Report No. 3705a-THt Thailand Program and Policy Priorities for an Agncultural Economy in Transition (In Four Volumes) Volume IV: Annexes 6-9 (Including the Statistical Annex) December 3, 1982 Projects Department East Asia and Pacific Regional Office FOR OFFICIAL USE ONLY Document of the 'brId Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS $1 = B (Baht) 23 B 1 = $0.04 METRIC EQUIVALENTS 1 hectare (ha) - 2.47 acres = 6.25 rai 1 meter (m) - 3.28 feet 1 kilometer (km) - 0.62 mile 1 kilogram (kg) - 2.2 pounds THAI FISCAL YEAR October 1 - September 30 ABBREVIATIONS ALRO - Agricultural Land Reform Office ARD - Office of Accelerated Rural Development, Ministry of Interior BAAC - Bank for Agriculture and Agricultural Cooperatives BOB - Bureau of the Budget DF - Department of Fisheries DLD - Department of Livestock Development DOA - Department of Agriculture DOAE - Department of Agricultural Extension LD - Land Department LDD - Land Development Department MOAC - Ministry of Agriculture and Cooperatives MOF - Marketing Organization of Farmers NESDB - National Economic and Social Development Board OAE - Office of Agricultural Economics RFD - Royal Forestry Department RID - Royal Irrigation Department RTG - Royal Thai Government SD - Seed Division (DOAE) SEP - Seed Exchange Program STK - Sor Tor Kor ("right to farm" certificates) T&V - Training and Visits Systems FOR OFFICIAL USE ONLY THAILAND PROGRM- AND POLICY PRIORITIES FOR AN AGRICULTURAL ECONOMY IN TRANSITION TABLE OF CONTENTS VOLUME I: THE OVERVIEW Page No. PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . tv) I. INTRODUCTION AND SUMMARY. 1 II. PAST PERFORMANCE AND EMERGING PROBLEMS . . . . . . . . . . . . 3 The 1960s. 4 The 1970s. 4 Other Effects of Growth . . . . . . . . . . . . . . . . . 5 III. PROSPECTS FOR AGRICULTURE IN THE 1980s . . . . . . . . . . . . 6 Expected Growth and Effects . . . . . . . . . . . . . . . 6 Possible Constraints to Growth . . . . . . . . . . . . . . 8 IV. RECOMMENDED POLICIES AND PROGRAMS . . . . . . . . . . . . . . 11 The Roles of Government and the Private Sector . . . . . . 11 Pricing, Marketing and Regulatory Policies . . . . . . . . 12 Land Tenure Policies and Programs . . . . . . . . . . . . 13 Priority Support Services and Programs . . . . . . . . . . 14 Area/Rural Development .17 Future Sector/Policy Analyses . . . . . . . . . . . . . . 17 ATTACHMENT I . . . . . . . . . . .-. . . . . . . . . . . . . . . . 19 Selected Performance Indicators .... . . . . . . . . . . . . . . 19 VOLUME II: THE GENERAL REPORT I. INTRODUCTION .... . . . . . . . . . . . . . . . . . . . . 1 II. THE ROLE ANID PERFORMANCE OF THE AGRICULTURAL SECTOR . . . . . 2 A. The Role of Agriculture. 2 General Sector Performance . . . . . . . . . . . . . . . 2 Production and Export Diversification . . . . . . . . . . 3 Terms of Trade and Real Agricultural GDP Developments . . 7 Agriculture and Employment . . . . . . . . . . . . . . . 9 Agriculture and Poverty Alleviation . . . . . . . . . . . 12 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. - ii - Page No. B. Crop Expansion and the Transition Process . . . . . . . 14 Expansion of the Cultivated Area . . . . . . . . . . 14 Intensification of Agricultural Production - The Transition . . . .. . . . . . . . . . . . . . . . 16 C. The Relative Roles of the Private and Public Sectors . 20 III. PROGRAM AND POLICY PRIORITIES FOR AGRICULTURAL INTENSIFICATION IN THE 1980s . . . . . . . . . . . . . . . 23 A. Introduction . . . . . . . ... . . . . . . 23 B. Pricing, Marketing and Regulatory Policies . . . . . . 25 Rice . . . . . . . . ... . . . . . . . . . . . . . 27 Rubber . . . . . . .. . . . . . . . . . . . . . . . . 28 Feedstuffs . . . . .. . . . . . . . . . . . . . . . . 29 Livestock . . . . . .. ... . . . . . . . . . . . . . 29 Price Support and Stabilization . . . . . . . . . . . 30 C. Land Tenure and Development Policies and Programs . . . 30 D. Improving Priority Support Services and Programs . . 33 Agricultural Extensicta and Research . . . . . . . . . 34 Short- to Medium-term Recommendations . . . . . . . . 35 Improved Seed Production and Distribution . . . . . . 35 Increased Fertilizer Usage . . . . . . . . . . . . . 37 Pest and Disease Control . . . . . . . . . . . . . . 39 Improved Cropping Techniques . . . . . . . . . . . . 410 Agricultural Credit Services . . . . . . . . , . . . 410 E. Medium- to Long-term Recommendations . . . .. . . . 41 Crop Research . . . . . . . . . . . . . . . . . . . . 4'2 Livestock and Fodder Improvement . . . . . . 4. . . .4'2 Land Reclamation and Improvement . . . . . . ,, . . . 43 Irrigation Development . . . . . . . . . . . , . . . 44 F. Program Development and Coordination . . . . 45 IV. REACHING THE RURAL POOR . . . . . . . . . . . . . . . . . . 48 The Rural Poor . . ........ .. . . 48 Government's Rural Development Strategy . . . . . . . . . 4'3 Government Programs . . . . . . . . . . . . . . . . . 50 Production-oriented Programs. . . . . . . . . . . . 51 Growth vs. Equity . . . . . . . . . . . . . . . . . . . . 53 - iii - Page No. V. SUBSECTOR PERFORMANCE IN THE 1980s . . . . . . . . . . . . . 54 A. Introduction .... . . . . . . . . . . . . . . . . . 54 B. Market Prospects ... . . . . . . . . . . . . . . . . 54 C. Agricultural Growth Prospects . . . . . . . . . . . . . 55 Crop Sector Prospects ... . . 56 Livestock Prospects ... . . 58 Prospects of Other Agricultural Sectors . . . . . . . 59 D. Prospects for Employment and Poverty Alleviation . . . 59 VI. PREINVESTMENT STUDIES ANT) PROGRAM/PROJECT SUPPORT . . . . . . 62 A. Future Sector/Policy Analyses . . . . . . . . . . . . . 62 B. Project Possibilities for External Assistance . . . . . 63 Productivity Improvement . . . . . . . . . . . . . . 64 Diversifying Agricultural Income Sources . . . . . . 64 Land Use, Conservation and Development . . . . . . . 65 Area/Rural Development . . . . . . . . . . . . . . . 65 APPENDICES 1. Institutional Development for Agriculture . . . . . . . . . . . 67 2. Agricultural Constraints in Perspective . . . . . . . . . . . . 73 3. Opportunities for Area Expansion and Yield Increase . . . . . . 81 4. Priority Programs for Intensification and Yield Increase . . . 86 5. Agricultural Growth Prospects for the Fifth Development Plan Period (1981-86) and Beyond (to 1990) . . 88 CHART WB 23075 - Organizational Chart of Government Agencies Involved in Agricultural Development in Thailand . . . . . . . . . . . . . . 72 MAP IBRD 15912 - Thailand: Sub-Regions, Agro-Ecological Zones and Per Capita Income IBRD 16316 - Thailand: Forest Reserves VOLUME III ANNEX 1: Rice Production - Constraints; Programs and Prospects . . 1 ANNEX 2: Feed Grain Production - Constraints, Programs and Prospects . . . . . . . . . . . . . . . . . . . . . . . 55 -iv - Page No. ANNEX 3: Oil Seeds and Beans Production - Performance, Programns and Prospects ... . . . . . . . . . . . . . . . . . . 84 ANNEX 4: Cash Crops Production - Performance and Prospects . . . . 100 AINEX 5: Rainfed Agriculture Profiles and Programs for the Northeast and Upper North . . . . . . . . . . . . . . . 113 VOLUME IV ANNEX 6: The Supply and Distribution of Inputs 1 ANNEX 7: Development of Tree Crops 38 ANNEX 8: Livestock Development 111 ANNEX 9: Statistical Annex 185 (v) PREFACE 1. This report presents the findings of a mission which visited Thailand in March 1981, at the request of the Royal Thai Government (RTG) to analyze the program and policy priorities needed to facilitate agricultural growth with equity in the 1980s. Government comments have been incorporated following intensive discussions of the report in Thailand from October 12-18, 1982. 2. The mission comprised of: Choeng-Hoy Chung (Chief); Dipak DasGupta, Ken Sigrist (Bank Staff); Abdul Awan and Heye Groenewold (FAO/CP); Philip Judd and H.T. Chang (Consultants). Substantial assistance was provided by line agencies of the Royal Thai Government (particularly the National Economic and Social Development Board, the Office of Agricultural Economics, and the Departments of Agriculture, Agricultural Extension, Livestock and Fisheries). Patricia Brereton and Jeremy Drew (Bank Staff), and Paul Harrison (Consultant) also provided useful inputs. 3. While the coverage of the study is very broad, the primary focus of the mission was to (a) assess the problems and constraints to increasing cropping intensity and yields; and (b) evaluate the effectiveness of produc- tion-oriented programs undertaken by key line-agencies of the Ministry of Agriculture and Cooperatives. Particular attention was also paid to under- standing the agricultural risks of typical rainfed farmers, the opportunities for furthering the transfer of improved technology to them, and the extent joint initiatives with the private sector can be furthered. 4. The scope and format of the report may be summarized with respect to the following categories of readers: (a) those interested in broad policy and program priorities and the missions main recommendations, for whom an overview (Volume I) is provided; (b) those interested in more background with respect to relevant subsector policies and programs (not included in the overview), for whom the general report (Volune II) is provided; and (c) those interested in detailed background statistics, technical information, evaluation of programs and detailed discussion of recommendations, for whom the Annexes are provided. 