1Agriculture was the main driving force behind the economy until the 1960s. The high levels of growth recorded during the next decades were due to the success of other economic sectors, and the performance of agriculture and its role in the industrialization process have tended to be overlooked. The rapid response by farmers to market incentives and their ability to constantly renew produc-tions, have provided the raw materials needed to establish a powerful national agro-industrial sector, they have satisfied the growing and diversified demand of the urban classes and maintained Thailand’s position among the leading exporters of agro-food products in Asia.

2At the end of the 1950s, when the economy was moving towards industrialization through import substitution, the state introduced taxes on agricultural productions and exports that particularly affected the rice-growing sector (Rice Premium 1955-1986): they represented an important source of funding for large-scale investments in agriculture and other economic sectors (hydro-agricultural infrastructure, communication). By maintaining rice prices artificially low, until the collapse of world prices in the 1980s, the state was able to control the cost of industrial labor and move into an export oriented industrialization (see chapter 5 Industry). Industry’s high demand for labor and its spatial spreading towards the periphery (1990s) have created neither a massive rural outflow nor a disaffection for agricultural activity. Agriculture continues to employ about 50 % of the working population, despite the low level of profits from traditional productions and the wide variations in incomes associated with fluctuations in world market prices (plate 30 Agricultural households and product). Alongside the trend in the census to overestimate numbers of agricultural workers by taking into account main employment only, the true proportion of workers in agriculture and their low income levels have to be moderated by the large numbers of rural workers who engage in multi-activity (seasonal or temporary) in different sectors of the economy, and are thus able to support farms which are barely profitable.

3Thai agriculture is peasant-based, with predominantly small and medium-sized owner-occupied farms. In 1996, the total area given over to agriculture, as defined by the Ministry of Agriculture and Co-operatives, was 21.2 million hectares (45 % of the entire country) of which 19.7 million hectares were cultivable land. These figures have been calculated by subtracting built-up areas, idle land and pastures from the total agricultural area. After the signing of the Bowring Treaty (commitment by Siam to provide rice for the British Empire, 1855), the rapid increase in productions was achieved essentially by expanding the cultivated areas. Agricultural colonization was achieved in successive phases, in a spontaneous fashion and on an individual basis (plate 31 Land utilization). The pioneer movement was backed by the state and benefited from the 1950s from the introduction of new cash crops, which enabled farmers to turn over to cultivation land that was unsuitable for rice-growing. The supply of land increased faster than the agricultural population, thus allowing a suitable man/land ratio to be maintained, at least until the end of the 1980s, which for most of the country marked the closure of the agricultural frontier (average landholding size of 4.7 hectares in 1990, and constantly decreasing since).

4Agriculture remains for the most part rainfed and subject to seasonal variations, even though the development of irrigation lay at the heart of the state’s planned measures to support the agricultural sector. Most state investment has been concentrated in the Central Plain, benefiting rice farming yet not giving rise to any real Green Revolution (plate 32 Irrigation). Generally speaking, Thai agriculture is still not very productive, and a significant diversification in productions has not been accompanied by major technical changes. High-yielding varieties, with the exception of just a few crops or a small number of irrigated zones, are little used and the consumption of chemical fertilizers is, on average, amongst the lowest in Asia despite a rapid increase since the 1980s associated with the development of various forms of contract farming. Small-scale mechanization (tractors, rotovators, threshers, pumps) has seen considerable progress throughout the country, strengthened in the 1990s by the increased cost of labor and the shortage of workers. The diversification of productions has been very dynamic under the impetus given by the private sector (networks of middlemen, agro-industrial groups) and is more a reflection of the farmers’ responsiveness to the signals of the market than the result of public action. Although the state has supported the agricultural sector by constructing infrastructure, agronomic research, credit or agricultural extension, the level of investments has remained low compared with that of other Asian countries and aid has tended to consolidate changes already underway rather than initiate new ones.

5Rice remains the main crop, both in area under cultivation and employment generated, and for its contribution to agricultural exports. Today rice farming is faced with a decrease in available resources (labor force, water), high production costs and competition from new Asian exporters on the world market (plate 33 Rice). The cultivation of sugar cane, which has developed considerably to respond to international demand, also suffers from increased industrial production costs over the last decade (plate 34 Sugar cane). Cassava has been maintained as an important upland cash crop thanks to new industrial outlets with higher value added and more diversified markets: the decrease in exports to the European Union has been compensated by the rapid boom in demand from Asia and from the national industries (plate 35 Cassava). Public aid today is tending to limit the advance of rubber cultivation in the South in favor of new tree plantations (oil palm; see also plate 64 Agriculture in North-East and South) and to encourage it in the North-East where its potential profitability is supposed to be high (plate 36 Rubber). The advance of crops such as maize, mungbean or soybean (plate 37 Other crops) illustrates the peasant farmers’ response to the demand from Thai agro-industrial groups, especially in the animal feed sector which forms the basis for the development of new types of contract farming for specialized breeding (plate 38 Recent breeding and shrimp farming activities).

6Since the 1990s, the choices of diversification or intensification of productions have been an indication of the great extent to which peasant agriculture was integrated into the activity of Thai agro-industry. They are also the result, more than before, of the distribution of the family labor force amongst a variety of agricultural activities and employment opportunities in non-agricultural sectors, the management of workers according to the potential of the agrarian systems and their integration into commercial networks. The history of agricultural colonization and the phenomena of diversification or intensification of productions can be seen by a marked specialization of agricultural regions (plate 39 Agricultural specialization and socio-economic features).

7While the great flexibility of agrarian systems and the dynamism of the peasant world constitute important assets for agriculture in Thailand, the gradual erosion of its comparative advantages linked with the rapid rise in production costs leaves a threat hanging over the country’s export capacities in a context of a liberalization of exchanges (especially within the AFTA-ASEAN Free Trade Area). The government has launched many new initiatives to develop joint strategies with other countries on the world market (rice, natural rubber).

