Creating the Policy Framework for a Sustainable Rice Industry in Thailand

Pres

ente

d by

, Sa

rtha

k Lu

thra

Spatial Distribution

Demographics

Rice Production in Thailand

Commodity Prices - Volatility

Consumption Pattern

Rice Pledging Scheme

Government buys rice to farmers at prices 50 % above the market

price.

RICE was stockpiled in warehouses and exports cutted

Sudden shortage from the #1 exporter will

increase rice world prices

Revenues will be used to sustain the subsided

scheme

Win-win situation for the

government and farmers

Consequences Rice Pledging Scheme

INDIALIFTEXPORTBANSADDING10MILLIONTONNESOFRICETOTHEMARKETFARMERSLOSSINCENTIVESTOPRODUCEHIGHQUALITYRICE

LOSSESESTIMATEDUS$22BILLION=ONEYEARTHAILANDGVTTOTALBUDGET19MTONNESOFRICESTOREDWHILETHAILANDPRODUCE20MTONNESAYEAR

US$1.3BILLIONINDEBTTOTHEFARMERS

Measures Military Junta

SELL RICE IN WAREHOUSES AS QUICK AS

POSSIBLE

GIVE LOW INTEREST

RATES LOANS TO FARMERS TO KEEP RICE

STORED

DIVERSIFY EXPORTS:

RUBBER GLUT

Short Run Strategy

Exis6ngstockmanagement

Trade

MicroCredit

ICT

INTERVENTIONSVulnerableconsumersofthe

societyAffectedfarmers

EthanolproducNon

ExportstoAfricanmarkets

Microfinance(SHG/JLG)Riskpooling

ExploiNngtechnologye-Farming

Microfinance Opportunities

Self help groups

Joint liability groups

MFI

Bankcredit

Support

Highersavings

FinancialSustainabilityAssetgeneraNon

Selfsufficiency

EntrepreneurshipRiskmanagement

ICT: e-Farming CREATING A VIRTUAL DATA AND MARKET PLACE WHERE FARMERS CAN DECIDE,

TRANSACT, AND REALIZE BETTER PRICE

Private/Market

Government

Data

Technology

VLE

Farmer

•  Weatherdata•  ModernfarmingpracNces•  Marketprices•  Subsidies•  CropinformaNon•  Inputprices

INTERFACE

Reducing the subsidy burden Empowering and educating the farmers Improved yields Better price realization Higher productivity

Royal Rice Council Political Autonomy

“Independently promote, and coordinate, a sustainable and competitive rice industry

across the value chain”

Responsibilities

Governance

Mandate

Financing

Labor development Diversification

Research & Development

Medium Term Strategy

1.5

60

Insured Rai (millions)

Risk Management

Capital Investment

Access to Financing Opportunities

80% subsidized

476 million baht

Medium-term loans

Thai rice for Chinese machinery

Factors of production

Incentivizing youth farmers

Financing

Bank of Agriculture and Agricultural Cooperatives

Alternate Products

Alternate Crops

-  Rice noodles -  Rice paper -  Rice-flour cakes -  Rice bran oil -  Rice vinegar -  Rice milk -  Puffed rice -  Rice crackers -  Quick-cooking rice

1.7 trillion baht

domestic market

Via zoning areas

Better water management

Less supply, better prices

Diversification

Department of Foreign Trade, Ministry of Commerce

Empowerment

VET Skilling

Phosop, traditional Thai rice deity

GrowThailand Demand-based

Labor Development

Research Areas

Research Funding

Lowest yield among top 10

producers, less than world average

50% return

Labor-saving techniques

Demand-based strains System of Rice

Intensification

$6 million budget

Budget/researcher

Financed via export

levy

Research & Development

Department of Rice, Ministry of Agriculture

VocaNonaltrainingandeducaNonprogramstoprovideThaifarmerswithgreaterlabormobilityandabilitytotransiNonintodifferentsectors

Long Term Strategy Labor development

Thailand’sDepartmentofExportPromoNonshouldpartnerwithindustryleadersandriceproducersinaninternaNonalbrand-buildingcampaignpromoNngThairiceAstrongbrandbuildingeffortmaytakeaminimumofatleasttwotothreeyearsininternaNonalmarketsdependingonthecountryandregionR&Dcansupportbrand-buildingbyprovidingThaifarmers,exporNngcompanies,andSMEswithreliableandaccuratemarketresearchandintelligence

International Brand-Building Strategy

Indicative Roadmap Plan Long Term Short Term Medium Term

Existing stock management

Trade and export to

African markets

Micro-financing

ICT & e-farming technology

Royal Rice Council

Rice futures contracts

Alternate products

Closing gender and youth unemployment

gaps

Increasing R & D funding

Labor diversification

International brand-building strategy

Thank You