EDITORIAL: Our next green revolution?  
The Nation, 11 August 2005

The success of agricultural restructuring hinges on turning farmers into entrepreneurs. The government has come up with an interesting plan to overhaul the country's agricultural sector, beginning with six “economically-viable” products – rice, tapioca, rubber, biofuel plants, prawn and chicken. It is hoped that the comprehensive scheme, which involves restructuring of production, distribution and trade, will help poor farmers pull themselves out of the poverty trap.

According to Agriculture Minister Sudarat Keyuraphan, farmers will be given access to technology, know-how and credit that allow them to add value to their farm products by processing food while the government will provide further assistance in research and development as well as marketing finished products.

The goal is to enable farmers to make profits from their farming activities so that they could raise funds to upgrade their production and expand business.

The plan is designed specifically to help farmers extricate themselves from the vicious circle: ignorant farmers have no access to market information, lack the wherewithal to make a business plan, get stuck in outdated and low-productivity farming techniques, suffer losses, become indebted and remain trapped in poverty.

To prevent oversupply and price fluctuations, the government will make arrangements for barter trade in selected agricultural products – such as rice, prawn and chicken – with its trading partners while trying to expand to untapped markets.

The Agriculture Ministry will also prioritise the country's production in order to make better farming policy by categorising products into four types. “Cash cow'' refers to high-income products, such as rubber, rice, prawn, chicken and canned food. “Star” comprises products with great potential such as processed rubber and palm. “Baby” covers new products that need to be promoted, such as organic rice and rubber-wood. “Dog'' includes products that are considered uncompetitive, like longan, onions, garlic, beans and corn.

Within three years after the agricultural restructuring plan is introduced, the government says it would remove subsidies for all agricultural products.

All this is very well and good, at least on paper. But in reality any attempt to m make the agricultural sector more productive, profitable and competitive will be much more complicated.

The share of agriculture in Thailand 's GDP has dropped from about one-third in the 1970s to around 10 per cent today. The long-term decline of the agricultural sector signifies that demand for farm products has been slowing, while demand for manufactured goods and services has grown by leaps and bounds, due to rising incomes.

But the agricultural sector continues to be important because an estimated 50 to 60 per cent of the country's population of more than 64 million people, most of them farmers, still live in rural areas. However, due to migration of rural job-seekers into urban areas and to overseas job markets, the typical rural household now derives only one-third of its income from farming, with more income now coming from activities and remittances from relatives in urban areas and abroad.

One of the biggest problems facing Thai farmers is their lack of incentive to improve yields. Yields of main crops such as rice are among the lowest in the world. In 2003 rice yields averages per hectare were 3.3 tonnes in the Philippines , 4.63 tonnes in Vietnam and 6.3 tonnes for China , against a worldwide average of 3.9 tonnes. Thailand , a country with a long tradition of rice cultivation had a meagre 2.6 tonnes.

The country compensates for low yields in terms of a rice-growing area of 10 million hectares, which goes a long way towards explaining the country's fast-dwindling forests. Worse, Thai farmers have become dependent on excessive use of chemical pesticides and fertilisers, further raising costs and hastening environmental destruction.