Farming sector 'must be improved'

Achara Pongvutitham

Achara Deboonme

The Nation

The government should consider major infrastructure projects for farms to boost crops and turn Thailand into a food production hub, experts suggested.

In a roundtable discussion entitled "World's food crisis: A challenge for Thailand" organised by Krungthep Turakij last week, participants shared the opinion that the government should not focus only on mass-transit projects.

Cabinet last week approved projects worth around Bt10 billion to solve problems facing the rice sector over the next decade, but much more funds would be used for urban and suburban transport schemes.

For example, Purple and Green Line train projects would cost a combined Bt70 billion.

For the farm sector, the government should concentrate on improving productivity and irrigation infrastructure, among others, while ensuring price stability and state cooperation with other major export countries.

Niphond Wongtra-ngarn, a committee member of National Economic and Social Advisory Council, said the government should push for the set-up of an Organisation of Rice Exporting Countries, which includes Thailand, Vietnam and India.

To reduce farmers' risk, the government should also set up a floor price for paddy at around Bt10,000 per tonne so that farmers are guaranteed a fair price.

The government should also improve the management of water resources for farming since rice production needs lots of water.

Yuthasak Supasorn, president of National Food Institute of Thailand, said public policies on rice should help ensure that farmers gain from the price up-trend so that the wealth effects will lead to higher purchasing power.

Montri Congtrakultien, CEO and president of Charoen Pokphand Group's Crop Integration Business Group, said farm productivity will increase if irrigation is better and covers more areas.

In addition, new farm technology and use of hybrid rice seeds instead of grain collected after the harvest will improve output per rai.

CP earlier suggested that the government invest Bt200 billion in a large-scale integrated farm irrigation system.

But economist Ammar Siamwalla warned that the ongoing up-trend of rice prices may not be sustainable.

It won't make sense for the government to commit to a big investment programme under the current circumstance," said Ammar, honorary adviser to the Thailand Research Development Institute (TDRI).

Ammar said the up-trend is driven by panic buying and speculation, so prices could drop as happened after the 1970s oil crisis if output from the next annual crop increases and weather condition in other rice-growing countries return to normal.

He also said the government should introduce an export tax on rice shipments so that it could help manage a more reasonable price for domestic rice consumers.

Such a tax, also called an export premium, will however restrict farmers' profits.