Freebies not the solution to challenges faced by Thai farmers, says World Bank

The statement was made at a seminar co-hosted by the World Bank and Kasetsart University on Friday to launch their joint study, “Ending Poverty in Thailand: Rural Income Diagnostic - Challenges and Opportunities for Rural Farmers”.

Nadia Belhaj Hassine Belghith, poverty economist at the World Bank, noted that rural Thailand continues to face the most severe poverty challenges, with high-income inequality.

Though it is commendable that the Thai government provides many freebies, this type of assistance will have a negative impact in the long run.

Witsanu Attavanich, a professor at Kasetsart University's Faculty of Economics who participated in this study, elaborated that gratuitous measures only help Thai farmers in the short term, while what they really need is to learn how to increase their productivity in order to sustain their income.

Wisanu called it a "waste of time and money”. He said that the government should use the budget to improve irrigation systems and agricultural technology, as well as to educate more farmers on current farming practices instead.

Belghith added that the right assistance would help Thailand overcome its persistent poverty.

"Cross-cutting policy measures related to skill development will also be important in order to support rural households," Belghith said. "With low levels of education and digital literacy, combined with an ageing farmer population, it is critical to develop the skills of farmers, young and old, to enable them to adapt to the changing context of climate change and benefit from new technologies."

The World Bank Rural Income Diagnostic for Thailand aims to examine the challenges and opportunities to improve income and productivity in the rural sector.

The diagnostic also examines how to facilitate income growth in the short to medium term and places particular focus on farming households given their higher poverty and vulnerability.

The report found that Thailand's poverty rate in rural areas was more than three percentage points higher than in urban areas in 2020. Furthermore, the rural poor outnumbered the urban poor by nearly 2.3 million. The majority of them make a living by farming.

Fabrizio Zarcone, World Bank country manager for Thailand, pointed out that Thailand has the potential to support faster and more sustained rural household income growth.

"As Thailand's economy adjusts to a new normal post-Covid, policy measures that boost agricultural productivity, encourage crop diversification to higher-value crops, and improve access to markets through improved rural connectivity and digital technology adoption can help overcome the constraints faced by the rural poor," Zarcone suggested.
 

According to the study, the Covid-19 pandemic has had a significant impact on the urban sector, resulting in strict mobility measures, business closures, and job layoffs.

However, the urban sector is expected to recover faster, while the rural economy will be hit harder by the crisis. The World Bank Thailand Covid-19 monitoring phone survey results also found that 70 per cent of rural households reported a decrease in income since March 2020.

The analysis also shows that Thailand has the highest income inequality rate in East Asia and the Pacific region, with a Gini coefficient of 43.3 per cent in 2019.

The average monthly income for rural households was only about 68 per cent of that of urban households. Rural households continue to face challenges, such as low education, a high number of dependents, and difficult living conditions.

In her closing remarks, Dina Umali-Deininger, regional manager of Agriculture and Food Global Practice at World Bank, urged the Thai government to reduce the disparity between urban and rural households.

She advocated increased agricultural productivity, added value in agricultural products, and more investments to improve the agricultural sector and prepare for the effects of climate change.