Thai rice politics and the future of agricultural subsidies

[Eric Loh]

11 minutes ago, tomta said:

A point that a lot of people seem to miss in Titipol's article is that through the rice premium from the 50s to 70s the rice farmers effectively subsidized the rest of the country. Bangkok and surrounds is where the wealth and productive capacity is now and it is there because the rice farmers were squeezed. So it's very annoying when the middle and upper classes in Bangkok (remember the "Respect my Tax" riposted to "Respect my vote" in 2014) catgeorize the rice farmers as being lazy, greedy and entitled.

 

Good observation. The beginning of the 20th century right up to mid 50s, rice is the main GDP earner and provided the financing of many developments and the foundation for economic diversification into manufacturing. Wealthy families will find their roots either directly or indirectly from the humble rice like the CP Group. Annoying when these people talk about their tax used for subsidies. 

[Russbert]

7 minutes ago, halloween said:

I don't see that as a valid reason to offer support to an industry that is both inefficient and low productivity, unless it is aimed at increasing both efficiency and productivity.

Modern Thailand was built on the back of rice farmers hard work - they deserve a government that values their contribution and cares about their future. Agricultural subsidies are used by all countries for many reasons including food security and economic development of marginalised rural communities. Thailand will always have agricultural subsidies it seems the debate is purely about the dollar value of those subsidies. If anyone's concern is about inefficient and unproductive industries being supported with tax payer money they'd be best served focussing their attention on Thailands closed economy that restricts foreign competition for established Thai conglomerates and their billionaire owners.

[halloween]

7 minutes ago, Russbert said:

Modern Thailand was built on the back of rice farmers hard work - they deserve a government that values their contribution and cares about their future. Agricultural subsidies are used by all countries for many reasons including food security and economic development of marginalised rural communities. Thailand will always have agricultural subsidies it seems the debate is purely about the dollar value of those subsidies. If anyone's concern is about inefficient and unproductive industries being supported with tax payer money they'd be best served focussing their attention on Thailands closed economy that restricts foreign competition for established Thai conglomerates and their billionaire owners.

That sounds like BS to me. What industry in Thailand has lower productivity than rice farming? What economic sense is there in handing someone money so that they can continue to produce less than they demand?

[Russbert]

Just now, halloween said:

That sounds like BS to me. What industry in Thailand has lower productivity than rice farming? What economic sense is there in handing someone money so that they can continue to produce less than they demand?

What economic sense is there in keeping the poor poor? Name the thing that Thailands poor have in common? Rice. So what is the best way for any government to get money into the local economies of the poorest regions? Rice subsidies. What you apparently seem to be missing is not that elected governments want to be paying large scale rice subsidies unendingly but that they want to build up the rural economies with cash injections to fund the growth of new industries and businesses in those regions. As it stands, how can any business survive in the north when all the consumers have no disposable income to become customers? Whether it be PTP, the Democrats or the military in power after the next election - there will be rice subsidies. The important thing is the underlying reason each group will have subsidies is different. One side wants to develop underdeveloped regions and the other two want to do just enough to prevent an uprising. One wants to spur growth, the others just want sufficiency. Only one of these options makes good long term sense for Thailand as it will create vastly more economic activity which in turn will reduce the need for future agricultural subsidies.

[halloween]

5 minutes ago, Russbert said:

What economic sense is there in keeping the poor poor? Name the thing that Thailands poor have in common? Rice. So what is the best way for any government to get money into the local economies of the poorest regions? Rice subsidies. What you apparently seem to be missing is not that elected governments want to be paying large scale rice subsidies unendingly but that they want to build up the rural economies with cash injections to fund the growth of new industries and businesses in those regions. As it stands, how can any business survive in the north when all the consumers have no disposable income to become customers? Whether it be PTP, the Democrats or the military in power after the next election - there will be rice subsidies. The important thing is the underlying reason each group will have subsidies is different. One side wants to develop underdeveloped regions and the other two want to do just enough to prevent an uprising. One wants to spur growth, the others just want sufficiency. Only one of these options makes good long term sense for Thailand as it will create vastly more economic activity which in turn will reduce the need for future agricultural subsidies.

Your argument falls down on the claim that rural based industries have to sell locally. They don't. Subsidies keep the poor poor. Without subsidies, there is far more incentive to seek employment elsewhere, replacing the imported workers.

BTW your claim for motivation of subsidies are laughable. PTP had no motivation to spur growth, they wanted to buy votes.

[Russbert]

Just now, halloween said:

Your argument falls down on the claim that rural based industries have to sell locally. They don't. Subsidies keep the poor poor. Without subsidies, there is far more incentive to seek employment elsewhere, replacing the imported workers.

BTW your claim for motivation of subsidies are laughable. PTP had no motivation to spur growth, they wanted to buy votes.

I hardly think the local som tum vendor is going to be taking to many orders from Paris or London. Name a single industry that hasnt been heavily subsidised during its developmental years. Tax breaks and tariff protection are forms of subsidy too. What industries can the north possibly compete with Bangkok for when all of the infrastructure is in and around Bangkok.

You think the solution for the underdevelopment of the north is for the 40% of the population that live in the north to move to Bangkok? Such foolishness would increase Thailands woes not mitigate them.

I think what you mean to say is that you are quite happy for those who voted PTP to starve rather than have a government that spends any money on trying to develop the north. 

 

 

[halloween]

1 minute ago, Russbert said:

I hardly think the local som tum vendor is going to be taking to many orders from Paris or London. Name a single industry that hasnt been heavily subsidised during its developmental years. Tax breaks and tariff protection are forms of subsidy too. What industries can the north possibly compete with Bangkok for when all of the infrastructure is in and around Bangkok.

You think the solution for the underdevelopment of the north is for the 40% of the population that live in the north to move to Bangkok? Such foolishness would increase Thailands woes not mitigate them.

I think what you mean to say is that you are quite happy for those who voted PTP to starve rather than have a government that spends any money on trying to develop the north. 

 

 

The local som tam vendor is not a developing industry; neither is rice farming. Low rents, cheaper labour, and twin track railways can make rural based industries quite viable TYVF.

But you hit the problem right on the head. 40% of the population are producing very little, and the money for development is being wasted propping up their life style. I am quite happy to support industry development, training programs, and research to improve productivity. I don't appreciate giving money to people so they can stay unproductive.

[Russbert]

3 minutes ago, halloween said:

The local som tam vendor is not a developing industry; neither is rice farming. Low rents, cheaper labour, and twin track railways can make rural based industries quite viable TYVF.

But you hit the problem right on the head. 40% of the population are producing very little, and the money for development is being wasted propping up their life style. I am quite happy to support industry development, training programs, and research to improve productivity. I don't appreciate giving money to people so they can stay unproductive.

 

How do you think the 40% got in the situation their in?