5. Within the above framework, it is hoped that the dialogue between the Bank and the Royal Thai government at the policy, program and project levels can be strengthened, and that the role of the Bank and other foreign donors in assisting agricultural development can be more clearly defined. ANNEX 6 THAILAND PROGRAM AND POLICY PRIORITIES FOR AN AGRICULTURAL ECONOMY IN TRANSITION The Supply and Distribution of Inputs Table of Contents Page No. I. INTRODUCTION .... . . . . . . . . . . . . . . . . . . . . . . 2 II. IMPROVED SEEDS- PRODUCTION AND DISTRIBUTION . . . . . . . . . . 2 A. The Roles of the Private Sector and Government . . . . . . . 3 B. Ongoing and Planned Seed Production/Distribution Programs. . 4 Government Programs . . . . . . . . . . . . . . . . . . . 4 Private Sector . . . .. 8 C. Evaluation of Seed Production and Distribution Programs. . . 9 D. Recommendations . . . . . . . . . . . . . . . . . . . . . . 11 III. FERTILIZER USE AND DISTRIBUTION . . . . . . . . . . . . . . . . 14 A. Fertilizer Consumption ... . . . . ..... . . . . . . . 14 B. Marketing and Distribution . . . . . . . . . . . . . . . . . 17 C. Government Involvement in Fertilizer Promotion . . . . . . . 18 D. Recommendations. . . . . . . . . . . . . . . . . . . . . . . 19 IV. USE OF PESTICIDES AND INSECTICIDES . . . . . . . . . . . . . . . 20 A. Pest and Disease Incidence ..20 B. Pesticide Use. . . . . . . . . . . . . . . . . . . . . . . . 21 C. Institutions ..22 D. Current Programs and Constraints . . . . . . . . . . . . . . 23 E. Recommendations. . . . . . . . . . . . . . . . . . . . . . . 24 TABLES 1. Seed Development Project: Original Targets, Actual Production and Revised Targets, 1976-82 . . . . . . . . . . . . . . . . . . . 26 2. Seed Multiplication, Processing and Distribution Flow Chart 27 3. Criteria of the Seed Division (SD) for Selecting Contract Seed Growers ..28 4. Seed Quality Standard ..29 5. Seed Prices and Margins, 1981. . . . . . . . . . . . . . . . . . . 30 6. Projected Seed Exchange - Flow Chart . . . . . . . . . . . . . . . 31 7. Rice Varieties Recommended for Each Region . . . . . . . . . . . . 32 8. Fertilizer Use and Rice Yields for Selected Countries in Asia . . 33 9. Fertilizer Use, by Crop and by Region . . . . . . . . . . . . . . 34 10. Effect of Fertilizer Use - Benefit/Cost Ratios . . . . . . . . . . 35 11. Apparent Fertilizer Consumption, 1966-78 . . . . . . . . . . . . . 36 12. Fertilizer (16-20-0) Price Margins and Importer Profits - 1979 . . 37 - 2 - ANNEX 6 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES I. INTRODUCTION 1.01 Intensification of agriculture in Thailand will greatly depend on increased use of inputs, particularly improved seeds, fertilizers and pesticides, which will help to boost production on lands already cultivated. The constraints to wider use of these inputs are discussed in this annex, and recommendations to correct the most pressing problems are offered. II. IMPROVED SEEDS - PRODUCTION AND DISTRIBUTION 2.01 The role of improved seeds in increasing farm yield and production is dependent on three factors: (a) the availability of improved varieties (from research) that are adapted to typical farm conditions; (b) the innate deterioration characteristics of the different types of seed and their costs; and (c) the risk-reducing practices farmers adopt to compensate for the latter constraint. 2.02 The limiting factor is thes development of improved varieties that can produce obvious yield and incremental income benefits under typical farm conditions, rather than under optimal experimental conditions. Widely accepted improved varieties include rice varieties (RDI, RD3 and RD7) for irrigated areas and certain multiples cropping varieties like Sojo (soybean), U-Thong (mungbean) and Tainan (peanuat) for more favorable areas. The limited success of other varieties reflects the tendency for Government, until recently, to select and breed field crop varieties under well watered, high fertility conditions and to place heavy emphasis on yield perfonrance at the expense of drought resistance, shorit duration, and resistance to pests and diseases - all important characteristics for the rainfed farmer to achievIe a reasonable and stable yield. Also, with present adverse fertilizer/product price ratios, farmers have little incentive to use fertilizers or adopt a higher input management system to allow the improved varieties to manifest their potential. For details of fertilizer use, see Chapter III below. 