Thai Rice Millers and Exporters who Benefit, not Farmers
Thai Rice farmers aren’t seeing all the gains as a result of the shortage of rice in Thailand, and the record high prices. The cost of growing rice has also risen exponentially in the last year. Seed prices, land rental and fertilizer have all increased in cost over the last few months. Seed prices are double what they were last year. Land rental has quadrupled in the same amount of time. In the past, farmers paid 500 baht per rai for an entire year. Now they are paying 700 baht for just three months. The cost of fertilizer has doubled also in the last year to 20,000 baht per ton.
About 70% of Thai farmers must rent land on which to farm. They also must borrow money to buy fertilizer and seed, often resulting in debt problems due to poor harvests. Many farmers have already had to sell their land because of debt. Prasit Boonchuey, president of the Thai Farmers Association, says the cost of growing rice amounts to 5,720 baht per rai, as compared to about 4,000 baht before prices started to rise rapidly. “We have made some gains from the current prices of rice but they will be used for debt repayment. It’s not enough to make farmers rich,” according to Mr Prasit. “The current Thai rice price is only enough for farmers to service all debt and get their rented land back. That would be just great for them at the moment. Even with the higher cost of living, those coming to town (and leaving farming for city jobs) know exactly how much they will get per month. They are able to calculate the amount they should spend if they want to have savings. Meanwhile, farmers cannot predict how much they will get because they are lots of uncontrollable factors. It is very risky job.”
It is Thai rice millers and exporters who benefit the most from higher prices according to Apichart Jongsakul, secretary-general of the Office of Agricultural Economics says “We expect the Thai millers will enjoy higher incomes up to 60-70%, more than last year, from impressive rice prices, with exporters to see higher incomes of 20% and farmers about 30%. The income structure is expected to move like this if Thai rice prices keep moving up further.” Packaged, milled, rice usually nets exporters about $50 a ton. Rising prices may see that amount double.
Price of Rice Still Making Headlines, Rice Millers and Exporters who Benefit, not Farmers
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