Thailand's rice industry could lose not only competitiveness but also export share to rivals, plunging farmers into poverty, due to the inefficiency of policies for both production and marketing development, experts at the Thailand National Rice Research Conference said.
Academics and rice professionals shared the view yesterday that the country could lose its position as the world's largest rice exporter in the next 5-10 years due to lack of development of production and lack of efficiency of marketing operations.
Other rice-growing nations, in particular Vietnam, Burma, Cambodia and Laos, have rapidly developed their rice production and marketing. Thailand has had to contend with a lack of consistency in rice-trading management as well as intervention by politicians, as rice is a politically sensitive crop.
Other key challenges for the development of the Thai rice is the rising age of rice farmers; lack of research and development; insect outbreaks and the effect of chemicals and pesticides on the environment; climate change, which is causing water shortages; and the lack of development of irrigation systems.
To ensure competitiveness, Thailand must focus more on increasing production quality, reducing cost of production, as well as develop marketing and trading to be more systematic, said Somporn Isvilanonda, a senior fellow of the Knowledge Network Institute of Thailand (KNIT).
He said Thailand needed a central market for rice trading and a futures market to ensure free and fair prices. The government must also focus on increasing production capacity and reducing the cost of production for farmers instead of having a fixation with the rice price as a tool to gain popularity and satisfy farmers for the short term.
The KNIT study showed that Vietnam, the world's second-largest rice exporter, would succeed in achieving higher export growth as it had a clear policy on lowering cost of production and management of marketing systems. Other rice growers, including Cambodia and Burma, will also see their export shares grow due to lower cost of production and rich land resources.
The production cost for Thai rice is Bt4,575 per rai against just Bt2,464 per rai in Vietnam. Vietnam has Asean's highest average yield at 862.4 kilograms per rai, against a Thai yield of 448kg - the seventh highest in the region - and a global average of 680kg.
Vietnam has "three reduce and three increase polices": reduce the use of seeds, fertiliser and pesticides and increasing the production, quality, and profit, while Thailand has focused only on increasing the rice price for farmers.
Bas Bouman, head of the crop and environment science division at the International Rice Research Institute (IRRI), said the three main challenges for Thailand were loss of competitiveness to other Asean countries; the development of quality rice grains to maintain demand and battle infestation; and dealing with natural disasters and higher production costs.
"It will have tougher competition in rice trading from now on," said Bouman. "Burma has great potential to become one of the world's major rice exporters. Thailand needs to focus not only on developing quantity but also quality of rice grains to ensure competitiveness."
Rice Department director-general Prasert Gosalvitra said Thailand needed to increase development of irrigation systems in order to increase rice production and reduce the costs for farmers.
Eighty-two percent of Vietnam's rice plantations are served by irrigation systems, against only 24 per cent in Thailand.
Prasert added that each political party should also weigh their rice policy carefully.