2.03 Once improved varieties are developed, they usually spread quitte quickly through traditional channels (traders, country shopkeepers and master farmers). The informal channels of seed distribution are far more important than government channels, which distribute only l%/i of total /1 The current situation is indicated by the following estimates of seed production and use for major field crops in 1979. Government Seed Estimated Seed Production as Production (ton) Usage (ton) % of usage Rice 1,297 353,400 Less than 1 Corn 800 38,000 2 Sorghum 75 4,720 2 Soybean 285 4,080 7 Mungbean 40 10,600 Less than 1 Peanut 400 12,000 3 2,987 442,800 1 -3- ANNEX 6 Page 2 seed used, but are less important than farmers producing their own seeds for planting, the extent of which varies with the type of crop according to its storability and innate vigor./l 2.04 In general, the deterioration of seeds (and thus quality variation) is most serious for the legume crops (soybean, groundnuts, mungbean), less serious for corn and sorghum, and least serious for rice. Hence support services to supply improved seed to the farmer are more critical for the legumes./2 The costs of seeds for planting, therefore, tend to be highest for the legume seeds and lowest for rice. Rice and other cereal farmers are also usually able to minimize the impact of uncertain germination of their seeds by planting more than the recommended levels,/3 but such an approach to minimizing rislc for the legumes is much more costly. Thus it is more for the legume crops (especially groundnut) that the cost of seed and its supply and distribution constitute important constraints. 2.05 For the cereals, once the appropriate improved varieties are available, it is then critical to inject an "adequate" supply of good quality seeds into the existing distribution system. The exceptional cases requiring closer distribution to the final users would be certain rice varieties in extreme flooded and drought-prone areas, salt-tolerant varieties and brown planthopper-resistant rice varieties (e.g., RD9) in some susceptible double-cropped areas. For the legume seeds, Government may need to expand its distribution role. A. The Roles of the Private Sector and Government 2.06 In the past two years, the private sector has substantially increased its role in acquiring, producing, multiplying and processing improved seeds (and even undertaking research), particularly for corn and sorghum. The emergence of four such companies has increased commercial /1 For example, a recent survey by the Office of Agricultural Economics, MOAC, indicates that about 80% of rice farmers keep their own seed and grow "local varieties." Data collected by the Department of Agriculture indicate that only about 30% of corn growers are using the improved (downy mildew-resistant) corn variety, Suwan I. /2 In the case of soybean, the private sector has obviated the problem of prolonged and expensive storage by developing a system whereby seed grown in the Lower North under rainfed conditions (and harvested in October) is transferred to irrigated areas for December planting in the Upper North. The seed harvested there in March-April is then trans- ferred back to rainfed areas for the May-July planting. /3 For example, the typical corn grower uses 5 kg of seed per rai, rather than the recommended rate of 3 kg for good seeds. -4- ANNEX 6 Page 3 production of improved corn varietiLes (Suwan I and II and some i mported hybrids) from insignificant amounts in 1978 to about 2,200 tons in 1981 (compared to Government's production of about 800 tons). Produc:ers in thie major corn areas are now reportedly able to select at: least three types of improved seeds at country shops (all at different prices, which are higher than the prices of equivalent government-distributed seeds). Without effective policy, regulations and inspection services, the system may we:Ll be susceptible to exploitation by unscrupulous dealers, especially if the volume further accelerates. 2.07 Government's role in improved seed production and mult iplication, through the Seed Division in the Department of Agricultural Extension (DOAE), has been expanding steadily with the assistance of USAID. While there are logistical problems (and probable quality decline) in expanding the rate beyond a maximum capacity of 5,000 tons p.a. (para. 2.16), the present standard of seeds leaving the seed centers is generally satisfactory. The main problem has arisen from the inefficient distribution of seeds to the final user by the Marketing Organization for Farmers (MOF), and the resul]ting large seed losses from poor storage and management (para. 2.22). 2.08 Government and private sector programs for seed production and distribution are described below, followed by an overall evaluation of their effectiveness and key recommendations to improve the situation. B. Ongoing and Planned Seed Production/Distribution Programs Government Programs 2.09 In the public sector, the Department of Agriculture (DOA) is responsible for producing breeder aLnd foundation seeds, while the Seed Division handles seed multiplicaticn for all field crops. Until, recently the MOF distributed most of the seetds multiplied by the Seed Division (except for a small proportion which is directly sold to farmers). The program received a boost in 1976 with the initiation of a USAID-financed Seed Development Project which provided for: four major seed centers located aLt Phitsanoluk, Lampang, Chainat and Korat, with substations at Chiengmai arLd Kalasin, plus equipment, staff training and technical assistance. Due to delays in establishing the Seed Division, initiating construction and procuring equipment, the centers were not completed and functioning until. 