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"Though an agrarian economy may be considered outdated,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