low prices being offered by the millers I suspect that many farmers will adopt the latter course. Cut enough rice to feed the family for the next year and leave the rest to rot.

   I envisage hundreds if not thousands of tons of quality hom malee rice will be lost. There will be no need to store the rice until the price (hopefully) would increase. In all probability the price will rise because of a shortage.

    Pity the poor farmer - it never rains but it pours. There are going to be some desperate people in this part of the woods. 6 baht a kilo was better than eff all which is what a lot of them will be getting now.

[spidermike007]

On 11/3/2016 at 10:04 AM, pookiki said:

I wonder if the junta consulted with the World Bank before implementing this program?

 

Consulting with outside expertise? Using experts from outside of Thailand for the pursuit of prosperity, economic excellence, innovation, the expression of creativity, or even just trying to keep up with the neighboring countries in the region? Why would they do that? That would be an expression of progressive thought. How dare you even consider such an idea. 

[SaintLouisBlues]

6 minutes ago, spidermike007 said:

Consulting with outside expertise? Using experts from outside of Thailand for the pursuit of prosperity, economic excellence, innovation, the expression of creativity, or even just trying to keep up with the neighboring countries in the region? Why would they do that? That would be an expression of progressive thought. How dare you even consider such an idea. 

Surely you've realized by now - the only people who understand anything and everything about Thailand are Thais