Market openings under a farm agreement of the Asean Economic Community have impacted farm products in Thailand, partly due to market access and rising competition from neighbouring countries, according to TDRI research finding.
Asean agreed to waive import tariffs starting in 2010 until 2015 on most farm products while some sensitive products remain protected until the end of 2018.
After market liberalisation, Thailand does better relatively in sugar cane plantation and sugar production, free-contaminated vegetables and chicken production. However, it does badly in productions of shrimp, animal maize and cow milk.
The products that Thailand cannot improve or does not fare worse are rice and palm oil production.
Rising labour cost and land prices have contributed to a drop of Thailand’s competitiveness compared with other Asean countries, especially Vietnam.
“Thailand needs to introduce new technology into farm production and needs new breed of younger workers as ageing farmers retire, ” said Nipon Poapongsakorn, head of research team.
Smart farmers need to incorporate new technology such as a drone to monitor crop and to disease outbreak, he said.
China has started to recruit young farmers to replace aging farmers and Thailand could learn from China, he said.
“While government should not focus on prices of farm products since it is likely to be politicised when government promise higher prices of farm product,” he said.
Vietnam and other Asean countries have started to do better in many products as they introduce market mechanism and export more to global market.
Vietnam does very well in shrimp production and it could compete with Thailand in major markets such as United States, the European countries and Japan.
The researchers have proposed that the government iberalise import of animal maize which will support poultry industry and encourage farmers to shift to grow other crops.
Young farmers are urged to work closely with universities and other research facilities in order to improve their productivity.
After the 10-nation Asean agreed to open farm market, intra-trade of farm products has increased substantially. Exports of farm products among Asean country countries rose to $28.4 billion in 2015, which was up from $3.1 billion in 2001.
While import of farm products also rose to $22.1 billion in 2015, which was up from 2.7 billion in 2001.
However, ratio of intra-Asean trade of farm products is still low, exports of farm product among Asean countries was at 23 per cent compared with 77 per cent of Asean’s farm product exports to the rest of the world.
Members including Thailand still impose non-tariff barriers on farm goods from other Asean countries, according to TDRI.
About the author
Thailand Business News covers the latest economic, market, investment, real-estate and financial news from Thailand and Asean. It also features topics such as tourism, stocks, banking, aviation, property, and more.