1980. Following a review of the project by USAID in March 1980, original production targets for the period FY80-82 (Table 1) were revised downward. Despite the delays, the project has had a useful impact. Commencing in 1977, six types of seed have been produced (rice, corn, sorghum, groundnut, soybean and mungbean), with total seed production rising from 173 mt in 1976 to 3,225 mt in 1980. The project has also stimulated other donors to finance additional seed centers and has encouraged the private sector to play a larger role in the seed industry. - 5 - ANNEX 6 Page 4 2.10 Under the original project plan (Table 2), DOA and Kasetsart University were responsible for foundation seed production; DOA for the production of legume inoculum; the Seed Division was responsible for seed multiplication by contract farmers and for operating the Seed Centers; and the MOF handled the distribution and sale of seed. Some aspects of the program have worked reasonably well but the inoculum plant had not arrived by March 1981, and distribution of seed via the MOF has not proven to be satisfactory. Plans are underway to reorganize the Seed Division and Seed Centers from being commodity-based (rice, corn, etc.) to function-based (production, storage, shipping, quality control) with emphasis on redirecting the seed program from being mainly a technical operation to one with a balanced emphasis of technology and business management. 2.11 The current criteria for selecting seed growers is outlined in Table 3, current seed quality standards are set out in Table 4, and seed prices and margins at various stages of production are set out in Table 5. The Seed Division has received approval to appoint 15-16 seed inspectors to each Seed Center to supervise 300-500 rai of cereal grain seed production or 300 rai of legume seed production each. They will be responsible for selecting and supervising seed growers, selecting seedlots with the required standard for purchase, making payments to growers and arranging shipment of seed to the Seed Centers. The quality and quantity of acceptable seedlots produced by contract seed growers will have an important bearing on the quantity, quality and cost of seed produced by the Seed Centers each season. Seed is currently being sold at prices well below production cost, leading to a rapid depletion of working capital provided under the USAID program. It is essential that the Seed Division make a full and accurate costing, and set the price of seed at a level which will not discourage the private sector from expanding its participation in the seed production industry. 2.12 In addition to the USAID project, Japan has financed the construc- tion of a corn seed center at Lopburi with a capacity of 500 mt p.a. The EEC has apparently agreed to finance the construction of at least one rice seed center in Southern Thailand with a capacity of 500 mt p.a. A USAID Mission which visited Thailand in March 1981 has prepared a proposal for 12 new seed centers, four in the North (Phayao, Phrae, Kamphangphet and Nakon Sawan), six in the Northeast (Surin, Ubon, Khonkhaen, Udon, Sakon Nakhon and Roi et), one at Chacoengsao and one in the western portion of the Central Plain. Each center would have the capacity to process 1,000-1,500 mt of rice seed per year, and the production of other field crop seeds according to need. If all proposed seed centers come into production, they will have a combined capacity of about 20,000 tons of rice seed per year. Assuming that farmers would change their seed at least once every four years, this production would meet about 15% of requirements. -6- ANNEX 6 Page 5 2.13 Proposals for the Five-Year Plan. Government-s main new initia- tive for the Five-Year Development Plan is the introduction of a Seed Exchange Program (SEP) directed by MOAC. The objective of SEP is to accelerate the replacement of low-yielding native rice varieties, which many farmers still grow, with recommended improved varieties. More specifically the program is designed to: (a) replace short-grain glutinous extension varieties with non- glutinous varieties in the Northeast; (b) replace low-yielding native non-glutinous varieties with high- yielding non-glutinous varieties in the South; (c) replace native varieties on all irrigated farms with non- glutinous extension varieties; and (d) replace broadcast varieties in major rice-producing areas with transplanted non-glutinous extension varieties where possible. The rationale for SEP is as follows: (a) low-income farmers will not use improved seeds of recommended varieties if actual outlay is involved, but they would do so if the seeds were offered for exchange with common paddy on a one-to-one barter basis; (b) a seed exchange program would speed up the adoption of improved rice varieties and assist in increasing the yield and income of farmers and the national rice production; and (c) the program could be effective in helping the poverty section of the rural community. 