8Attempts to achieve an extensive type of agricultural development have gone as far as they can and the decrease in available resources in the sector (labor force, land, water) presupposes considerable increases in productivity. Intensification of crops and of breeding is already underway and, not being limited to the irrigated farms of the Central Plain, it has based itself locally in the peripheral regions, creating environ-mental problems (see plate 8 Environment and natural resources). While agriculture is a profitable activity in the Central Plain delta and in a few zones specializing in high value added productions, the most vulnerable groups depend on local opportunities to diversify the non-agricultural part of the family income or on migration towards the urban centers or abroad. Part of the rural world must contend with the low level of agricultural incomes, indebtedness, land insecurity, and the consequences of public projects (eviction because of dams or forest reserves). These different factors feed a social tension that recent populist measures (see chapter 9 Social imbalances and spatial organization) do not seem capable of appeasing and which are finding an expression in the structured peasant movements of the 1990s such as the Assembly of the Poor.

Innovation and diversifacation in agriculture

Maize-sheller set up in a field in the northern piedmonts

Market gardening and rice-growing in the irrigated perimeter of Nam Phong (Khon Kaen province)

Retention of active population despite moderate agricultural value added

9At the beginning of the 1960s, Thailand had all the features of an agricultural economy, with 80 % of the active population engaged in this sector which contributed almost 40 % of the Gross Domestic Product (GDP). Despite the very rapid growth of industry, which is highly intensive in its use of manpower, and the gradual closure of the agricultural frontier since the beginning of the 1980s, the agricultural sector continues to employ almost 50 % of the active population although its contribution to the GDP has dropped to less than 12 %. Although the sector has seen considerable growth over the last two decades (an average of 3 % per year between 1980 and 2000) its contribution to the GDP has seen a sharp decrease in the share from crops, linked with the drop in prices on the world markets, and a relative stability in other activities due to the performances of livestock and fishing. At the end of the 1990s we saw the trend reversed as a result of the 1997 crisis (see plates 40 Industrial product and 50 Product of tertiary sector) and a recovery in the prices of some export products (natural rubber).

10At the time of the 1990 census, agricultural households represented at national level more than half of all households. Their spatial distribution shows very clearly in reverse the processes of industriali-zation and urbanization in a series of concentric zones around Bangkok. The provinces adjoining the capital form a first ring where the rates of agricultural households are less than 24 %. In the South, the province of Phuket, where the economy has diversified rapidly as a result of the development of tourism, and to a lesser extent of industry, belongs to this class. A second ring includes the provinces stretching from Ratchaburi, to the west of the capital, to Saraburi, to the north, and to these is added the province of Chon Buri as a result of the creation of the industrial complex on the Eastern Seaboard. From this group, the proportion of agricultural households increases gradually towards the provinces in the south of the Central Plain and those in the east and the west while remaining lower than or close to the national average. In the North-East, the percentage of agricultural households is more than 65 % with the exception of the corridor formed by the three provinces of Nakhon Ratchasima, Khon Kaen and Udon Thani, where, since the end of the 1980s, the bulk of industrial and urban development is concentrated around the provin-cial centers and along the axes of communication. The North and the South have characteristics that contrast more sharply with the highly agricultural provinces (Nan, Patthalung), and with others where the effects of industrialization and urbanization are more striking (Chiang Mai, Lampang, Lamphun, Songkhla).

11The values produced from agricultural activities and the part that they represent in the Gross Provincial Product reveal a major imbalance between the South and the rest of the country. The South benefits from the high value added linked with the economy of the plantations (rubber trees, oil palms) and of the contribution of fishing to provincial products. With the exception of Phuket, the share of agricultural activities represents more than 30 % of the gross product (50 % and above in the provinces along the western coast). It was also in this region that agricultural products, under the combined effect of price increases and the development of fish-farming activities, registered, on average, the best performances between 1989 and 1996 as can be seen from the differences between provincial figures compared with the national average. The importance of tree crops (Trat), aquaculture or fishing (coastal provinces in the Center) accounts for the agricultural values produced in these provinces. In contrast, values produced are low in the North and the North-East. These regions remain for the most part characterized by agriculture with a modest rate of value added despite diversification phenomena which enable certain provinces to register agricultural product growth rates similar to the national average (Chiang Mai and Lamphun in the North, Mukdahan and several provinces around Nakhon Ratchasima in the North-East).

12The capacity of the agricultural sector to retain the active population of rural origin appears to be strong despite the low average income that it earns locally. As well as the recently acquired character of industrialization in the surrounding regions there are dynamics that are specific to the rural environment: agricultural workers employ economic diversification strategies, especially through multi-activity, which are guided by their commitment to the land which remains strong; agrarian systems are flexible, thus allowing a rapid response to incentives from the agro-industries and world markets.

Plate 30 – Agricultural households and product

Pioneer agriculture undergoing diversification

13Agriculture in Thailand is unique in South-East Asia, in that it occupies at least 40 % of the entire country. The area under cultivation was first extended with the Bowring Treaty (1855) and this process accelerated after the Second World War (4 million hectares in 1940; 20 to 25 million hectares at the end of the 1980s) at the expense of forests. The expansion of rice cultivation, at first into the Central Plain then into the lowlands and valleys of the peripheral regions, was followed, after the 1950s, by the advance of the agricultural frontier onto the uplands as new cash crops were gradually introduced: cotton, maize, kenaf, cassava, sugar cane (see also plate 8 Environment and natural resources).

