ttb analytics study finds that Thai farmers face structural problems regarding unfair distribution of income from produce. Indicating a moratorium on farmers’ debt payments It may only have a short-term effect. Distribute income back into the hands of small farmers Suggesting to accelerate the development of agricultural potential
TTB Economic Analysis Center (ttb analytics), Thanachart Thai Military Bank Issue a report on measures requested The 3-year moratorium on farmer debt payments is the 14th time in the country. It may only have a short-term effect due to the small distribution of income from produce back into the hands of Thai farmers. Suggesting to accelerate the development of agricultural potential to create a fair distribution of income and eliminate the debt problem of Thai farmers in the long run.
This is from past information. It was found that the past 13 debt moratoriums were not as effective as the project’s goals should have been because more than 70% of farmers participating in the project had increased debt burden. Including bad debt in the agricultural sector has not decreased at all. It reflects that the debt moratorium project It might just be a delay. Or is it just painkiller given to Thai farmers? In order to relieve worries about financial burdens for a while longer.
ttb analytics study found that Thai farmers face structural problems regarding the unfair distribution of income from their produce. Because they were unable to advance from being a producer to being an entrepreneur. Therefore, it is still only a producer of intermediate products for entrepreneurs who produce final products. By studying the cost structure of white rice production. which has the following details:
In 2022, the average price of 100% white rice was 17.5 baht/kilogram, with income entering the hands of farmers of only 8.8 baht/kilogram, based on the price of paddy rice purchased at the farm. But from this income, farmers had to bear the costs of Production (cultivation) at 8.16-9.32 baht/kg (in cases where farmers have the cost of renting fields and agricultural machinery), increasing from 2021 at around 7.25-8.28 baht/kg as a result of the price of chemical fertilizers and chemicals. Increasing agricultural prices have resulted in Thai farmers having a profit from rice cultivation in 2022 of only around 0.64 baht/kg, including in some cases with high costs, they may suffer a loss of 0.52 baht/kg.
Meanwhile, rice from farmers will be sent to entrepreneurs as raw materials. To process into white rice for sale to the household sector. It was found that entrepreneurs had costs from paddy when processed, packed and transported at approximately 13.03-13.87 baht/kg, which is equivalent to a gross profit before deducting sales and administrative costs of approximately 3.62-4.67 baht/kg.
From the above information It is clearly seen that Distributing income from the production of 1 kilogram of white rice at an average price of 17.5 baht, profits will go to entrepreneurs at 20.7-25.5%, but from a farmer’s perspective, they receive only 3.7% and there is a chance of loss for those with higher cultivation costs. High. However, farmers still have to bear the risk of production costs. that fluctuates according to the prices of fertilizers and agricultural chemicals Natural disasters and unfavorable climatic conditions
Therefore, from the analysis of returns distributed back to those involved in the production of agricultural products. Through a case study in the white rice market, it was found that farmers are the group that receives low returns and must bear all the risks in the production process. As a result, every past debt moratorium policy is just a painkiller to delay time. or relieve symptoms during the period of payment suspension Farmers will start to feel the pain again once the painkillers wear off once the moratorium ends.
However, this 14th installment of the debt moratorium project has an interesting issue regarding measures to develop potential to rehabilitate debtors under the principle of “leading market, additional innovation, increasing income” where a budget has been prepared for project participants to use as products. Loans for occupational rehabilitation, maximum credit limit per person not exceeding 100,000 baht
In this regard, ttb analytics views the amount of money in the said project as If allocated efficiently, it will help raise the business potential of Thai farmers. And it can be a long-term solution to debt problems. through the following suggestions
1. Raise the level of farmers with potential and readiness Become an entrepreneur who can increase the profit margin from the final product. Previously, profits were received in proportion to the price of intermediate products that were only raw materials.
2. Providing knowledge to farmers about distribution channels Nowadays, selling agricultural products is easier and more convenient than in the past. Through online channels that can reach consumers without borders. And products can be delivered through a transport service provider (Third Party Logistics) that has a service area covering the country.
3. The government sector helps establish a fund to reduce farming costs, such as for fertilizer, medicine, rice varieties, as well as providing capital goods that farmers can rent for use at a lower price, such as agricultural machinery. or capital goods used in product processing, such as community mills that increase opportunities for farmers to process raw agricultural products. To become a final product that can directly meet the consumption needs of the household sector.
4. Educate farmers to use cultivation technology such as Smart Farming to increase cultivation efficiency through a high-precision system (Precision Agriculture), which will help increase the amount of production. Increase the efficiency of using fertilizer Reduce the amount of pesticide use.
In summary, the debt problem of Thai farmers This mainly comes from the problem of distributing income from the produce that returns to the hands of very few Thai farmers. They must also bear the risk of fluctuating costs. and the amount of production is difficult to predict due to climatic conditions.
Therefore, if there is no structural change Suspension of debt payments to farmers is like a painkiller that helps Thai farmers feel comfortable only for a short period of time. But in the context of this 14th debt suspension project, it is considered that there is still hope from the money that can be allocated to solve the problem. structural problems If it can be achieved according to the implications of the potential development measures to rehabilitate debtors under the principle of “leading markets, additional innovation, increasing income”, it will be like dispensing disinfectant to the debt problems of Thai farmers to reduce them sustainably in the long term. Long.
Source: Thai News Agency