Crop zoning has both supporters and detractors

Crop zoning has both supporters and detractors
Petchanet Pratruangkrai

Issue has become a hot topic in past year after price of rice and rubber tumbled

Zoning may not be a perfect answer for the agricultural revolution as hard and soft infrastructure needs to be prepared to support the supply chain, while market demand varies in each area.

However, zoning could be done on a voluntary basis if each area could support the planting, production and distribution of a particular crop effectively.

Zoning became one of the hot topics this past year after the prices of rice and rubber tumbled because of oversupply. There were discussions on the pros and cons of the zoning policy, since it could totally change the country's agricultural trend in the future.

The Nation has interviewed agricultural experts and companies on whether zoning could be a solution for commodity gluts and price crashes.

Pros

Zoning has been one of the flagship projects of the Agriculture Ministry since last year. The ministry launched a plan to zone agricultural land for many crops, mainly rice, rubber, oil palm, sugar cane, cassava and maize.

The Commerce Ministry has also zoned farmland for alternative crops to solve the problem of excess rice production in some areas. The ministry projects that zoning will be adopted by farmers in remote areas that are far from irrigation systems, mills or warehouses. There is still high demand for some crops such as sugar cane.

Commerce Minister Chatchai Sarikulya said last week that zoning would help ensure that the price of rice or certain other crops would not drop significantly, as supply could be controlled.

The government will cooperate with companies as they can provide clear feedback on demand in the market and help farmers develop crops to serve demand in the domestic and overseas markets.

Isara Vongkusolkit, chairman of the Board of Trade and the Thai Chamber of Commerce, said the rice industry needed long-term development, and zoning could help solve the problem of falling prices of rice and other crops.

However, zoning should be adopted with the "sufficiency economy" philosophy and with modern farming technology to improve productivity and lower costs. Promoting alternative commercial crops where rice cultivation is not suitable should be considered, as the oversupply of rice placed a huge financial burden on the government to subsidise farmers every year.

The chamber's study showed Thailand has about 70 million rai (11.2 million hectares) of rice plantations, but 27 million rai is not suited for rice as the land is outside irrigation areas and has inappropriate soil quality. This land should be promoted for other cash crops such as maize, cassava, sugar cane, palm nuts and rubber.

The incomes for Thai farmers vary widely. Those cultivating oil palm net Bt5,768 per rai on average, while sugar cane nets Bt5,708 per rai, rubber Bt5,128, maize Bt1,196, cassava Bt1,045 and rice a mere Bt504 per rai. Rice growers should be encouraged to integrate their plantations to reduce costs.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said zones for growing rice should be delineated to control grain quality.

Thailand has combination areas for growing each kind of rice seed. When cultivated, rice grains have been mixed. This causes a problem for rice traders as the quality of each grain is different. Zoning would clarify clearly the type of rice, so traders could easily deliver the right product in accordance with market demand.

For instance, the Northeast should be promoted for jasmine rice, while the upper North should grow hard-grained rice, and the Central region should grow Pathum rice. If the country has zones for rice growing, millers and exporters will easily adhere to the same standard and serve the demands of each market.

For instance, production of parboiled rice needs hard-seed paddy, but when Thailand mixes cultivating areas, parboiled-rice producers will not be able to ensure they are getting the right grains, as paddy rice is difficult to analyse. But after cooking, consumers will acknowledge that the characteristics are different and become dissatisfied, as the quality of parboiled rice is substandard.

The quality of Thai rice has plunged in the past few years. With lower quality yet higher prices, many rice buyers have switched to other countries such as Vietnam, Myanmar and Cambodia. The quality of Thai rice, in particular jasmine and white rice, has declined seriously. Its aroma and appearance after cooking are different from the past, Chookiat said.

Cons

Long-term development is still needed for hard and soft infrastructure to support zoned crop production. Hard infrastructure includes irrigation, transport and logistics systems, development of water sources and soil-quality improvement. Also needed are warehouses, production plants, and roads and railways for shipment.

Each area also needs to consider the impact of natural disasters such as floods, monsoons and drought.

Other variables are supply and demand in local areas, export ability, price and profit, as well as the cost of production, number of processing plants for managing each crop, yield per rai, and economic situations.

Human resources are another concern for zoning implementation. Factors to be considered are the number of farmers, targeted groups or number of consumers, readiness, potential, and interest, knowledge, experience, skills, equipment, technology adoption, coordination with government and private agencies and cooperatives, and training of farmers and officials.

Nipon Poapongsakorn, distinguished fellow of the Thailand Development Research Institute, said zoning was not meant for Thailand. Socialism had been a failure because of zoning.

"Thailand's farming should be modernised, while the sufficiency-economy philosophy should be the right answer for farmers as they can mix up a variety of farm products and development," he said.

Thailand needs to categorise farmers into four groups so that the government can select which group should be supported to continue growing rice, or to cultivate other crops.

In the first category, about 900,000 households with an average of 70-90 rai for rice production in areas with irrigation and adequate rainfall should be encouraged to continue growing rice. However, the government needs to encourage this group to grow quality rice, while they do not need financial help.

The second group consists of about 10,000 households of alternative rice farmers, who should be encouraged to grow organic or other premium varieties to serve the high-end or niche markets, such as seniors and the health-conscious segment of consumers.

The third group counts about 1.7 million to 2 million households of small and medium-sized farmers, who should be encouraged to grow other crops or adopt modern farming techniques and the sufficiency-economy model. This group is mostly older and lives outside irrigated areas. The government should encourage them to grow other commercial crops than rice, or to change to a combination of farming methods so that they could earn higher incomes.

Last is the group of poor farmers, who live in remote areas with low-quality soil. They should be encouraged to quit growing rice and to plant other crops or do other work outside of farming. This group has about 1 million to 1.3 million households. Only 16 per cent of their income is from rice cultivation.

Somporn Isvilanonda, a senior economist at the Knowledge Network Institute of Thailand, said nobody could say clearly that if Thailand focused only on zoned crops, would the local and overseas markets respond as hoped each year.

Market demand is very volatile. The zoning policy should be adopted when demand is stable. Thailand could adopt partial zoning and focus more on developing a value-added supply chain for crops, he said.

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