14This gradual spatial spread of the cultivated areas is the result of spontaneous colonization by individual agriculturalists, although the pioneer move-ment was supported by the state through land tax concessions and settlement programs in some frontier zones or zones occupied by ethnic minorities. Drain-age and irrigation work at first facilitated expansion of the area under rice farming. After the 1950s, culti-vation of the uplands was given impetus by the cons-truction of road infrastructure and the adoption of the new cash crops (which were more profitable than rice) benefited from the role played by the networks of Sino-Thai middlemen (provision of inputs, credit, transport, agricultural extension).

15The distribution of the provinces into classes defined according to the major types of land use expresses the combined effects of the duration of land development and the importance of topographical constraints (see plate 7 Relief and hydrographical system). Agricultural land predominates in the alluvial plain of the Chao Phraya, the cradle of rice cultivation, and in the irrigated valleys in the North-East (class 5). In the provinces where uplands and valley bottoms alternate, the situation is more contrasted (class 4): agricultural land occupies between 35 and 65 % of the total area, the remainder being shared between forest land and unclassified land, the latter taken up by built-up areas and the communication axes. The pioneer nature of agricultural development is demonstrated by the rapid retreat of the forests, which are now of relative importance only in the provinces that extend over the mountain chains in the north and west and in the peninsula (classes 2 and 3). In the Central Plain delta the predominance of unclassified land (class 1) reflects the influence of built-up areas in Bangkok’s extended urban region.

16The changes in land use between 1978 and 1995 show a strong advance of urbanized areas in two main directions from this metropolitan region: northwards as far as Lop Buri and out to the Eastern Seaboard in Chon Buri (class 1). This process continued further north in a more diffuse fashion as far as Chiang Rai and west to Phetchaburi (class 2). During this period the proportion of agricultural land in class 3 remained stable, while the unclassified lands were developed to the detriment of the forests. In class 4 and 5, the increase in the percentage of land given over to agriculture suggests that the agricultural frontier was closed here at a later date, or even that active land colonization still continues (South).

17Paddy fields represent about 50 % of the total cultivable land at national level (see plate 33 Rice), with a high concentration in the Central Plain and the valleys in the North-East (class 1). They are still a major type of agricultural land use in most of the provinces in the North, the North-East and the Center, associated with fruit tree cultivation (class 3) or upland crops: cassava, maize, sugar cane (class 2). Rice cultivation systems become marginal only in the peninsula and the south-east, where there are zones of tree crop plantations (rubber and fruit trees, oil palms; classes 5 and 6; see also plate 64 Agriculture in North-East and South), and in the mountainous provinces on the central axis and the western axis (other crops; class 4). Since 1978 the proportion of paddy fields has been in constant decline: although this decrease has not been so great in the zones that benefit from irrigation or abundant rainfall (class 1), it has been very marked in areas where rice cultivation is more marginal. This reduction reflects the current difficulties encountered by the paddy farmers (price, availability and cost of the labor force) and the effects of new diversification into more intensive and more profitable production, with encouragement from the agro-industry companies through contract farming (flowers, vegetables, fruit trees) or from the public authorities (oil palms in the South, rubber trees in the North-East).

Plate 31 – Land utilization

Irrigation: correction of climatic fluctuations and stimulation of agricultural production

18Despite a policy of sustained development of irrigation infrastructure since the 1950s, Thai agriculture remains very much exposed to seasonal climatic fluctuations. Rainfall rates represent a real ecological constraint for rice cultivation which, during the monsoon season, requires extra irrigation, even in the wettest areas (see plate 8 Environment and natural resources).

19In 1996, 4.6 million hectares are classified as irrigated by the Ministry of Agriculture and Co-operatives, or 23 % of the total cultivable land, but there are great regional disparities: 46 % of the total irrigated area is located in the Center, 26 % in the North, 17 % in the North-East and 10 % in the South. This refers to the extension of specially built perimeters where a regular water supply depends largely on the nature of hydro-agricultural infrastructure. The enclosed areas fed by the major dams may receive sufficient quantities of water for complementary irrigation in the rainy season, however, there are vast stretches of land, mapped as irrigable, that are dependent on much more modest reservoirs and whose water supply relies on the strength of the monsoon, and is more unpredic-table; the North-East, where annual variations in rainfall are greatest, is thus the most disadvantaged region. The slim possibilities of growing irrigated crops in the dry season accentuate regional disparities: thus only 8 % of paddy fields are cultivated twice a year (but 40 % in the Center, 14 % in the North, 4 % in the South and 1 % in the North-East).

20In the 1950s, the state completed the first large-scale irrigation schemes in the Central Plain, using external funding (American aid, loans from the World Bank) to support rice production and exportation. The first two Plans (1961-1966, 1967-1971) placed the development of irrigation at the heart of the govern-ment’s agricultural policy. Public investment gave priority to the development of the most favorable sites with the best cost/efficiency ratio. Large multi-purpose dams allowed the development of electricity produc-tion and irrigation of the lowlands on the Central Plain, the traditional rice granary of the country that has benefited since the end of the 19^th century from a good drainage network (see plate 7 Relief and hydrogra-phical system). In 1970, out of more than 2 million irrigated hectares, 70 % were in the Center (15 % in the North, 10 % in the North-East and 4 % in the South). However, the implementation of irrigation facilities encountered many technical defects and difficulties (insufficient capacity of the reservoirs, lack of funds to complete construction, faulty design, poor maintenance arrangements or ineffective organization of distribution systems, strong opposition from farmers threatened with ejection).

21The basins of the North have a long history of communal irrigation and water control. The absence of this tradition slowed the rhythm of adoption of irrigated rice cultivation in some areas of the Central Plain and resulted in an unreliable water supply to the plots. The implementation of irrigation schemes in the North-East encountered substantial problems due to the emergence of conflicts between irrigated and rainfed agricultural systems. In the middle of the 1970s, policy shifted towards smaller and less costly structures in the underdeveloped regions (North-East) in order to allow farmers to benefit from the increase in rice prices. The total area of irrigated land reached 4 million hectares in the 1980s. Irrigation may still remain a declared priority of the government’s policy to provide aid for agriculture, but the accent from now on is placed on renovating and improving existing infrastructure rather than creating new ones.

