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Published on November 15, 2007

Political parties campaigning for the December 23 general election should seriously rethink their agricultural policies. Instead of rehashing the old formulae that emphasise the use of subsidies to keep farmers happy, they should consider a more principled approach to ensure efforts to improve farmers' living standards actually work in a more sustainable manner. Measures should include an increase in government spending on research and development on quality of seeds, and enhancing potential for adding value to agricultural products.

Subsidies keep farmers dependent on government handouts, which keep them afloat from one crop season to the next without really improving their conditions. Nor do they provide farmers with incentives to improve their productivity. Instead, subsidies have kept farmers languishing in poverty. Failure by Thai farmers to improve their productivity, which is among the lowest of the world's major food exporters, means the competitiveness of Thailand's farm sector has continued to slip. The further Thai farmers' competitiveness falls, the more dependent they become on subsidies.

This explains why too many farmers in this country continue to be bogged down at the subsistence level. They continue to grow crops the way their ancestors did, giving little thought to the idea they have to try hard to keep production costs low while at the same time improving yields. They have become reliant on bail-outs every time they suffer losses when crop prices fall below the cost of production. Most farmers don't see that what they do is a business venture, from which they must make sufficient profit not only to get by, but prosper. While there are exceptional cases in which some really smart farmers, through self-improvement, have managed to break away from poverty and indebtedness to become enterprising entrepreneurs, people with such flair have, sadly, been too few and far between.

The problem with farm subsidies is that unprincipled politicians and political parties have used them to manipulate farmers to score easy political points, and to win elections.

Politicians also like agricultural subsidies for another reason: subsidy programmes usually involve the spending of huge amounts of taxpayers' money, which they and their cronies have the opportunity to plunder. Corruption is rife in farm subsidy programmes because of poor monitoring and lack of effective assessment.

Former prime minister Thaksin Shinawatra and his now-defunct Thai Rak Thai Party were among the worst abusers of farm subsidies, which were an integral part of their populist policies.

Those policies took the form of farm debt forgiveness that was poorly targeted, and market intervention exercises to shore up prices of crops. Tens of billions of baht in farm subsidies were spent each year during the more than five years the Thaksin government was in power. There was little to show in terms of concrete improvements in farmers' lives. Worse, many farmers have fallen into even deeper debt as a result of the previous government's policy to stimulate private consumption.

Responsible politicians and their parties must find ways to get Thailand out of this vicious circle, which is holding back the national development.But before subsidies can be cut, drastic reform has to take place. An important part of this reform will be a comprehensive programme to identify the poorest of the poor among farmers who, despite their own and everybody else's efforts to improve their situation, remain persistently and hopelessly in debt.

These people deserve all the help they can get from the government and indeed the rest of society through comprehensive community-based development projects that are well thought out. All projects designed to help the poorest farmers must address their problems in a holistic manner, including improvement in education, public health and skill training. And they must also be subjected to rigorous assessment to make sure only the people who most deserve help get what they need.

For this to happen, political parties contesting the election must come to an agreement on how they propose to solve farmers' long-standing problems. The government that will emerge from the upcoming poll must not lose any more time or resources on subsidy programmes that are wasteful and counterproductive.