Govt subsidies do long-term damage to thai farmers

The government’s policy of pledging to buy rice from farmers has resulted in a lower quality of Thai rice. The government’s subsidy scheme, which purchases white rice at Bt15,000 per tonne, has encouraged farmers to push for quantity of production while ignoring the quality.
If this trend continues, Thai rice may lose its competitive edge and its long-established image of being premium quality.
The government has spent Bt100 billion on purchasing the last main crop in November. It plans to spend another Bt120 billion for the second crop, which will be harvested in March. This fulfils promises it made to farmers during the election campaign last July.
The subsidy plan may benefit some farmers in the short term. But in the longer run, it will reduce the overall quality of Thai rice because farmers will now focus on producing greater quantities at the expense of the quality of their produce.
The massive flood disaster last year has made the situation worse. Approximately 10 million rai of rice fields have been damaged. When the water subsided, farmers wanted to sow rice seeds immediately. But many opted for low-quality seeds because they could not source a sufficient amount of certified-quality seeds. The quality of rice grown from these low-standard seeds will certainly be lower.
According to figures from the Agriculture Ministry, rice plantation increased from 57 million rai in the 2010-2011 crop season to 61.94 million rai during the 2011-2012 season. However, the efficiency of our rice production methods and the quality of Thai rice has not improved in conjunction with the rise in the area under cultivation. The average yield per rai for the current crop season has dropped to 394 kilogrammes per rai, compared to 397 kilogrammes per rai during the previous season.
The government’s rice pledging programme is meant to increase the earning potential for farmers, but it does nothing to assist farmers in developing long-term sustainable methods, efficiency and productivity. The upshot of this short-sighted subsidy policy is that many farmers are likely to end up more dependent on the government’s support. The opposite should be happening: Thailand should be educating farmers on sustainable methods that lead to greater productivity and long-term security. Our farmers should be given the tools to be able to improve their well-being on their own.
But this will never happen if farmers aim for low quality production that earns government handouts. Many farmers have already shifted to short-grain rice, which takes only 90 days to harvest, compared to the high-quality, long-grain rice, which takes 120 days to harvest.
These farmers simply aim for higher volume to secure more fast cash. The government accepts the rice, no matter what the quality. Therefore, farmers try to cut production costs to increase the profit margin. In addition, some farmers use excessive amounts of chemical fertilisers because they wrongly believe that this will speed up the harvesting process. The government’s scheme is caught in a downward spiral that will only work to the long-term detriment of Thai rice.
Although the government may accept this rice, exporters will find it difficult to export it because of its low quality, which is no better than the average rice available from neighbouring countries such as Vietnam. Yet, Thai rice is now more expensive than that of our competitors because the subsidy programme has pushed up the cost of production. Eventually, the government will have to use state money to subsidise this low-quality rice on the world market.
Instead of making farmers even more dependent on subsidies and handouts, the government should be educating them to be more self-reliant, and encouraging them to produce higher quality rice and high-end products such as organic rice.
Thai farmers need to improve their knowledge to stay competitive, especially with the advent of the Asean Economic Community in a few years time. If this situation is not rectified now, Thai farmers may be unable to compete with the fiercer competition from neighbours like Burma and Vietnam, where yields and productivity are already higher than in Thailand.