The agricultural sector, particularly the rice segment, is in critical need of a structural overhaul, analysts told a seminar hosted by the Thailand Development Research Institute (TDRI).
It should apply more technology to boost productivity while in the long run scrapping the capital-intensive rice pledging scheme that could leave huge debts.
“In a move to raise farmers’ sustainable income, more technology and machinery need to be applied, while certain workers should be encouraged to work outside the sector,” said Nipon Poapongsakorn, a distinguished fellow at the TDRI.
Dr Nipon also reiterated the TDRI’s concerns about the government’s rice pledging scheme, which is intended to raise farmers’ incomes, saying it will eventually affect investment in development of rice varieties.
Farmers will no longer pay attention to high-quality varieties, as the scheme will encourage them to grow only rice of short duration and low quality in order to increase production, he said.
The TDRI’s rice expert said the world’s rice consumption over the next 10 years is expected to drop as rice consumers, mostly in Asia, shift to consume more meat, vegetables, fruit and wheat due to growing affluence levels.
Several rice-importing countries are using a policy of self-sufficiency through beefed-up investment in research and development on rice varieties.
“Political pressure on rice pledging is expected to mount, as Thailand is unlikely to tolerate a loss of 100 billion baht a year caused by the scheme,” Dr Nipon said.
“In the long term, the rice pledging scheme will eventually lead the country into a debt crisis and hinder Thailand’s competitiveness, as the massive spending on the scheme will tie up the country’s ability to spend or borrow more for infrastructure development.”
Ammar Siamwalla, an honorary economist at the TDRI, said the government is highly unlikely to sell its rice stocks at decent prices, given the hefty above-market pledged prices.
“After one year, it has already been proved that the government’s attempt to draw the rice supply in the hope of pushing up prices to US$800 a tonne has not been achieved, as higher rice prices prompt buying countries to raise their rice production,” he said.
“Former prime minister Thaksin Shinawatra should rather use his own money to stockpile rice and speculate in the rice market, not the taxpayers’ money which is from the entire country, for rice price speculation.”
Mr Ammar urged the governmnet to gradually abolish the pledging programme.
Pichit Keatsomporn, the president of a community rice centre in Suphan Buri province, said it is great and profitable that farmers can sell their paddy at 14,000 to 15,000 baht a tonne.
But he said most farmers are using more chemicals to accelerate their production and grow more varieties that take only 90 days to harvest instead of 120 days.
“This brings about rising production costs, be it for fertiliser or chemicals,” said Mr Pichit.
“The government had better provide farmers with the right directives about how to cut production costs. Farmers generally don’t care about fiscal debt as they see it as the government’s burden.”
Phumisak Rasri, director of the Office of Agricultural Economics’ Agricultural Economic Operation Centre, said the government’s policy needs a change to give direct assistance to farmers through subsidies on raw materials such as fertiliser and insecticide.
Meanwhile, the Thai Rice Exporters Association yesterday said its move to buy Hom Mali rice from the government without bidding was based on an agreement made earlier with the Commerce Ministry.
ตีพิมพ์ครั้งแรกในหนังสือพิมพ์ Bangkok Post, 1 พฤศจิกายน 2555, Farms ‘need big shake-up’