Which way ahead for Thai agriculture

27 January 1998

For a decade, agriculture has been on the dark side of the moon as far as government policy-making goes. Now it is suddenly lit by a thousand suns. In his birthday address, His Majesty the King drew attention to the importance of agriculture in pulling Thailand through the economic crisis. The agriculture ministry has drawn up a development master plan. Urban people are watching nervously to see how well the countryside will bear the strain of migrants returning to the villages. Shortages of sugar, rises in rice prices, and pictures of empty shelves in Jakarta shops, bring home just how important agriculture is.

But what direction for Thai agriculture at this pivotal time? The answers to this question are starkly divided. And the controversy is gathering.

At one end of the spectrum the theme is: self-reliance. Thai farmers should grow what they need for themselves, and only then think about producing extra for the market. They should turn their backs on mono-cropping for market sale. Experience shows this practice makes them slaves to agribusiness, victims of market volatility, and dependent on chemicals. The farmers finish up indebted and poisoned. The environment is degraded.

The antidote is natural vs chemical, mixed farming vs mono-cropping, self-reliance vs market-dependence. One of the heroes of this movement is Phuyai (headman) Viboon. He lost land and fell into debt through failed investment in mono-cropping. Finally he turned his remaining plot over to mixed farming, with a small orchard, vegetable garden, rice paddy, and fish pond to provide for his needs. He secured survival and happiness.

Many NGOs support this strategy. The original version of the Eighth Plan contained a budget to support experiments in such integrated farming across the country. The King has long shown his attachment to this approach. There is a display of a model integrated farm at the Suan Luang Rama IX park. The royal-sponsored Chai Pattana foundation proposed to promote integrated farming to help migrants returning to the countryside. The Ministry of Interior has taken up the theme of self-reliance in plans for countering the impact of the economic crisis in the provinces. Governors were recently called to Bangkok and instructed to promote schemes of self-reliance.

For many this strategy is not just economics but philosophy, not just about soil but also soul. In his birthday address, the King counter-pointed self-reliance against the "extravagance" of recent years. For social thinkers like Dr Prawase Wasi, this strategy is "real development" in a way that rising GDP statistics are not, because it gives people back control over their lives.

At the other end of the spectrum the theme is: agri-technology. Advocates point out that Thailand offers a great opportunity for expansion of agricultural production driven by modern technology. This opportunity arises because investment in agriculture in the past has been small, the technology has remained backward, and productivity is low. Modest investments in modern technology can unlock a huge underused potential of Thailand’s large cultivated area. The resulting growth will help farmers, help exports, help the nation.

This thinking underlies the agricultural master plan now being submitted to the cabinet. Thailand has the potential to provide the world market with high-quality, value-added agriculture-based products. The plan proposes investments in cultivation technologies and in processing. It also proposes a new model of vertical integration which links farmer, agribusiness, processing plant and international marketing in one chain. Unused land will be mobilised for the scheme. Farmers will be recruited to grow the inputs using packages of inputs and technology from international agribusiness firms. The countryside will be zoned to funnel the products into processing plants and marketing chains under close quality control.

The two approaches could hardly be more different. One wants to insulate Thai farmers from the world market. The other wants to integrate them more closely with it. One puts people before production. The other reverses the priority. One hopes to build an alternative to globalisation based on local communities and local needs. The other seizes globalisation as an opportunity to be embraced for rapid expansion.

The critics of the self-reliance strategy argue that Phuyai Viboon’s model makes a nice retirement plan only. It offers little for a young farmer with a family and with ambition. Thai agriculture has been closely linked into world markets for over a century. Withdrawal is not really practical. Going for self-reliance will just magnify the gap between the city and the countryside, the world and the village. Besides, the whole approach reflects an urban myth of an isolated, contented peasantry which simply does not stand up in today’s age of city-village migration and rural protest.

Critics of the agri-technology strategy argue it will simply extend and deepen the problems of the last generation. A few farmers do well. Rather more get into debt. Agribusiness gets all the benefit. The environment suffers. Local communities decay under the pressure of commercialisation. Besides, the master plan builds on the myth that there is spare land around to launch this scheme.

Recently a third approach has emerged. Its advocates agree with the criticism of both approaches. Self-reliance is too dreamy. Agri-technology too dangerous. But they believe there is still a way for farmers to survive and prosper in the industrialising, globalised age.

They accept that Thai agriculture is already highly commercialised and that any retreat from the market is impractical. But equally they believe that delivering the Thai farmer, trussed by debt, into the hands of international agribusiness is not a good social policy. They start from the principle that a farm is a unit in a commercial economy and should be treated as such - as a firm, as a business. The problem is that most farmers don’t know how to run a business, so the first priority is to teach them - some basic accounting and business principles. The next problem is that each farm-firm is too small to be anything other than a victim of market forces, so the solution is to band many together for strength through cooperation.

Thailand has had agricultural cooperatives for decades, but they have limited their activity to joint marketing. As a result, they have never progressed very far. The need now is for vertical cooperatives whose activities range from buying inputs, through processing to marketing. The thinking is not so different from the agriculture master plan. The point is that the vertical units would be owned by the farmers.

The debate is about agriculture, about very different social philosophies, and ultimately also about money - the small amounts left in the national till for developing anything. After the long lunar night of policy debate, the approaches are very far apart, and the disagreements will be polar. Newin Chidchob, who is championing the master plan and who is rapidly being identified as the friend of agribusiness, is about to discover that vote-buying litigation is a small part of his problems.