SUNS  4249 Thursday 9 July 1998

Thailand: Farmers demand concessions



Bangkok, Jul 7 (IPS/Satya Sivaraman) -- With Thailand's urban-based financial and manufacturing sectors collapsing, the government is depending more and more on the country's strong agricultural base to provide export earnings, fresh employment and food security.

But despite the crucial role of the agriculture sector, farmers groups say they are a neglected lot, with successive governments catering to the needs of only urban lobbies.

In late June, over 3,000 farmers belonging to the North-Eastern People's Organisation (NPO) staged a protest in Bangkok to draw attention to their demands, among them a five-year moratorium on the payment of debts they owe the state-run Bank of Agriculture and Agricultural Cooperatives (BAAC).

Farmers leaders say that if the government can spend over 800 billion baht (about 19.5 billion U.S. dollars) to bail out a few dozen banks and finance companies, why not sacrifice around one fourth that amount for the sake of several million farmers.

"The government spent just five days to pass financial decrees to save private financial institutions. But when it comes to farmers issues they want to sit on even the simplest solutions for years," says
Bamrung Kayotha, a prominent farmer leader and advisor to the Assembly of the Poor, a rural lobby group.

He was referring to the decrees passed recently by the government of Prime Minister Chuan Leekpai which effectively transfer the debts of crisis-ridden privately owned banks and finance companies to the public sector.

So far the government has agreed to allow a one-year rollover of the debts owed by farmers to the BAAC and to pass a bill -- now in its draft stages -- for rehabilitating lives of farmers affected by the
economic crisis.

The draft bill calls for the setting up of a fund to help small-time farmers who are in deep financial trouble or in need of technological development in order to stay competitive.

According to its most recent report, the BAAC had lent 180 billion baht directly to 3.4 million families. It says that farmers may be able to pay back some 160 billion baht after seasonal crop production. Only 19 billion baht, or about 15% of overall loans, falls into the category of bad debts caused by natural disasters.

BAAC officials say that the real problem of farmers is not so much their debts with the government bank, but with private lenders who charge very high interest rates.

Differences of opinion have cropped up among various farmers organisations over the finer details of the debt moratorium demand as well as the proposed bill to assist small farmers. And the Chuan
government is believed to have exploited the divisions within the eleven groups that make up the NPO.

But despite the differences, observers say that farmers have managed to drive home the message that no government can ignore the plight of the rural folk and hope to stay long in power.

"Through their rallies in the capital city the farmers have found a dramatic way to escape the political silence imposed on them all these years," says a supporter of the farmers groups.

Writing under the pseudonym of Chang Noi in a leading Bangkok based English daily, he said successive Thai regimes have always adopted a paternalistic attitude to rural folk and frowned upon attempts by farmers groups to bring their problems to Bangkok.

Recently, farmers in Thailand's northeastern Buriram province, also called for decentralisation, enabling local communities to run their own affairs, decide for themselves and solve their own problems.

Historically, agriculture has been the backbone of the Thai economy, with commodities like rice, tapioca, cassava, maize, rubber and pineapple making up the bulk of both the Thai gross domestic product as well as overall exports till the late 70s.

All this changed drastically during the 1980s when a spurt in manufacturing pushed agriculture to the background.

Between 1980 and 1994, for example, the share of agriculture in Thailand's GDP fell from 23.2 percent to 10.2 percent while its share in exports dropped from 48.4 percent to just 16.6 percent.
The gap between urban and rural incomes has also grown rapidly from 2.5 times in 1981 to 4 times in 1992.

In terms of employment, however, agriculture continues to employ the bulk of the population, or more than 50 percent of the country's 30 million strong workforce.

However, during the economy's boom since the mid-80s till the early 90s, an estimated six million people from the countryside migrated to Bangkok in search of higher income in the industrial sector, leading to labour shortages in the agricultural sector.

With businesses in the Thai capital now closing down due to poor sales and bankruptcy, many of these rural migrants are certain to go back to their family farms or work as hired labour.

Economists predict at least 2.8 million people, mostly in urban areas, losing their jobs due to the economic crisis.

Now that agriculture is once again on top of the national agenda, why is the government still reluctant to consult regularly and seriously with farmers in the same way it deals with bankers and businessmen? asks Chang Noi.