2.14 The program would be implemented via a Rice Seed Improvement Board under the chairmanship of the Undersecretary of State for Agriculture and comprised of key Directors General at the national level, and by a Changwad Seed Exchange Committee, under the chairmanship of the Governor at the changwad level. The DOAE and DOA would be responsible for providing seed for the program. This would be drawn from the Department's ongoing seed pro- duction programs, and DOAE would be empowered to purchase seed from farmers growing recommended varieties, identified by field extension personnel. A projected seed exchange flow chart indicating the production flow and the target areas is presented in Table 6. The recommended extension varieti,es by region are listed in Table 7. In 1981 it is anticipated that DOAE andl DOA could make available 1,330 mt of good seed of recommended varieties to distribute to seed growers for 200,000 rai. It is projected that production would be about 53,000 mt, of which Government would buy about 25,000 mt for distribution in the seed exchange program to plant 5 million ra-iL in 1982. In addition, DOAE would be expected to identify 9,250 rai of crops of the recommended varieties in 1981 to facilitate the purchase and use of about 3,500 mt of seed for multiplication in 1982 and seed exchange in 1983. -7- ANNEX 6 Page 6 2.15 The MOAC approved a budget of B 73.6 million for the first stage stage of the program which is reliant on DOAE and DOA seed production, and B 69.4 million for the second stage program commencing 1981, when farmers' seed is used to a greater extent for multiplication and distribution. About 85% of the funds would be allocated for seed procurement, with the remainder for operations. Funds received from the sale of common paddy collected in the seed exchange process would be used to finance the 1982 program. Deficits would be met by allocations from the "Farmers' Aid Fund" derived from the rice premium levied against rice exports. Non-glutinous paddy seed will be procured at B 3,800 per ton and glutinous paddy at B 3,500 per ton. Operating costs are estimated at B 880 per ton, giving a total cost of B 4,680 per ton for non-glutinous paddy seed distributed to the farmer. At this rate, total costs of the 1981 and 1982 program would be about B 134 million from an allocation of B 143 million, leaving about B 10 million for contingencies. 2.16 In March 1981, final details of the program had not been worked out and targets may have to be revised. Key problems to be resolved are as follows: (a) maintenance of satisfactory quality of seed to be exchanged, and the logistics and methods of operations to collect, dry, clean, store, package, test and distribute the 25,000 tons of seed targeted for 1981/82. The DOAE has only enough trained seed inspectors to handle 5,000 tons of seed and the seed centers' production capacity is only for about 3,000 tons. Without adequate quality control, Government could find itself in the position of distributing poor quality seeds, and undermining farmers- confidence in the government seed production program and the value of good seed of the recommended variety; (b) planning the production, distribution and storage of quality seeds to meet the individual requirements of amphurs and tambons. Since much effort could be wasted unless varieties acceptable to farmers were supplied, the demand in terms of varieties and quantity should be determined for each tambon or amphur before setting up the program; (c) procedures to ensure the quality of common paddy exchanged for good seed. Field staff are likely to receive common paddy having varying levels of contamination and moisture content and a mix of varieties. Unless criteria for acceptance are clearly set out and provisions made for testing, drying and storage at the receiving points, Government could incur heavy financial losses (via spoilage, weight loss and difficulties in milling); and (d) the whole program is highly dependent on the assumption that recommended varieties will perform much better than the varieties now being used by the farmer, under his typical management -8- ANNEX 6 Page 7 conditions. This may not always be the case, especially if cheap N and P fertilizers are not made available to allow HYVs to show their true potential. 