AS A LONG-TERM solution to the recurring problem of fluctuating rice prices, Thailand should reduce its total rice-production area rather than subsidising prices every year, a group of academics say.
They agreed that government measures to help farmers by a rice-pledging scheme or price subsidy would not solve the problem at its root.
They urged the government to focus on long- term solutions to ensure that farmers will be guaranteed enough profit.
Viroj na Ranong, a senior research specialist with the Thailand Development Research Institute, said the government should decrease the rice-growing area, because the unstable price was often caused by the very high supply of rice into the market.
“I can see the effort by the government to decrease rice production by encouraging farmers to switch to other crops such as sugar cane or maize, but this is not a good answer, because these crops also have a low prices,” Viroj said.
“What we should do is let the farmers do other jobs instead, because right now there are too many farmers and too much rice production in the country. If the profit from rice is not enough to live on, the farmers should find other jobs.”
Decharut Sukkumnoed, a professor at Kasetsart University’s faculty of economics, agreed that the rice-production area should be reduced, but unlike Viroj, he suggested that farmers allocate some of their land to grow other crops.
“I’d like to invite the farmers not to use all of their land to grow rice but instead spare some of it for other crops, or raise animals, or dig a pond for water retention. They can also grow fruit trees or trees for logging to earn profit in the future,” Decharut said.
He said this would allow farmers to stay in their jobs and they would have more financial stability than from solely relying on rice.
He urged the government to ensure that farmers have more power to bargain in the market if they have to plant new types of crop, or they will face the price problem again.
Viroj said the government should come up with a price guarantee for farmers to let them know how much they can gain from their hard labour, and this would help them decide whether to grow rice.
“I don’t see that financial subsidies will help the farmers. If we pour money in to make rice prices high, more people will see this as an opportunity to grow more rice, and in the end more rice producers will enter the market and drive the price back down,” he said.
Meanwhile, Anusorn Tamajai, faculty of economics dean at Rangsit University, suggested that to address the problem in the long term, the government should introduce a futures-market system and price-insurance system to ensure that the price will be on an acceptable level for all stakeholders.
“We should encourage the farmers to make more profit from rice cultivation by reducing costs, increasing yield, or giving special welfare to farmers. We may also encourage the farmers to increase the value of their products, so they can get more income from their hard work,” Anusorn said.
“I still believe that short-term measures like the rice-pledging scheme are important, but we should gradually reduce this financial help and at the same time empower farmers.”