Although crop prices look set to increase gradually next year, planning for agricultural sustainability will be crucial, as many new challenges will affect production and competitiveness.
Climate change, natural disasters, plant epidemics and liberalisation under the Asean Free Trade Agreement could all affect Thailand's farm output and trading competency.
The Office of Agricultural Economics predicts prices of major crops will increase considerably next year, by 10-20 per cent.
The effects of climate change, not to mention possible natural disasters, could reduce production and increase demand, thus driving up crop prices. Rising concerns about food security and increased demand for fuel crops in world markets to compensate for oil-price hikes will also hike prices.
Thailand has long prided itself on being an agricultural supplier to the world, but local farmers have always been counted among the poorest in the Kingdom, the result of a lack of a long-term plan for agricultural development.
Politicians have always looked to the farm sector for support, since there are more workers in it than in any other. Last year, more than 39 per cent of labourers worked in the farm sector, followed by 31.3 per cent in services, 15.3 per cent in retail and 14.5 per cent in industrial enterprises.
Thai governments have paid a great deal of attention to the farm sector, mainly by setting up pledging schemes to guarantee farmers' incomes, because the sector is a populist base. But this is a short-term measure. The few attempts there have been to create sustainable measures for sector development have not been efficient enough to boost the competitiveness of local crops.
Thailand is the world's 13th-largest food supplier, with its exports accounting for 2.4 per cent of the value of the world's food trade. However, Thailand's export growth in farm and other food products has shown only slight growth, a smaller percentage than its export rivals have enjoyed.
The "Global Trade Atlas" in July said exports of Thai foods increased only 16.1 per cent last year, while other countries enjoyed larger growth. Food exports grew 21.8 per cent in Vietnam, 22.4 per cent in Malaysia, 23.1 per cent in India, 20.6 per cent in Argentina, 22 per cent in Brazil and 29.1 per cent in Indonesia.
Exports grew in those countries largely because of clear government policies of promoting the food industry. For instance, Malaysia heavily promotes halal food exports, while Indonesia focuses on fishery products.
Fortunately, Thailand has a variety of crops and a strong food-industry chain, as well as sufficient food for domestic consumption. However, individual farmers have never developed their full potential, as most of the money in the farm sector falls into traders' hands rather than farmers'.
"Next year will be another great year for Thai farm exports, but traders may reap the full benefit rather than farmers," said Internal Trade Department director-general Chutima Bunyapraphasara.
The resources are there, but farmers need a better education and a knowledge of systematic management to benefit more from farming and trading, she said.
The government has been slow to provide farmers with basic infrastructure like irrigation to help them sustain their land productively in the long run. Farmers have also not been able to use available resources fully to provide the best yields.
For example, Laddawan Kunnoot, director of the Rice Department's Bureau of Rice Products Development, pointed out the average yield per rai for Thai rice was only 465 kilograms, while for competitors like Vietnam, India and China it was 600-700kg. This is because only 30 per cent of Thai rice is grown in irrigated areas.
Vietnam's higher production per yield results from 82 per cent of its rice being irrigated.
Some crops, such as rice, cassava and maize, are often not compatible with the local environment. Traders have called for the government to introduce zoning for crops, in order to ensure appropriate farming methods that fit local environmental conditions.
Additionally, as global demand shifts towards higher sanitary standards and chemical-free products, the government should clearly promote farming that meets this demand.
Major crops
Thai crop prices are expected to be influenced by global demand next year.
Rice
The price of white paddy rice could rise on higher demand and lower supply.
The US Agriculture Department said global output should decrease from 445.67 million tonnes this year to 433.65 million tonnes, while demand would increase from 435.33 million tonnes to 438.46 million tonnes. Accumulated world stockpiles will drop from 90.71 million tonnes to 85.9 million tonnes.
In Thailand, the price peaked at Bt10,914 a tonne in 2008 before sliding to Bt9,693 this year. Thailand's main-crop output next year is forecast to decrease by 0.51 per cent to 31.48 million tonnes. The plantation area will fall by 0.68 per cent to 69.34 million rai due to some farmers having shifted to other crops, notably rubber, sugar cane and palm.
Cassava
Thailand's cassava output is expected to drop by 14.13 per cent from 27 million tonnes to 25.03 million tonnes next year, due mainly to the spread of insect infestations.
Prices could be propped up on demand for cassava for biofuel production. Traders said the price could exceed Bt2 a kilogram.
Maize
The maize price is expected to increase slightly or remain unchanged next year. It is currently Bt5.78 per kilogram.
World output is expected to increase by 0.16 per cent to 792.55 million tonnes, while demand should rise 5.09 per cent to 84.79 million tonnes, mainly for livestock feed and biofuel production. Thai output is forecast to grow by 4.69 per cent to 4.44 million tonnes.
Sugar cane
The price of sugar cane will increase considerably next year, due to a continued global shortage. Thai Sugar Millers Corp expects the price of sugar will peak at Bt1,150 this year.
Higher prices will increase Thailand's plantation area from 6 million rai to 6.3 million rai next year. Sugar output will increase from 71.1 million tonnes to 76 million tonnes.
Oil palm
The price of oil palm is expected to increase to above Bt3.60 a kilogram next year, from an average of Bt3.59 this year. Thai palm production is forecast to grow by 21.84 per cent to 10.49 million tonnes next year, due to higher demand for biofuel crops.