2.17 A program has been initiated recently to provide 10 ton capacity communal village paddy stores for poor areas in 37 Changwads. The concept is to conserve 5 tons for use as seed and 5 tons as reserve food supply for years when there is severe drought or flooding. Private Sector 2.18 Several private companies are now engaged in seed production, processing and distribution. One of the oldest is Charoen Phokphand (CP) which started as a vegetable seed importer in 1921 but which now has 57 companies in the CP group involved in grains, seeds, agricultural inputs, pig and poultry raising and meat processing. Three of its companies are in the seed business. The Chai Thai Seed and Agricultural Co. Limited claims to have 70% of the market for imported vegetable seed and 30% of the market for locally produced vegetable seeds. It has its own vegetable seed pro- cessing plant at Amnoi, with facilities for drying, cleaning, grading, dressing, packaging, cold storage and seed testing. The company plans to contract rice seed growers for a total area of 4,000 ha within a radius of 150 km of its processing plant, using one agricultural college graduate to supervise about 200 ha and arrange supply and proper use of inputs. The Bangkok Seed Industry Co. Ltd., es-tablished in 1980, has a large seed pro- cessing plant at Lopburi in the corn belt. It is initially producing and processing Suwan I corn seed, using farmers as contract growers, supervised by company field staff. Output was 600 mt in 1980 and is targetted at 1,500 tons in 1981; its seed is sold for B 10-15 per kg. If feasibility studies are promising, hybrid sorghum seed (Dekalb) and groundnut and soybean will also be produced. The CP company is in a position to buy up corn and other feed grains for use in its livestock feed mills. The Charoen Seed Company runs a 70 ha research farm, half of which is used for research and the other half for the production of foundation seeds of promising new varieties. It receives and evaluates breeding lines of corn and sorghum from the Dekalb Company (Illinois), the Department, of Agriculture and Thai universities, and has its own crossing, evaluation a,nd selection program both on the farm and at selected regional centers. It conducts research and evaluation on other crops according to the need of sister companies. 2.19 The Cargill Company commenced corn seed production and distribution in 1980, and put 130 mt of Suwan 1 seed on the market. Cargill sold to dealers at B 8 per kg, and dealers sold to farmers at about B 11.5 per kg. In 1981 these prices will be raised to B 11.5 and B 13 per kg, respectively, and the production/marketing target is 600 mt of corn seed. The company has a 5 ha research farm and leases land for foundation seed production. It is testing downy mildew-resistant hybrid lines supplied by its parent compaLny in Minneapolis. Cargill is also in the corn grain market and is in a position -9- ANNEX 6 Page 8 to purchase corn from growers purchasing company seeds. The Pacific Seed Company is an affiliate of the Continental Overseas Corporation of Australia, which operates in Thailand. Pacific Seed has bypassed the Suwan I and II lines and has moved directly into testing, producing and marketing hybrid corn and sorghum. Trial programs were initiated in 1973, and in 1980, 30 tons of hybrid sorghum and 50 tons of hybrid corn seed were produced. A hybrid corn, Pacific 9, and three hybrid sorghum varieties (Gold Finger, Tropics and Monsoon) show most promise. The company also plans to produce and market sunflower seeds in the future. The parent company buys corn and sorghum on the Thai market. Other foreign companies operating in Thailand include Sime Derby, which is working on groundnut, and the Desert Seed Company of California, which is involved in vegetable seed. 2.20 All companies rely on selected dealers in rural towns to market the seeds. DOAE would probably have to use the same system if it were to take over from the MOF responsibility for seed distribution and marketing of government-produced seeds. C. Evaluation of Seed Production and Distribution Programs 2.21 Good progress has been made in the past five years to improve the capacity of the public sector to produce good quality seed of the major field crops. There has also been an encouraging response from the private sector in terms of corn seed production. However, there is still a large gap between farmers' seed use and the amount of "improved" seeds produced by institutional sources, and many problems need to be resolved before a viable seed industry