Despite government subsidies, Thai farmers are the poorest in Asia and Asean, with average losses of 2,000 baht per rai and higher debts over the last 10 years.
According to the latest study by the University of the Thai Chamber of Commerce (UTCC), over the past decade the government's efforts to intervene in the market to help Thai farmers have done little to raise their income.
On the contrary, Thai farmers have incurred additional debts, averaging between 100,000 and 300,000 baht per person. This was observed by comparing the income of Thai rice farmers with those of major rice-exporting countries such as India, Vietnam and Myanmar between 2012 and 2022, which found that Thai rice production, farmers' income and savings were lower than those of its competitors.
The production costs of Thai farmers in 2022 was 5,898.5 baht per rai, which increased by 2,058.8 baht per rai compared to 2012 when the production cost was 3,839.7 baht per rai.
At the same time, their income fell by 777.7 baht per rai. In 2022, Thai farmers earned 3,900.3 baht per rai, less than the 4,678.0 baht per rai they earned in 2012. Consequently, Thai farmers had a loss of 1,998.2 baht per rai in 2022, compared to a surplus of 838.3 baht per rai in 2012.
"Over the past decade, there have been some crucial points of concern. Firstly, the rice yield per rai in Thailand has been three times lower than that of Vietnam [Thailand's average yield being 450 kilogrammes per rai compared to Vietnam's over 1,000 kg per rai, or more than one tonne per rai]," said Aat Pisanwanich, director of the Center for International Trade Studies at the UTCC.
Additionally, he said most Thai farmers engage in rice cultivation as a part-time occupation, while their Vietnamese counterparts are professional rice farmers.
Furthermore, Thai farmers mainly focus on price and yield, paying little attention to reducing production costs.
In contrast, Vietnamese farmers emphasise the "3 Reductions, 3 Increases" approach to maximise their efficiency. The three reductions are reducing costs, reducing the use of chemical fertilisers and reducing pesticides, while the three increases are increasing productivity, increasing quality and increasing profit.
According to Mr Aat, Thai farmers used to pay off their debts by selling their own rice fields and then leasing them back to continue agricultural activities. However, the previous government's policies did not effectively address the debt problems faced by Thai farmers.
Moreover, Thai farmers have had to contend with water shortages and the effects of global warming. In comparison, Vietnam can grow rice three times a year, while Thailand can only manage one or two times. Additionally, Thailand allocates a smaller budget of only 200 million baht a year for rice research, while Vietnam splurges three billion baht a year. India, China and Japan spend more than US$1 billion a year on rice research.
Mr Aat said the market intervention policies have undermined Thai rice competitiveness and failed to effectively address the true problem of Thai rice. As a result, farmers' debts have increased, production costs have risen, and rice yield per area has decreased, leading to a decline in the selling price.
"Lessons learned from the past indicate that market intervention in rice is not a viable solution for rice development. Whether it be a rice income guarantee scheme, price insurance, or rice pledging programmes, over the past 10 years, it is evident that these policies have not added money to the pockets of farmers. On the contrary, farmers' income has decreased, and many have ended up in debt," Mr Aat said.
He also suggests that the incoming government must prioritise water management, since without sufficient water, agricultural activities and other agricultural products cannot thrive.
Mr Aat also recommends providing soft loans or financial support to individual farmers or farmer groups to dig reservoirs and prepare for future droughts. This issue needs to be addressed seriously by the government and relevant agencies as some provinces have already started facing drought problems despite being in the rainy season.