22These improvements and the rapid development in the use of water pumps have made it possible to extend irrigated areas to 4.5 million hectares in the rainy season and to increase from 450,000 (at the end of the 1970s) to 750,000 the areas with two rice crops. Today, through a lack of new investment, the irrigated areas are stagnating and water management remains fairly inefficient (loss of water through seep-age, leaks, evaporation). The absence of any proper-ty rights over water means farmers have no incentive to use in a more rational and efficient way a commodity that is essentially free. Conceived as an aid to rice production, irrigation has not led to a real Green Revolution as there has been no wholesale adoption of a set of technical conditions (access to chemical inputs, credit facilities) in order to increase yields. Finally, the increasing demand for water for urban, industrial and recreational consumption poses the severe problem, in the dry season, of a sector allocation of resources, forcing farmers to turn towards less demanding crops (soybean, mungbean, sugar cane).

Plate 32 – Irrigation

Extensive rice cultivation despite the challenge from international competition

23Main staple food and foremost agricultural export crop, rice occupies 50 % of the total cultivable area and provides employment for about 70 % of the active agricultural population. Thailand is the fifth largest producer in the world and, for about ten years, has been the leading exporter (30 to 40 % of international trade).

24Over 80 % of the annual production of paddy (22 million tons in 1996) comes from major rice, covering more than 9 million hectares in the rainy season. The extent of the first crop in the North-East (55 % of the total national area) enables the region to provide 40 % of the country’s production. The paddy fields are concentrated in the valleys of the Khorat plateau, which stretches from Khon Kaen and Nakhon Ratchasima to Ubon Ratchathani and also in the valleys in the extreme north-east (see also plate 64 Agriculture in North-East and South): in ten provinces, paddy production in the rainy season covers over 65 % of the cultivable area and the Nakhon Ratchasima-Ubon Ratchathani axis is the main production zone. The second largest is in the Chao Phraya valley (around 80 % of the cultivable area in Nonthaburi, Ayutthaya, Ang Thong, Chai Nat). The provinces in the Center represent 17 % of the area cultivated in paddy, but produce about 30 % of the national total thanks to the size of the second crop (40 % of the surface area). Although yields are only modest, they are among the highest (almost 3 tons/ha and more than 4 tons/ha in major rice and second crop compared with 1.7 and 2.5 tons/ha in the North-East). The North represents 22 % of the total area grown under first crop for 26 % of production. In the South, rice cultivation is not widespread (less than 5 % of the national total is grown) except for the coastal valleys of the eastern provinces, from Nakhon Si Thammarat to Pattani (38 % of total cultivable area in Phatthalung).

25After the Bowring Treaty (1855) until the middle of the 20th century, rice cultivation was developed extensively, in response to demand from abroad. New land was put under cultivation, made possible by the growth in population, and was concentrated in the Central Plain (abundance of lowlands, transport facilities to the port of Bangkok for export) before extending North and North-East via the new rail and road infrastructure. From 1950 to 1970, the areas under paddy in the rainy season increased from 5.5 to over 7 million hectares, annual production doubled (from 6.7 to 13 million tons) thanks mainly to hydraulic developments from which the Central Plain was the first to benefit. From 1976 to 1996, the area under cultivation increased only slightly (600,000 ha) and unevenly across the territory. Cultivation advanced in the North-East (1.1 million ha were added: irrigation work continued and later closure of the agricultural frontier), the largest increases being found in the northern provinces. The crop increased to 180,000 hectares in the North, but decreased sharply in the South (down 100,000 ha) and especially in the Center (down 600,000 ha).

26Production reached 20 million tons in the middle of the 1980s. Although productivity increased as a result of mechanization specifically adapted to the small size of the plots (multi-purpose rotovators, threshing machines), the low distribution of high-yielding varieties and the levels of consumption of chemical fertilizers (the lowest in Asia) meant that there was no spectacular increase in yields (2.25 tons/ha on average for the two crops in the 1990s). Since the middle of the 1980s, the planted areas and production have remained stagnant for several reasons: colonization of land suitable for paddy-growing came to an end and there were cutbacks in public investment in irrigation, profitability decreased and there was diversification into other crops and competition with other sectors of the economy for resource allocation (workforce, water).

27Sixty per cent of the 15 million tons of rice produced are destined for the domestic market. The industrial implantations involved in rice transformation correspond for the most part to the major production zones, with nevertheless some high concentrations of investment in just a few large regional centers (Chachoengsao and Suphan Buri in the Center, Nakhon Ratchasima and Udon Thani in the North-East, Chiang Mai in the North). Exports include products of varying quality destined for a wide variety of markets: high quality white rice to China, Hong Kong, the United States, or poorer quality rice to Iran and Indonesia, broken rice to the African continent. Thailand is still in a strong position in the world market for the high quality types of rice that have made the country’s reputation, but today there is a great deal of competition to contend with from countries like Vietnam and India, which have the advantage of lower production costs.

Plate 33 – Rice

Sugar cane: between protectionism and the world market

28Despite its importance in Thailand’s economy and its position at the world level, the sugar industry is today characterized by poor sugar cane yields (about 50 tons/ha), only modest rates of sugar extraction (100 kg/ton of cane), and an industrial sector which is in debt, and with excess capacity.

