Hard days ahead for rice

Hard days ahead for rice

Thailand is among the world's largest rice exporters. For many years, the country held the global crown for rice exports except last year when it was beaten by India.

Thai fragrant rice, Hom Mali, is well recognised in the world market as a premium quality rice and and commands premium prices in the world rice market.

With this premise, Thai rice farmers should have moved out of poverty and be enjoying better livelihoods by now.

Unfortunately, the opposite is the case. Most rice farmers are among the poorest in the country's farm sector.

This is paradoxical given Thai consumers pay high prices for white rice in the market, while farmers still have to sell paddy at low prices. There must be something wrong.

Last year, Thai rice exports dropped drastically to 7.58 million tonnes, the worst in six years. Vietnam was neck-and-neck with Thailand at 6.37 million tonnes and India's rice exports came in at 9.77 million tonnes.

This year is another challenging year for Thai rice and farmers, as the country's farm sector has struggled with a severe drought and impacts of the economic downturn.

Rice exports from Thailand are expected to drop to 7.5 million tonnes this year, the lowest volume in seven years. More importantly, the worst drought in 40 years has resulted in a substantial decrease of about 1.5-2 million tonnes of milled off-season rice, according to the Thai Rice Exporters Association.

Without question, difficult times lie ahead.

Last week, Prime Minister Prayut Chan-o-cha met rice farmer leaders to mark Rice and Farmers Day 2020. The premier told farmers he well understood the hardship of farmers who are forced to sell their paddy at low prices.

He said the government is considering a measure to register rice mills where farmers would be urged to sell paddy only to those registered millers.

The details remain unclear. Currently, rice mills have had to register their business with the Commerce Ministry. Still, the prime minister has a point. It is known that millers and middlemen have taken advantage of farmers for a long time but this problem remains unsolved.

Rice farmers should have more influence over their selling prices, compared to the millers or middlemen who force farmers to sell below the proper rate.

Other problems have hurt rice farmers over the years, if not decades. Thailand has about eight million farmer households and half are rice growers. Rice plantations in the country cover around 60 million rai.

Unfortunately, rice yields are low. For example, the yield of the average rice crop in Thailand is about 450 kilogrammes per rai, while in Vietnam, the average yield per rai can be as high as 800-1,000 kg/rai.

Production costs are another problem. They are high due to several factors. One study indicated rice production costs in Vietnam are up to 50% lower than Thailand. As a result, after middlemen and millers take their cut, the prices that farmers get for their rice is lower than the cost of production. This is one reason farmer debts have skyrocketed.

These factors have bedevilled the industry for half a century without effective solutions. Governments, including the current one, must call on rice farmers to accept the market mechanism instead of demanding subsidies, but they have also failed to solve these fundamental problems to help farmers make a decent living and which in effect have chained farmers to poverty.

Editorial

Bangkok Post editorial column

These editorials represent Bangkok Post thoughts about current issues and situations.

Email : anchaleek@bangkokpost.co.th

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