Reclaiming the pride of Thai rice

Once the world’s top rice exporter, Thailand has lost its edge. But there are still hopes for Thai farmers to regain and even level up their competitiveness in the global rice industry and above all improve farmers’ quality of life.

Until a decade ago, Thailand had been the world’s No.1 rice exporter for 30 years. Since 2011, however, other countries have overtaken Thailand’s market share in all types of rice grains. Vietnam, in particular, has become Thailand’s top competitor. The reason is simple; unlike Vietnam, Thailand could not offer what the market wanted at the right price.

The problems Thai farmers are facing are manifold and complex. The cost of investment is steadily rising while productivity remains low. Apart from the high costs of farm chemicals, farm owners face rising production costs; it is increasingly hard for them to hire cheap labour to do the hard work of harvesting on the farm. In terms of quality, while the Thai brand can retain its exotic image, the yield per rai has been stagnant, even declining, due to the lack of research and development to improve rice productivity and quality.

Thailand’s rice yields per rai have been lower than those of neighbouring countries and other rivals for several years now. Apparently, Thailand’s rice farming sector has been in stagnation.

That is a pity. The global demand for rice is rising, yet Thailand cannot tap the favourable tide.

The world’s population will reach 10 billion in 2052. Therefore, global agriculture must increase its food supply by 56% to feed everyone. As a rice-growing country, Thailand has plenty of opportunities ahead. Yet, its rice productivity is declining while its competitors are getting more robust with lower investment costs and better technologies.

An extra challenge comes from global warming and extreme weather patterns severely affecting the farming sector worldwide.

In the face of frequent droughts from global warming, rice farmers in Thailand need to shift to sustainable agriculture to reduce water usage. Also, the traditional way of growing rice in flooded paddies creates methane and aggravates global warming. Therefore, Thailand needs to find a more cost-effective, environmentally friendly way to grow rice.

Another big problem is the workforce. Rice farmers are now ageing. The hard work under the scorching sun with little return does not attract young people. Can Thailand’s rice industry grow when the number of rice farmers declines?

The challenge is clear: How to help farmers adjust, cut costs, and increase productivity from sustainable rice farming.

Research on “Future Scenarios for Small Thai Rice Farmers” just released in May this year by the Thailand Development Research Institute may provide some answers.

The research found that our government currently responds to farmers’ problems by shoring up prices and giving subsidies — a political move to appease the farmers/voters. But if these cash subsidies continue, farmers will refuse to improve their farming to become competitive. In addition, the heavy use of farm chemicals will hurt the environment, while low yields will affect the country’s food security.

So, the research concludes that the government’s uniform policies that apply to all farmers across the board do not and will not work. Farmers are not a homogenous population. Their locations and needs vary. The government must issue proactive policies to address different challenges.

Instead of making farmers reliant on financial aid, the government should facilitate small farmers’ operations and access to credit. Instead of top-down measures, the authorities should support farmers’ initiatives and cooperation with businesses, academia, and civil society.

As part of policy recommendations, TDRI research presents scenarios for four groups of farmers. They are: mobile-phone farmers, hi-tech large-scale farmers, self-reliant small-scale farmers and professional farmers who collaborate with other sectors to produce different rice products.

The majority of farmers in Thailand are the so-called “mobile-phone farmers”. Mostly ageing and having no family help, these traditional farmers hire wage earners to do rice farming, monitoring the work with mobile phones. Each works separately, relying on old farming methods and state subsidies to survive. The government should help this group of farmers form small businesses or provide them with support and opportunities to become hi-tech or professional farmers.

The second scenario involves “hi-tech large-scale farmers” with access to credit and technology to cut investment costs and increase productivity. There are few of them in Thailand, however. To increase their number, the government must cut the red tape that prevents low- and middle-income farmers from expanding their farmlands and acquiring modern technologies. Most hi-tech farmers grew their farmland by renting from others. To give them land security, the government should reduce interest on loans so they can buy land themselves.

The third is the “self-reliant small-scale farmers” who often conduct business under community enterprises. Members of the group get organised to sell high-grade products such as organic rice, rice oil, Japanese rice, and rice-based cosmetics. Their production capacity and markets, however, are limited. To help their businesses grow, the government should support them with credit and technology so they can cut costs, expand markets, and meet demands better.

The last scenario involves professional farmers who have alliances with other sectors to produce premium and environmentally friendly products. The government should strive for this goal, according to the research.

The government should help farmers become professionals by connecting them with rice millers, exporters, and experts on rice variety development and “green” rice products. The aim is to help them increase productivity and produce high-grade, “green” rice-based products. Their income might not be as high as hi-tech farmers, but their occupation will be more secure and sustainable.

With state assistance, the third group — self-reliant small-scale farmers attached to community-based enterprises — can become professional farmers. The government must provide them with technology to produce “green” rice cost-effectively. Investment in rice research and development is also crucial to modernise rice farming for the more efficient use of water, energy, and environmentally friendly fertilisers. Equally important is market research for farm products.

The government should also revamp the subsidy policy and goals for more flexibility. Instead of following state mandates, farmers should be able to use the funds to get the specific knowledge and training they need, which vary in different communities. They should be able to decide to invest in farm technology for more efficiency. Also, they should have easy access to expert advice through online services and face-to-face consultations.

However, this shift from mass to niche markets will be successful only when farmers have strong allies in other sectors. The government must forego its top-down approach to adopt a more proactive policy by connecting the farmers with other sectors. In the “Four Allies Strategy”, business will help the farmers with business initiatives and marketing. Academia and civil society will help with coordination, technology and innovations. The government, meanwhile, will assist with partial funding.

The government, however, must go beyond farming efficiency, productivity, and marketing. The challenge is to improve the farmers’ quality of life and the environment.

Although the majority of the workforce is in farming, the agricultural sector contributes only 8-9% of gross domestic product (GDP). As part of economic restructuring, the government and politicians must create more jobs to give people more options in life.

The rural workforce should receive training for new job skills to work outside the agricultural sector to earn more income. Preferably, these jobs should be near their communities. People should be able to choose where to work and live, not be forced to migrate to big cities to work.

Decentralisation is the key. Only when local communities can manage their resources, finances, administration, and community development, will the aid serve the farmers better. With innovations and better returns, rice farming will be a chosen profession, not a family tradition. Thailand may not be a top rice exporter in the mass rice market as before, but Thai farmers will have a better quality of life. The environment will also improve with “green” rice farming. That is the legacy of Thai rice that the country should be proud of.

Article by Nipon Poapongsakorn, PhD. and Chawalrath Buranakij

First Published: Bangkok Post on September 14, 2022

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