Thai agricultural 'relics' are back in fashion again

Thai agricultural 'relics' are back in fashion again

Losing their jobs in the cities, workers are expected to return to the countryside to revive their ties with the farms. Satya Sivaraman of Inter Press Service reports.

BANGKOK: With the collapse of its city based, yuppie economy in the wake of a runaway currency crisis, Thailand's long neglected farmers are back in fashion once again.

During the country's boom years, farmers were often called 'relics from the past' by urban commentators. But more and more Thai policymakers are looking forward to riding out the economic mess on the back of the country's still resilient agricultural sector.

Still, the sheer enormity of the crisis affecting millions of people has experts asking whether the Thai countryside can indeed serve as a lifeboat for the economy, without further damaging its already frayed ecology and social relations in the process.

The Thai baht has depreciated by nearly 60 percent since July this year, forcing the country to seek a bailout loan from the International Monetary Fund and sending into bankruptcy hundreds of firms and businesses overexposed to foreign loans.

In the first week of December, the Thai finance ministry announced the closure of 56 out of the country's 58 finance companies due to mounting bad loans, which have thrown thousands of white collar workers out of jobs. Nearly 50 percent of the finance companies' more than $22 billion worth of outstanding loans is considered bad.

"Though an agrarian economy may be considered outdated, Thailand needs to take a step back in time," the Thai monarch Bhumibol Adulyadej said in a speech to the nation on the occasion of his 70th birthday in early December.

In his first ever public comments on the economic crunch, the king emphasized the need for economic self reliance and suggested the proper use of Thailand's land surplus as a means of survival for people affected badly by the crisis.

These sentiments have been echoed by Thai Prime Minister Chuan Leekpai, who called a meeting of top Thai conglomerates to seek their help in boosting exports of agricultural products. In sharp contrast to its industrial and financial sectors, Thailand's agriculture continues to be a source of employment and sustenance for rural folk.

"With the value of the baht going down drastically, farmers are now getting a much better price for their products which are exported to foreign markets," said a senior official at the Thai National Security Agency. The office monitors the economic crisis to watch out for potential social turmoil it may cause.

Though many analysts expect a spurt in crime and lawlessness in urban areas due to rising unemployment, they are confident about the stability of the Thai rural sector. Some even expect the abundant availability of food products within the country to act as a brake on social discontent, even in urban areas.

Next year for example, Thailand's main season paddy production is expected to increase by nearly 20 percent from this year's level. Export volumes are projected to reach a record 5.3 million tons, worth $1.5 billion.

Exports of Thai rice, the highest in the world for many years, are also expected to be helped by drought in countries like Indonesia, China and Malaysia affected by the El Nino weather phenomenon.

Historically, agriculture has been the backbone of the Thai economy. Till the late seventies, crops and commodities like rice, tapioca, cassava, maize, rubber and pineapple made up a bulk of both GDP and overall exports.

However all this changed drastically during the eighties when a spurt in manufacturing, seen as the engine of industrialization and a key pillar of rapid growth, pushed agriculture to the background. Between 1980 and 1994, the share of agriculture in Thailand's GDP fell from 23.2 percent to 10.2 percent and its share in exports dropped from 48.4 percent to just 16.6 percent.

But in terms of employment, agriculture continues to employ a bulk of the population, or more than 50 percent of the country's 30 million strong workforce.

However during the boom period in the Thai economy since the mid eighties, an estimated six million people from the countryside migrated to Bangkok in search of higher income in the industrial sector. This led to labor shortages in the agricultural sector.

Now with businesses in the Thai capital closing down due to poor sales and bankruptcy, many of these rural migrants are expected to go back to work on their family farms or as hired labor. Economists predict that due to the economic crisis one to four million people, mostly in urban areas, are expected to become unemployed over the next year.

"Like in the past, the Thai countryside will absorb surplus labor arising due to industrial recession. But it will leave the villagers much poorer in the long run, as there will be more people sharing the same resources," said Voravidh Charoenlert, labor economist at Bangkok's Chulalongkorn University.

During the recession that hit the Thai economy during the early eighties, when migrant labor also left Bangkok to return to their villages, some 3.5 million people dropped below the poverty line.

This time, experts see an additional problem. Amid the reverse flow of migrants from urban to rural areas, there is the question of adjustment to village life for workers who have been used to city lifestyles for too long.

Some analysts fear the spread of urban drug and prostitution syndicates to the countryside and violent conflicts arising from the clash of expectations between village folk and returnees from the cities.

"Thai policymakers have not paid any attention to the villages during the boom years and concentrated resources on the urban economy to achieve illusory economic growth. The village economy was deliberately squeezed to push labor into the city," said a commentator writing under the pseudonym of Chang Noi in a Bangkok based, English language daily.

"Property developers, dam builders, pulp factories, gravel quarries and petrochemical plants were allowed to destroy natural resources and disrupt local communities," he argued.

During Thailand's good times, few questioned the wisdom of investing in and pouring resources into cities and moving away from agriculture to industrialization.

At the height of the economic boom, following a demand by farmers for state support to shore up falling domestic and international prices of rice, one well known Thai economist had actually called for phasing out rice production in the country. Agricultural subsidies were a waste of money, he had said.

Mercifully for Thailand, which is now banking on its rice economy to bail it out, this was one policy prescription from "experts" that was not taken seriously.

-- IPS