29In 1996, sugar cane occupies around 1 million hectares with almost 50 % concentrated in the Ratchaburi-Suphan Buri-Kanchanaburi triangle and Lop Buri-Sukhothai arc. Kanchanaburi is the main producer for this crop: sugar cane covers 41 % of the total provincial cultivable area. The North-East as a whole represents one third of the total area planted with sugar cane, with no more than 13 % in Chaiyaphum and 10 % in Udon Thani, the first primary producer in this region. To the east of the capital, Chon Buri is distinguished by its planted area as well as by its percentage in the total cultivable area. Towards the south, the crop extends no further than Prachuap Khiri Khan.

30Sugar cane cultivation has encountered cyclical development. Exports of refined sugar were one of Thailand’s main sources of income in the 18^th century. Production for export was dominated by foreign companies and concentrated in the Chao Phraya delta, west of the capital. After the Bowring Treaty (1855) came into force, competition from Europe and changes in the tax system resulted in a rapid decline in the sugar sector in the last quarter of the 19^th century and most of the cultivable land in the Central Plain was turned over to paddy fields. Sugar cane has gra-dually been reintroduced since the 1930s, encouraged by public investment in new sugar mills and protec-tionist measures put in place by the state, in the context of the import substitution policy. Until the beginning of the 1970s, the increase in the area planted with sugar cane represented a response on the part of peasant agriculture to national demand. In 1976, Kanchanaburi, Suphan Buri, Ratchaburi and Nakhon Pathom cultivated more than 56 % of the total planted area, Chon Buri and Rayong, to the east of the capital, 20 %. Sugar cane was poorly developed in the North-East, where it was concentrated around new industrial plants (Udon Thani).

31The areas planted expanded between 1976 and 1996 by almost 160 %. From the heart of the production region, the crop extended along a northern axis towards Sukhothai and in particular towards the north-east as far as Udon Thani. This expansion was achieved by clearing uplands and was given impetus by agricultural policies encouraging diversification of products for export and spatial spreading of sugar plants with more favorable installation and operating costs than in the central region. Only the provinces of Chon Buri, Nakhon Pathom and Prachuap Khiri Khan showed a net and relative decrease in planted area between 1976 and 1996 and the proportion of sugar cane cultivated in Kanchanaburi dropped from about 50 % to 41 %, despite an increase of more than 10,000 hectares; this province remains, however, the main producer, as can be seen from the size and scale of its industrial plants.

32With production levels of 5 to 6 million tons at the end of the 1990s, of which about 75 % were exported, Thailand became the world’s fifth largest producer and third largest exporter of sugar. The value of these exports (1.335 billion US$ in 1996) makes sugar cane the third most important agricultural product in Thailand after rubber and rice. Asian markets absorb 70 % of total exports (of this almost half goes to Indonesia, Japan and South Korea).

33Government protection, introduced during the import substitution period, continued long after sugar became an export commodity, particularly as a result of lobbying by associations of sugar producers. Since 1982, a price stabilization program has been operated by the Thai Cane and Sugar Corporation, which represents the interests of the farmers, industrialists and the state. The sugar cane payment to the producers, which is fixed before the beginning of the crushing season, is based on a sharing system (70: 30) between growers and mill owners. This price is calculated on future net incomes from sales on domestic and foreign markets. The difference between the prices obtained on these markets and the price paid to the producers is absorbed by the Sugar Fund and the banks. Nevertheless, price fluctuations have tended to produce a succession of cycles of expansion and regression of this crop which has inhibited investment and intensification in the sector. The increase in industrial production costs over the last ten years and the cash-flow difficulties that companies are experiencing remain a serious problem for the entire sector.

Plate 34 – Sugar

Cassava maintained as cash crop on the uplands

34Typical cash crop of the North-East uplands, cassava is, in value terms, one of Thailand’s five foremost agricultural exports. Introduced from Malaysia at the beginning of the 20^th century into the southern provinces where it was grown as an inter-crop in most rubber tree plantations, the cultivation of cassava spread to all the provinces of the Kingdom before later becoming concentrated in the provinces to the east of the capital, then in the provinces of the North-East.

35In 1996, over 60 % of the cassava crop was planted in the North-East, with 21 % in the province of Nakhon Ratchasima alone, where this crop represents 22 % of the cultivable area. The seven eastern provinces of Bangkok are the second production zone with 20 % of the total area given over to cassava nationally (about 20 % of the total cultivable area in Chachoengsao, Chon Buri and Sa Kaeo). The area planted with cassava increased very rapidly until the end of the 1980s (14,000 ha en 1950, 475,000 ha in 1975, 1.6 million ha in 1989 with production at over 24 million tons) with an expansion from the eastern provinces towards the North-East. In 1975, the eastern provinces still represented 45 % of the total planted area. Chon Buri and Rayong, the foremost producers at the time, were also the most important centers for marketing and processing, especially as they received the crop produced in the neighboring provinces in the North-East. Although in terms of land use, cassava is still an important crop in the eastern provinces, it is very much in decline in the former production centers in this zone (more than 35,000 ha lost in both Chon Buri and Rayong).

36The cassava cultivated area expanded mainly in the North-East, from Nakhon Ratchasima-Chaiyaphum towards Udon Thani-Nong Khai to the north and towards Kalasin-Mukdahan to the east. It was also extended along the western and northern edges of the Central Plain, from Ratchaburi to Kamphaeng Phet and Phitsanulok. In the South, around Bangkok and in the provinces in the north-west, it has been gradually abandoned. The rapid expansion of the crop in the North-East during the 1970s and 1980s can be seen as a response on the part of small farmers to the increase in international demand. This development benefited considerably from the extension of credit facilities, marketing and processing services provided by Sino-Thai middlemen and formed part of the process of agricultural colonization of the uplands in this region (see plate 31 Land utilization). During the 1990s, total cultivated areas remained around 1.2 million hectares, with average production at about 20 million tons.

