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Thais eat rice, and rice paddies eat Thailand's forests

By All the articles in this section were writtenClayton Jonesbusiness correspondent of The Christian Science Monitor. / March 23, 1982



Ayutthaya, Thailand

The government pulled the plug on TV viewers in Thailand two years ago. Stations were ordered off the air during prime time. The reason: Water levels behind power dams had dropped, in large part because of fast runoff of rain from denuded forests.

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Who was stripping Thailand's jungle?

It was land-hungry farmers so poor that it was easier for them to rip up virgin forests for new fields than to find money to invest in the new crops, fertilizers, or machinery needed to raise productivity of existing fields.

The nation's agricultural dilemma had hit home - almost every home with a television set. (The TV ban still holds.)

Thailand, with less than one-third of its 200,000 square miles still covered with trees, could lose its forests by the mid-1990s at the present rate of deforestation -- an estimated 3,800 square miles a year.

Thai officials now realize that farm productivity must rise at least 4 percent a year on present lands to keep rural incomes rising -- and trees from falling.

By 1986, if yields do not rise, officials predict that Thailand's success in reducing rural poverty will come to an end, and the incomes of more farmers will slip below the $200-a-year poverty line. An estimated 11 million people, or 23 percent of the population, already qualify.

Three-quarters of Thailand's people live on farms, producing 26 percent of the gross national product. Rice accounts for 62 percent of farm yields, with maize, soy, fruit, and rubber also regular crops.

As other nations have raised their rice harvests to near self-sufficient levels, Thailand's exports have steadily fallen. The traditional image of the smiling Thai farmer tilling his paddy in Asia's rice bowl may be changing.

Thailand lives with a glut of food. This year it will again be a top producer of rice (almost 3 million tons), a producer of an ever-larger maize crop, and the world's leading tapioca grower and exporter (about 6 million tons).

But with reduced world demand, its farmers are stuck with low prices. Thailand is one of the few developing countries with a food surplus that must compete on world markets with exports of of high-productivity developed nations.

Thus, with a land the size of Texas or France, Thailand must now turn from extensive to intensive farming. Dr. Anat Arbhabhirom, recently minister of agriculture, says Thailand could potentially feed itself on one-quarter of the land it now uses for farming. ''It depends on the market incentives.''

In five areas Thailand has made some progress in transforming the centuries-old style of farming:

* Pricing: A price guarantee program for rice is eating a hole in the national budget -- about $300 million so far -but is thought almost impossible to end for political reasons.

''It is difficult to enable farmers to sell their paddy rice at the guaranteed price. And we have to admit the fact,'' stated Prime Minister Prem Tinsulanonda publicly.

Thailand, perhaps the only nation which puts restraints on many exports, lifted export restrictions on rice in the last few months to help keep domestic prices high.

Other longer-term suggestions include setting up a commodities futures market to help stabilize prices and expanding a fledgling crop-insurance program.

Another way out is to reduce farmers costs of production:

* The basics: Even though new high-yielding seeds have been around for 20 years, many farms still do not have, or cannot afford, two essential ingredients: irrigation and fertilizer. Only 14 to 16 percent of the country's potentially irrigable fields are actually irrigated.

Thailand will be able to supply cheaper fertilizer from its new natural gas supplies sometime after 1986. Production is expected to be 1 million tons of urea; the present farmer demand of 800,000 tons is expected to rise to 1.2 million tons. Natural gas could stimulate rural progress in general.

* Credit: Like many Asian nations, Thailand has tried to force commercial banks to give loans to farmers.

For five years, The Bank of Thailand has gradually increased the required presence of banks in rural areas.

This year, 11 percent of the value of each bank's loans must be for agriculture, and 2 percent must be for agribusinesses, such as tractor manufacturers. All banks are also required to open rural branches.

For two years, the banks missed the target and were penalized by being forced to buy government bonds. Last year banks loaned out $1.6 billion with an 80 percent repayment rate -- good by Asian standards.

To egg the banks on, the Bank of Thailand has started sending its people into the fields to get bankers to talk with extension agents and farmers, instead of waiting for well-off farmers to walk into their office.

* Agribusiness: The role of private firms in rural development is not fully accepted yet, but such companies as CP Group (Charoen Pokphand Company) are opening doors.

* New crops: The government is trying to ease farmers' vulnerability in world markets by diversifying away from rice and cassava (tapioca) and into mung beans , dairy cattle, wheat, tea, cotton, and coconut. The World Bank has helped cassava farmers plant rubber trees.

If it all works, maybe the forests will grow back, the dam waters will rise, and prime-time television will return.