Soaring rice price brings hope to Thai farmers trapped between debt and drought


As global rice supplies tighten following India's export ban, farmers in rice-producing Thailand are rushing to increase production of the crop to take advantage of the global price hike.

Working swiftly on a hot August day, farmers in Chai Nat some 200 km (124 miles) north of Bangkok burn the fields from a previous harvest to prepare for the next.

In normal times, there are two main rice planting seasons within a year, and in the middle of the year, farmers refrain from planting to conserve water. However, this year, Sripai Kaeo-eam has managed to squeeze in a third planting cycle in order to increase her rice production.

"Right now, I've been dreaming of getting 10,000 to 20,000 baht ($281 - $563) per tonne,” said Sripai, a farmer in central Chai Nat province, pointing to her green paddy seedlings only a few inches tall.

"That's why we have to hurry. We (farmers) are barely looking at each other as we've all been busy," she added.

The Food and Agriculture Organization of the United Nations rice price index saw a 9.8% increase in August 2023, deemed a gold rush for farmers in Thailand, the second-largest rice exporter globally.

However, rainfall, which rice farmers are highly dependent on, has fallen short by 18% this year, compared to usual levels due to the impact of the El Niño weather pattern.

Additionally, vital reservoirs are currently at only 54% of their total capacity, according to Thailand's Office of The National Water Resources.

This includes the Chao Phraya River, which winds its way through the core of Bangkok. The dam monitoring for this river reveals a critically low water level.

Sripai Kaeo-eam, 58, a farmer who is struggling to repaying her loans, poses in front of her rice field during an interview with Reuters in Chainat province, Thailand, August 30, 2023. REUTERS/Athit Perawongmetha

Born into a family of rice farmers in Chai Nat, where she has spent her whole life, Sripai told Reuters she has never witnessed a dry spell like this.

A Thai government advisory has recommended limiting additional rice cultivation this year to preserve water resources. But Sripai and other farmers have good reason not to pay heed.

Thailand is grappling with one of the most substantial levels of household debt in Asia. According to the latest available government data from 2021, a staggering 66.7% of agricultural households were burdened with debt, primarily stemming from activities related to farming.

Climate-related disasters such as floods, droughts, and pest infestations have collectively exacerbated the financial liabilities of farmers, impacting not just Sripai but many others as well.

Even before the new government took office, Sripai and other farmers from the region — all laden with farming debts — made repeated trips to the capital, Bangkok, to lobby the Agriculture Ministry.

Given their financial struggles, farmers are sometimes driven to employ cheaper, unlawful practices like open burning in place of hiring labourers for leaf cutting and gathering, as a means to quicken production.

The main cause of the farmers’ debt, according to agricultural expert Nipon Poapongsakorn, is policy failure.

While debt freezes rolled out by the government to relieve financial pressure on farmers appear promising at first glance, their debt burdens get compounded when planting season arrives and farmers turn to the Bank of Agriculture and Agricultural Cooperatives to secure loans, said the expert from the Thailand Development Research Institute.

Nipon added that investment in rice research dropped from 300 million baht ($8.4 million) a decade ago to 120 million baht ($3.4 million) this year.

Conversely, nations such as India and Vietnam have made substantial investments in rice research and infrastructure, propelling them ahead of the Southeast Asian nations in terms of productivity and bolstering their presence in the global export market, noted Nipon.

Farmers harvest rice in a field in Chainat province, Thailand, August 31, 2023. REUTERS/Athit Perawongmetha

In 2018, according to data provided by Nipon, Thai farmers produced 485 kg (1,068 lbs) of rice per rai (1,600 square metres or 0.395 acres), compared to 752 kg (1,658 lbs) and 560 kg (1,235 lbs) in Bangladesh and Nepal respectively.

As a result, the average Thai farmer's income has dwindled despite government measures.

Thailand's newly appointed Prime Minister, Srettha Thavisin, has pledged that the government will boost agricultural income through innovation.

The administration has also said it plans to streamline water management resources, implement precision farming techniques to improve yields, explore new markets for agricultural products, and address the rising public debt.

Meanwhile, for Sripai, who has toiled her entire life on the paddy fields, the current price situation offers a chance to change her fortunes.

Sitting in front of a ramshackle building where she lives, Sripai said: “Now that the rice price is good, it gives us hope, hope that we can clear our debts. And maybe even improve our quality of life.”