37Unlike most cassava-producing countries, Thailand has always grown cassava for commercial ends rather than for self-consumption. The roots are processed into two main products: pellets, used in the production of animal feed, and starch, modified starch and starch products, used in industry. Process-ing is carried out in a very wide variety of units, ranging from small village workshops producing cassava chips to modern enterprises extracting starch products, and requiring large-scale industrial investment. Spatial distribution of these units mirrors that of the production zones, with a predominance of the North-East around three major poles: Nakhon Ratchasima (1/3 of total national investment in relatively large units), Udon Thani, Khon Kaen. Ayutthaya, at the junction of the communication routes, does not produce cassava but stands out because of the scale of its modern factories, while to the east of the capital, Chacho-eng-sao, Chon Buri and Rayong also contain large production units.

38Pellet production expanded very quickly from the 1970s in response to the needs of European animal feed industries, the main outlet for exports. Faced with the reduction in quotas awarded to Thailand by the European Union (mid-1990s), indus-trial production was diversified into starch and modified starch products with a higher value added (and today this absorbs 60 % of the root crop production). These also supply national industries (paper, sweeteners, drinks, medicine tablets…) whose needs are increasing considerably. Out of a total cassava production of 18 million tons in 2002, the national market absorbed 5.6 million, of which more than one third was used in starch production, the remaining being mainly used for swine and cattle feeds. Thailand’s cassava exports (all types combined) represent about 80 % of the international cassava trade. The decrease in exports of pellets to the European Union (Netherlands, Spain) is compensated by the rapid rise in exports of starch and starch products to Asian countries (Japan, Taiwan, Korea).

Plate 35 – Cassava

Smallholders as the largest world producers of natural rubber

39Rubber cultivation was introduced into Thailand from Malaysia at the beginning of the 20^th century and developed rapidly in the South and in the eastern provinces of Bangkok. In the 1950s, rubber was the country’s second most valuable export commodity after rice. The total area under cultivation, estimated at 1.2 million hectares in 1966, reached almost 2 million hectares in 1996-1997. Rubber production is predominantly smallholder-based, consisting of about 820,000 small production units, with only 10 % of the landholdings larger than 40 hectares. Although farms are small in size (2.4 ha on average in 1996), rubber cultivation requires a large labor force, estimated at about 5 million, including tappers.

40After vigorous expansion until the middle of the 1980s, the area under cultivation in the South stabilized at around 1.6 million hectares. The region still produces an overwhelming proportion of the country’s rubber: 85 % of the total planted area in 1996 for 90 % of production, of which more than 60 % in the Songkhla, Surat Thani, Nakhon Si Thammarat, Trang and Narathiwat provinces. The south-east represents almost 9 % of national production. In these two regions, rubber tree cultivation now seems to have reached saturation point and over the last fifteen years some farmers, faced with a shortage of workers, have started substituting rubber for fruit trees. Plantations were developed in the North-East from the end of the 1980s after intervention from the state, which saw this potentially highly profitable crop as a means of developing rural areas. Few plantations are still productive, however, and yields remain low due to a chronic shortage of rainfall.

41In 1960, the state provided the incentive for a widespread replantation program to overcome the decline in a sector based on tapping ageing trees from traditional varieties. As well as encouraging growers to expand their crops, the Office of Rubber Replanting Aid Fund (ORRAF), funded initially by loans from the World Bank, then until 1985 by taxes on rubber exports and now from the state budget, provides improved varieties, equipment and fertilizer, and also financial aid, 70 % of which goes to smallholders (less than 4 ha). In conjunction with this, the first rubber research center (Rubber Research Institute of Thailand) was created at Hat Yai in 1965. Production increased from 170,000 tons in 1960 to over 2 million tons in 1996-1997 with an appreciable increase in yields (from about 350 kg/ha/yr in the 1960s to 1.3 t/ha/yr on average in 1996, over 1.5 tons in the most productive provinces in the South).

42Most of the peasant production is sold to dealers in the form of poor quality unsmoked rubber sheets and the market at national level is still fairly disorganized, with wide price variations linked with the quantities sold, the position of the dealers in the chain or the place of purchase. In order to enable small farmers to get better prices and to encourage improvements in the quality of their product, a rubber market auction system was set up for smallholders in 1991 with the establishment of the first central rubber market in Hat Yai. It also provides information on domestic and world market outlook and price trends. The marketing of latex has expanded since the middle of the 1980s from newly established latex concentrate factories. These units make possible a further value added transformation in large modern companies located in the main production areas (Songkhla, Surat Thani and Trang in the South region; Rayong and Chon Buri in the south-east). Running parallel to this, there is still a traditional industrial sector providing poor-quality intermediary products for the world market.

43Since 1991, Thailand has been the leader in world production and the largest exporter of natural rubber. Domestic consumption is only 10 % of national production. Almost half of exports are in the form of ribbed smoked sheets, about 30 % in the form of standard Thai rubber blocks and 10 % in the form of latex concentrate. With a value of over 2.5 billion US$ in 1996, natural rubber is the country’s leading agro-based export. The Asian market represents 60 % of this total with almost 30 % to Japan and 20 % to China where national production is growing rapidly. The quality of national production and the variation in prices on the world market are major problems, however. Disappointed in attempts by the International Natural Rubber Organization (INRO created in 1980) to stabilize the world market by adjusting supply, Thailand left this organization in 1999 and has since tried to develop a combined strategy with Indonesia and Malaysia (these three countries represent 80 % of world production) in an attempt to maintain prices that are favorable for the producers.

