News analysis

Profits dry up for Thai rice farmers

A withered rice field in Ayutthaya province's Pho Thong district. Even a substandard yield can ruin rice farmers, what more a crop failure.
Farmer Pratum Ampan ST PHOTO: NIRMAL GHOSH
A withered rice field in Ayutthaya province's Pho Thong district. Even a substandard yield can ruin rice farmers, what more a crop failure.
A withered rice field in Ayutthaya province's Pho Thong district. Even a substandard yield can ruin rice farmers, what more a crop failure.ST PHOTO: NIRMAL GHOSH

Severe drought could leave millions of Thai farmers destitute, deepening rural poverty

Thailand's unusually long drought will have little effect on the global price of rice, but could leave millions of Thai farmers on the edge of destitution, with the government's US$1.8 billion (S$2.5 billion) relief measures offering only temporary relief to deepening rural poverty.

While monsoon rains have finally started to spread across the country, several areas are still very short of the quantities of water required for a rice crop. For many farmers, the rains have come too late. The damage is done. An early government estimate forecast rice production falling by 2 million tonnes. The Thai Rice Exporters Association earlier this month said production would fall between 2 million tonnes and 3 million tonnes - around 15 per cent to 20 per cent of normal production.

Exports would reach 9.5 million tonnes - half a million tonne less than a previous forecast of 10 million tonnes, the association said. Thailand exported 10.8 million tonnes of rice last year.

Even so, globally, rice supplies may be slightly up over last year, the United Nations' Food and Agriculture Organisation (FAO) said. In an evaluation on July 8, the FAO acknowledged that "Asia's three major rice exporting countries, Thailand, India and Vietnam, are already stressed by a lack of precipitation". But global paddy production this year was forecast to recover slightly from last year, mostly on the back of increased production in China and Indonesia, the FAO said.

That is cold comfort to farmers like Mr Pratum Ampan, 67, who is spending 200 baht (S$8) a day more than he normally would, to buy fuel to run the pumps that ensure there is enough water in his rice fields. On a hot and rainless Wednesday last week, Mr Pratum squatted on an embankment watching two pumps going in his fields in Ayutthaya province's Pho Thong district, around 90km north of Bangkok. One small pump sucked water out of a ditch with just a few inches of water in it.

DIRE STRAITS

"This is the worst I have seen in over 30 years. There is going to be no profit at all. It is all going to go into keeping this crop alive."

FARMER PRATUM AMPAN, who is spending 200 baht (S$8) a day more than he normally would, to buy fuel to run the pumps that ensure there is enough water in his rice fields

Normally, at this time of year, it would be full of monsoon rain water. The second, bigger pump, was drawing water from a well.

But both combined were only just enough to keep his rice crop alive. If the water level is too low, weeds proliferate and compete with the rice, Mr Pratum said.

"We have had to improvise any way we can," he said. "Normally, my yield would be 700-800kg per rai (0.16ha) but this year, it will be down to 500-600kg.

"This is the worst I have seen in over 30 years. There is going to be no profit at all. It is all going to go into keeping this crop alive."

The government earlier this year had warned of a prolonged drought, and urged farmers to delay the planting until August, soon after the start of the wet season. But many, like Mr Pratum, planted anyway. "The government said don't plant yet. But what else are we supposed to do?" he said.

Crop failure is one thing; even a substandard yield can ruin farmers. "It has been one thing after another for the agriculture sector. First, weak commodity prices, and now the drought," said former finance minister Korn Chatikavanij.

An estimated four million households in Thailand depend on rice cultivation. Roughly one million of those are in the central plains. Many are large farms with irrigated land. But even irrigated land is suffering. In rice fields visited by The Straits Times in Ayutthaya province, the farther they are from the Chao Phraya river, which snakes through the area, the less water they have - because the level of the river has been low.

Elsewhere, especially in the north-east and the north, small-scale farmers with no access to irrigation are often in debt even at the best of times.

The Organisation for Economic Cooperation and Development said in a report last year that in 2011, smallholders owed an average of 105,000 baht - equivalent to five months of their monthly income.

Indebted smallholders will suffer the most, said Mr Korn who has been researching the economics of poorer agricultural communities. "They will be destitute. The relief they will get from the government will be marginal," he warned.

A version of this article appeared in the print edition of The Straits Times on July 28, 2015, with the headline 'Profits dry up for Thai rice farmers'. Print Edition | Subscribe