Soaring rice prices sow hope – and trouble – for indebted Thai farmers

Soaring rice prices sow hope – and trouble – for indebted Thai farmers

Sripai Kaeo-eam, a 58-year-old farmer in Thailand’s Chai Nat province, ignored the government’s advisory to restrict rice cultivation and planted a new crop in late August. She is motivated by the global spike in rice prices, which have reached their highest level in about 15 years after India curbed exports. Despite being the world’s second-largest rice exporter, Thailand has seen a 14.5% decrease in the amount of land under rice cultivation compared to the same month last year. This decline is attributed to climate change, unsustainable farm debts, and a lack of innovation in the country’s centuries-old rice cultivation system. These pressures are squeezing debt-laden Thai farmers, despite the tens of billions of dollars in subsidies they have received over the past decade. The drop in cultivated land could further reduce Thailand’s rice output, exacerbating food inflation and affecting billions of consumers who rely on rice as a staple food.

Thailand exported 7.7 million tonnes of milled rice in 2022, but the water shortage caused by drought conditions and the strengthening El Nino weather phenomenon is expected to worsen in 2024. This water shortage is likely to lead to a decline in rice output, adding to the challenges faced by Thai farmers. The debt burden is also a significant issue for farmers, with many borrowing to fund their crops and struggling to repay their loans. Thailand has one of the highest household debt levels in Asia, and 66.7% of agricultural households were in debt in 2021. The new coalition government has promised to improve farm incomes and implement measures to address the water shortage and extreme weather patterns caused by climate change.

Thailand’s rice sector has a long history, with the country becoming the world’s largest rice exporter in the past. However, market interventions and handouts in the past decade have stymied productivity and left Thailand’s rice sector lagging behind countries like Bangladesh and Nepal in terms of average yields. The government’s investment in rice research has also declined, further contributing to the low productivity of Thai rice farmers. Additionally, farmers are restricted to growing government-approved varieties, which limits their options and makes it challenging to compete in the export market. Countries like India and Vietnam have made significant investments in research and have surpassed Thailand in terms of productivity and export market share.

The challenges faced by Thai farmers have multiplied over the years, but the current high rice prices offer a rare opportunity for them to clear their debts. However, the future remains uncertain, and farmers like Sripai are keeping their fingers crossed for a successful harvest.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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