Plate 36 – Rubber

Difficulties in meeting domestic requirements in maize, mungbean and soybean

44Traditionally grown by small subsistence farmers for self-consumption, maize became a major crop in Thailand only after the Second World War, in response to the demand from foreign markets, especially Japanese animal feed industries. With the prospect of profit from growing maize, farmers were persuaded to expand the cultivation of new imported varieties by clearing forests in the lower North: the crop rapidly extended to the Central Plain uplands, chiefly in the Lop Buri, Saraburi and Nakhon Sawan provinces which are most favorably located in relation to the port of Bangkok from where most of the crop is exported.

45In 1947, maize production covered 23,000 hectares, increasing to 200,000 hectares at the end of the 1950s and 1.3 million hectares in 1976, 75 % of which was in the area sometimes dubbed the “corn belt” (Loei, Phetchabun, Nakhon Sawan, Lop Buri, Saraburi and Nakhon Ratchasima). The crop reached its maximum area in the middle of the 1980s (almost 2 million ha) then stabilized around 1.3 million hectares. In these provinces, maize still covers more than 30 % of the total planted area despite the major drop in planting between 1976 and 1996, in favor mainly of cassava and sugar cane: Lop Buri and especially Phetchabun and Loei, where the proportion of planted area given over to maize cultivation dropped to just over 20 %, remain the major production areas. Together with Sa Kaeo in the south-east and Kamphaeng Phet and Tak in the west, provinces where maize production has increased considerably since 1976, the “corn belt” today produces almost 70 % of the total national crop. In the country as a whole, the decrease in planted areas over the last twenty years in the heart of the region of production has been compensated for by the expansion of the crop around the north, west and south-east edges.

46Soybean and mungbean can be grown as the first or second crop of the rainy season on the uplands, or in paddy fields in the dry season with irrigation. The planted area increased from 20,000 and 40,000 hectares respectively in 1950 to 100,000 and 200,000 hectares on average at the beginning of the 1970s. Although these crops increased considerably until the end of the 1980s (500,000 ha each), today they cover only 300,000 and 350,000 hectares. As with maize, this decrease reflects fluctuations in the price and profitability of the different crops that can be grown on a plot and, in the case of soybean, the effects of competition from foreign producers. The combined planted area for the two crops increased between 1976 and 1996 in the provinces between Tak, Nan, Khon Kaen and Uthai Thani; Sukhothai is the excep-tion, although a decrease in the proportion of these crops and the planted area they occupy has not threatened its strong position. More than 80 % of the national production of mungbean comes from the quadrilateral enclosed by Sukhothai, Uthai Thani, Lop Buri and Phetchabun, where it can occupy up to 15 % of the cultivable area (Sukhothai, Phetchabun). Soybean cultivation has gradually extended from the northern provinces to the north of the Central Plain and to a lesser extent into the North-East (Loei, Khon Kaen, Chaiyaphum) and south-east (Sa Kaeo). In about half of the area under cultivation, it is a dry season crop planted on the irrigated perimeters, and is encouraged by the state as a rice substitution crop. The North remains the main region of production (70 % of the national total in 1996). 20 % of national production is consumed immediately, 70 % is used in the oil factories and 10 % for seed.

47Thailand’s mungbean production (218,000 tons in 1996/1997) is barely sufficient to cover domestic requirements and exports, which reached almost 150,000 tons in 1990, but were limited in 1997 to under 10,000 tons. Maize and soybean production is now insufficient to meet the country’s needs. At the beginning of the 1980s, maize exports (2 to 3.7 million tons), which went mainly to the Asian market, represented 80 % of national production. The reason for the very large increase in domestic consumption (less than 1 million tons in the 1980s compared with more than 4 million tons ten years later) is the increase in the requirements of the animal farming sector, forcing Thailand to import (about 400,000 tons in 1995 and 1996). Similarly, soybean production (360,000 t in 1996/1997) today supplies less than 40 % of domestic demand. The practice of introducing high prices (via taxes and import quotas) to promote the development of this crop has not had the hoped for effect on production and has led to an increase in the price of animal feed. Sporadic intervention by the state, which is widely criticized by the agro-industry sector, has resulted in a loss of competitivity for the poultry industry, especially against competition from China for the Japanese market.

Plate 37 – Other Crops

Recent development of intensive breeding activities and shrimp farming

48The production of swine, chicken and shrimp, traditional farming activities, has evolved into specialized systems, and is now an integral part of the activities of the major Thai agro-industrial groups. The extent of direct involvement of these firms in all stages of production and marketing is strong even though it may vary according to the different sectors. These companies have also organized contract farming systems whereby producers are provided with all the inputs.

49The development of broiler production was rapid from the 1970s onwards, with the importation of chicken breeds and the introduction of wage and price guarantee contracts by Charoen Phokphand, an animal feed producer. National production is now controlled by just a few agro-industrial groups. Two thirds of the total output of 1.2 million tons is destined for the domestic market. The largest production area is concentrated around Bangkok: Lop Buri, Ayutthaya, Saraburi in the Central Plain, Samut Sakhon and Ratchaburi to the west, Chon Buri, Prachin Buri, Chachoengsao and Nakhon Nayok to the east. These eastern provinces produce more than 40 % of broilers. The spatial distribution of production in the peripheral regions (less than 10 % each of production), differs between the North and the North-East, where production is notably greater in the urban poles, and the South where it is more evenly spread between the provinces (food habits). Thailand is the leading exporter in Asia by export value (544 million US$ in 2001) and half of these exports are destined for Asia (especially Japan). Faced with competition from Brazil and China, the high price of feed (see plate 37 Other crops) and the increased cost of labor, agro-industrial groups are diversifying their production (from boneless parts to cooked products) and investing abroad (see plate 1 Economic relations and integration).

