Thai Agricultural Sector: From Problems to Solutions

Agriculture sector in Thailand employs around 30 percent of total labor force covering 6.4 million households. However, it also generates the lowest value added per worker with the slowest growth relative to other economic sectors, as its contribution to national income has declined over the past three decades accounting for only 10 percent of GDP in 2019. The many problems that afflict the sector include:

• Poverty: Some 40 percent of farming households earned an annual income below Thailand's poverty line of 32,000 baht.
• Debt: 30 percent of farming households have debt levels above the average annual farming income per person and 10 percent have than three times higher debt.
• Ageing: Agricultural labor aged 40-60 increased significantly from 39 percent of the workforce in 2003 to 49 percent in 2013, while younger farmers aged 15-40 declined from 48 percent to 32 percent over the same period. Ageing problems differ across regions. However, many areas in the Central region have higher proportions of elderly labors in households than in other regions of the country, with the oldest head of households in Samut Songkhram, Sing Buri, Nakhon Nayok, Ang Thong, and Roi Et.
• Land ownership and access to water resource: According to farmer registration 2017, some 40 percent of farm households do not have land ownership and only 42 percent of them have access to water resource, creating a large inequality in access to land and water resources. Considering the type of water sources, merely 26 percent of the agricultural households have access to irrigation system and most of them are concentrated in the Central, the lower North, and Bangkok and its vicinity.
• Small size of farm: In 2017, half of farming households owned below 10 rai of farmland per household, with an overall average of 14.3 rai owned for agricultural families. Small plantation areas partly affect productivity of the sector, with 50 percent of total farming households having productivity levels below the mean.
• Limited farming portfolio: Two third of households still grow one crop a year, especially for key economic crops. Although the irrigation systems in the Central region allow for all year round agriculture, most agricultural households grow monoculture, especially the planting of in-season rice and off-season rice accounts for 88 percent of the households that are engaged in a rotation of monoculture.

Climate change will further increase the production risks faced by the agricultural sector. The changing climate is also adding to resource problems such as water scarcity, pollution, and soil degradation. According to Ministry of Agriculture and Cooperatives, floods and droughts in Thailand continue to rise with higher intensity. Most affected areas are from the Northeastern and Southern regions.

Farm households suffered greater negative impact from COVID-19 than general households. According to the FAO’s COVID-19 country assessment, farm households were adversely affected by a loss of income of 39 percent while general households experienced an income loss of 16 percent as compared to their respective levels of income before the pandemic. The smallholders’ income was also reduced by around 40.3 percent due to oversupply and the inability to plant the farmers’ seeds as of the onset of the pandemic.

However, one glimmer of hope is seen in improved education of Thai farmers, especially the young ones. The share of agricultural workers who graduated at least upper secondary school increased from 12.1 percent in 2003 to 21.5 percent in 2013. This provides a good opportunity to introduce modern technology to improve the productivity of Thai farming.

Due to the many problems highlighted above, policy reforms are needed within and beyond the agricultural sector to strengthen incentives for Thai farmers to achieve sustainable productivity growth. The government should support the younger generation entering the sector to strengthen the industry with innovative instruments and farm management. These could build up both productivity and add value to farm products. Further investment in research and development (R&D) is required to spur innovation which can improve sustainable productivity growth. The government may further facilitate private sector innovation by, for example, addressing investment barriers that impede R&D, ensuring that private knowledge is disseminated, and encouraging – where appropriate – public-private partnerships for R&D that have public goods outcomes.

The authors would like to thank Dr. Sweta Saxena and Iwona Spytkowski for their editorial comments. The views expressed within this publication are solely those of the authors and do not necessarily carry the endorsement of the UN. Please address all correspondences to manop.udomkerdmongkol@un.org.