Distorted prices and neglect of small farmers could cost the Kingdom its spot as top exporter of the fragrant rice strain
Thailand’s jasmine strain of fragrant rice has been a source of national pride for decades. Thais are proud that their country has become synonymous with the pleasant aroma and smooth taste of this indigenous rice.
However, the international reputation of jasmine rice could soon lose its association with Thailand. Thailand was once the biggest exporter of fragrant rice, but other countries such as Vietnam are fast catching up. It is not unthinkable that the Kingdom may lose its spot as the world biggest exporter of jasmine rice – and soon.
Of course, this is due to a combination of factors including the rice-mortgage programme, which has pushed prices to a non-competitive level.
The Yingluck government has tried to defend its policy by saying that the government wanted to promote the quality of the rice production, not the quantity. But if Thailand loses its markets, this will make little difference. And worst of all, despite the massive budget spent, Thai farmers’ quality of living has not improved.
In recent years, Vietnam, Laos, Myanmar and even China have emerged as serious competitors in terms of jasmine rice exports.
Thai jasmine rice has found markets overseas, such as the ethnic-Asian market in the US, where “Thai Hom Mali” rice has become synonymous with Thai cuisine. But the high price has made Thai rice less competitive. Other countries also compete in terms of quality.
Over the past 10 years, the Thai share of the jasmine rice market, once as high as 80-90 per cent, has been halved. Vietnam, meanwhile, has seen its market share increase. Vietnam’s share of Hong Kong’s jasmine rice market rose to 30 per cent after just two years of exports to the territory.
Thailand must improve its production and market structures. Thai jasmine rice
production still has room to grow. But farmers do not have any incentive to grow the crop. Currently, the agricultural area in Thailand amounts to 130 million rai, with 55-60 million rai under rice plantation.
Rice production has been decreasing every year because farmers have shifted to energy crops, which yield more profit. In spite of the government’s rice-subsidy programme, a majority of farmers do not benefit from the programme because the rice quality does not meet the government’s requirements. Many farmers in the Northeast have shifted to rubber. In addition, half of the rice plantation area is now used to grow sticky rice.
The Thai agricultural sector is household-based and centred on micro-farming. On average, farmers cultivate no more than 20 rai. And farmers tend to work individually. The Agriculture and Agricultural Cooperatives Ministry concentrated on farming, and did not pay attention to promoting cooperatives to boost farmers’ collective power and bargaining strength. In Japan and many European countries, farmers have formed cooperatives to boost their competitiveness, sharing technology to improve the quality of rice production. Thai farmers, however, are left to compete on their own.
Many Thai farmers have to lease the plots they cultivate, and do not put resources into improving the quality of the soil. Most of the land is owned by real-estate middlemen. Many of these land plots are in deserted areas. To turn this unused area into a field of gold for the benefit of farmers, the government must find a mechanism to ensure that land plots are developed for the sustainable benefit of the majority of farmers.
Thailand’s annual rice exports of approximately 5 million tonnes are shipped to more than 100 countries. Therefore, there is room to increase the amount of rice consumed per capita in these destination countries.
Apart from restructuring the agricultural sector, farmers need to add value to their products by, for instance, using organic farming methods.
If Thailand is complacent, foreign consumers may eventually forget that jasmine rice originated in Thailand.