50Commercial swine production represents about 80 % of total pork production. The modernization of this sector in the 1980s, traditionally associated with rice-growing, was in response to a large increase in domestic demand (improvement of the standards of living among urban dwellers), with considerable impetus from major agro-industrial groups: vertical integration and economic concentration in swine production are nevertheless less developed than in the other two sectors. There is also a lesser degree of imbalance in the spatial distribution of this activity throughout the country, despite the fact that 40 % of production is concentrated in seven provinces surrounding the Bangkok Metropolitan Region (BMR), reflecting the influence of the urban market and the presence of major production units. The North-East (Nakhon Ratchasima, Buri Ram) and the North (Chiang Mai, Chiang Rai) both contribute about 20 % of national production, while the South produces considerably less (different food habits). The fluctua-tions in the price of meat, like the changes in the food preferences of the middle classes (beef and broiler), lead to large fluctuations in animal numbers. Produc-tion barely covers domestic demand because of cyclical problems (indebtedness of peasant units, epidemics, cost of animal feed).

51It was also in the 1980s that intensive shrimp farming techniques were developed in the coastal provinces. Between 1980 and the 1990s, the area given over to this activity increased from 25,000 hectares to more than 70,000 hectares (20,000 farms), production rose from less than 10,000 tons to 200-250,000 tons. In the traditional production areas (Bangkok, Samut Prakan, Samut Songkhram, Samut Sakhon) this type of farming is today very much in decline (pollution, urbanization), but in the provinces in the south-west and especially to the east of Bangkok and in the South, it is now increasing. Since the middle of the 1990s, the South and the eastern provinces of the BMR represent over 90 % of national shrimp production, but for several reasons this figure has tended to stagnate: productivity gains have reached a plateau, shrimp farming has been abandoned in some coastal areas due to self pollution and land degradation, and the recent development of inland shrimp farming in the Central Plain was officially banned in 1998 due to opposition from rice growers (see also plate 62 Land use in the South: Pak Phanang watershed). Shrimps are the third most valuable agricultural export product (about 150,000 tons, especially in the form of frozen shrimps). The main markets are Asia, which takes more than half (Japan), the United States and the European Union. As for exports of broiler chickens, Thailand must improve sanitary conditions in its factories (traces of forbidden chemical substances), and adapt to changes in customs barriers (European Union) and increasing competition from the Asian countries (India, Indonesia) in which Thai groups invest.

Plate 38 – Recent Breeding and Shrimp farming activities

Clear regional specializations and socio-economic disparities for an agriculture in transition

52Despite recent diversification, agriculture is marked by regional specializations in productions and by major socio-economic imbalances. After more than a century of sustained growth based on the expansion of cultivated areas, the agricultural sector today has to tackle the growing shortage of resources (water, land, labor force), the increasing threat from international competition, and the impact of poverty in many rural areas (see plate 66 Income and consumption indicators).

53Only the most discriminating variables of the principal component analysis are shown in the legend tables. The map of agricultural specializations highlights groups of provinces that are homogeneous and affected in different ways by the modification of land use and the diversification of productions. In the Chao Phraya delta, agriculture is in competition with other economic sectors for access to resources (class 1). Irrigated rice cultivation predominates but is in decline, in favor of crops for the metropolitan market (market gardening produce, tree crops). The effects of urban growth can also be seen, to a lesser extent, in the surrounding provinces and in some provinces on the Eastern Seaboard (class 2). The proximity of export infrastructure and the size of the markets have favored the development of new productions that are highly integrated into agro-industry and are added to the more traditional crops (rice and upland crops).

54The provinces in the northern Central Plain and the central mountain axis define class 3, close to the average, yet with an appreciable increase in upland crops destined for agro-industry (animal feed, oil mills). Diversification, also linked with the development of highly specialized breeding, can be found in the forest provinces in the North (class 6). The valleys and the low altitude terraces in the North-East make up the country’s other major rice-growing region (class 4). The low profit to be gained from rice cultivation and the varied physical environment have been instrumental in encouraging local diversification (see also plate 61 Land use in the North-East: Sakon Nakhon province). The other part of the North-East (class 5) is dominated by upland crops: cassava, sugar cane; with sugar cane predominating extensively in the western provinces (class 7). The peninsula and the south-east are characterized by having only a small proportion of land given over to rice cultivation and a marked specialization in perennial tree crops (rubber trees, oil palms, fruit trees), which is developing steadily (class 8).

55The map of the socio-economic characteristics of the agricultural sector shows clear spatial disparities linked with the different degrees of redeployment of this agriculture in transition. A first group is made up of provinces that are affected by the strong influence of Bangkok’s urban agglomeration and the Eastern Seaboard (classes 1 and 2). This zone is character-ized by intensive productions and attracts a large proportion of agro-industrial investment. The growing shortage of agricultural lands accompanied by land speculation have led to a definite decrease in the number of farms and agricultural workers. This decrease is accompanied by processes that are more marked than in the rest of the country: concentration of land (especially in class 1), development of land renting, conversion of land for non-agricultural use. Changes in landholding structures bring class 3 nearer to this group: farms are large in size but agriculture brings in lower incomes. Class 4, close to the national average for all the variables treated, covers a large part of the Center and the North.

56The majority of provinces in the North-East, and a few in the north and the west, form class 5 which is characterized by the increase in the number of farms, the decrease in their size, and the modest level of value added: non-agricultural income (local employ-ment or migration) is important in order to support families in rural areas. The last three classes emerge as particularly dynamic agricultural regions. The provinces on the eastern side of the peninsula (Phatthalung excluded) and Nakhon Ratchasima in the North-East form class 6 which can be distinguished by its high agricultural product per capita and large contribution to the national agricultural product, linked with productions of greater value added. In classes 7 and 8 the pressure on agricultural land is not so strong (land colonization still active in the peninsula) and there is a high level of value added per capita (especially for Ranong the only province in class 8).

Plate 39 – Agricultural specialization and socio-economic features