Competitiveness: Key Study says Thai Agricultural Sector Under Abhsit Worse Hit in 10 Years!

I prefer food from an open and free Internet friendly country

I prefer food from an open and free Internet friendly country

By Pooky-this blog’s economics journalist

The University of Thai Chambers of Commerce and the Siam Commercial Bank, both did a study on Thailand’s agricultural sector and both found to sum it up, “The Thai agricultural sector is in the worse condition in 10 years.” So why is that-because last year there was a global food shortage scare. But this year, agricultural prices have fell through the bottom.

Abhsit’s Policy Focus:

Unlike Taksin whose main supporter are the poor that relies on agriculture, the Abhsit government is the government of the middle class.

This can be clearly seen on budgetary outlays. While spending close to US$3 billion on a mass transit system in the Bangkok and surrounding area, total spending from the US$44 billion stimulus package-only about US$4 billion will be headed to putting in water ways to feed the farms.

Can Thailand’s agriculture, that support the lives of about 10 million poor Thais and a very significant agri-industry, withstand that type of focus?

Over more, The Institute of Management Development ranking of Thailand’s overall competitiveness at 26 for this year-while many other that Thailand is competing with such as Malaysia on rubber and palm oil-has increased its ranking from 26 five years ago to currently at 18 place. China, India, and Vietnam are also climbing up the ranking very fast.

  • Vietnam, that competes with Thailand on agriculture,  in fact-says it is a priority of the government to start building the “Vietnam Agricultural Brand” globally.
  • Even in advance agricultural countries, such as Holland, are building “Food Valley” to match “Silicon Valley” in being the center for agricultural and related research hubs.

Global Agriculture Environment

  • UN is planning to spend countless billions of dollars on development of third-world agricultural production capabilities-to off-set starvation-new supply and self-sufficiency may characterize traditional markets
  • WTO is pressuring developed countries to limit agricultural support-Protected markets may opening up, but the impact on prices will have to be seen
  • Converting agricultural products for fuel is a global trend-supply of food becoming highly dependent on oil price
  • Globally agri-business is on the rise-process and packaging plays increase important role
  • Triad of food cartel, food bank and futures market shaping agricultural prices-Smart merchant is taking more power away from state control
  • GMO bad press is seeing a rush into food strain research-Science of agriculture is advancing rapidly
  • Globally green agriculture and chem plus machinery are competing-green is human intensive while population shifts out of agriculture making it dependent on chemical and machinery
  • Global consumers move to food safety-China food scare, for example, is forcing higher standard globally
  • Globally policy copy-cats are on the rise-like Kitchen to the World and Brand building is being done by many countries

Abhsit’s Failures

  • Fail to prop-up prices of many key agricultural products-many farming groups have protested Abhsit for poor price
  • Fail to focus on raising Thailand’s agricultural output/per unit-Thailand’s ranks as one of the lowest agricultural productivity globally
  • Fail to give adequate emphasis to water system development-the much needed in E-Sarn region of Moon and She water development projects scaled down
  • Fail to lift falling Thailand’s share of global food export market share-Thai market share is falling rapidly
  • Fail to lead new agricultural seeding strain development-Profit seeking private sector has taken the lead
  • Fail to create unity in regional agricultural producing countries-The once strong Thailand and Vietnam link on rice, for example, has fallen to ruins
  • Fail to maintain policy initiatives-The Thailand Kitchen of the World concept was left to settle dust
  • Fail to stop corruption in many government agricultural related programs-massive corruption continues to plague every aspect of the Thai agricultural sector

Global Environment Summary

  • Much greater competition in the globe’s agricultural sector
  • More turbulence ahead

Thailand Environment Summary

  • Abhsit has failed to address current problems
  • Abhsit has failed to lay the foundation for the future

Vision of the Future:

  • CP, a global class agri-business empire, Head, Tanin Chiewvaranond, said that Thai food price is among the lowest in the world. He said that was a wrong policy by the government to keep prices down for consumers-when in fact, prices should be allowed to rise to global parity to which farmers will benefit.
  • Taksin initiated a host of new initiatives such as Kitchen of the World, the Moon and She river development, to modernizing Thai farms for efficiency and profitability.
  • In fact, under the previous Taksin supported governments, food product tracing through the entire chain, was started and achieved-greatly improving the reliability and safety of Thai agricultural and food products.
  • In fact, the Taksin government was commended for bringing the bird flu under control very rapidly-saving that important industry.
  • Global interest on agricultural and related activity in Thailand has been heightened.

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