can be established in Thailand. With few exceptions, there is a lack of strong farmer demand for "good quality" seed. This can be attributed to the strong tradition of maintaining seed supplies on the farm; lack of convincing evidence that good seed gives higher yield; lack of clear evidence that some of the recommended crop varieties are superior to the local variety under the typical level of farm management; the high price of some seeds at planting time and a general reluctance to spend cash for seed in a rainfed environment, where crop yield and returns are not certain. The rather poor quality of some extension seed supplies prior to the recently initiated seed production programs also tended to undermine confidence in the value of new seed. In other cases, the high price of NP fertilizer in relation to product price and risk has discouraged the use of fertilizers on nitrogen-responsive varieties under rainfed conditions, with the result that potential yield differences between the new and local varieties were not always realized, e.g., Suwan I corn. In the past, some of the crop selection and breeding programs have been oriented toward producing HIYVs, with too little emphasis on the production of high stability varieties (HSVs) which will give a moderately higher but more stable yield under rainfed conditions without high inputs. - 10 - ANNEX 6 Page 9 2.22 As the amount of improved seed made available from all sources only represents a fraction of total usage, there is currently no effective competition among suppliers. Further, Government has imposed no regulations regarding introduction, testing and marketing of new imported crop varieties, has given no guidelines on prices and margins and is not geared to routinely police the quality and prices of private sector seed. Unless these problems are addressed effectively, there could be considerable confusion at the field level with regard to quality and price of seed, and the future of a viable private seed sector could be undermined. As the situation now stands, a country dealer can offer three grades and prices of seeds (primarily corn): (a) unchecked standard market grain (the traditional source of seed); (b) DOAE seeds (with confirmed quality at a slightly higher but subsidized price); and (c) private company seeds (at even higher prices which reflect the true cost of production, processing, storage, packaging and marketing). Without effective policy, regulations and inspection services, the system will be open to exploitation by unscrupulous dealers, and farmers confidence to invest in good seed will be undermined. 2.23 In the past the Marketing Organization of Farmers had a virtual monopoly on distributing certified seeds provided by the Seed Division for government projects, to farmer groups and in sales to farmers. It also procured market seeds (labelled "extra-project seeds") for resale. Except for some seeds which it sold through its own distribution network (primarily in Bangkok), it essentially acted as an "order-taker" in that it collected the requests from government projects (including DOAE-s) and farmer-s organizations and passed them on to the relevant seed multiplication centers. The buyers then had to pick up the seeds directly from the centers or through the governmental Express Transport Organizatiion. Hence MOE added little to the distribution process. The quality of extra-project seed was questioned, particularly seed directly handled by MOF. Procedures for purchase of government seeds are, in any case, cumbersome and very little information is given to the public concerning types of seeds and quantities available. Streamlining the system is critical for a successful seed exchange program. The MOF has now withdrawn from distribution and DOAE is developing its own distribution network which would include MOF as one of it's clients (see Table 2). 2.24 While ongoing government programs have been successful in increasing the volume of good quality seed available, they do not appear to have been adequately geared to specific priorities or production programs and areas. This has compounded problems of field storage and distri- bution. At the same time Government's objectives and policies are not very clear with regard to the future role of the public and private sector, seed pricing, and the regulation of the seed industry. There appears to be too little coordination between the private sector and Government in determining priorities and responsibilities in ongoing varietal improvement and seed production and distribution programs. In concept, the proposed Seed Exchange Program is an excellent way of exposing farmers to the value of good see!d and recommended varieties, as a basis for creating a steady demland necesisary - 11 - ANNEX 6 Page 10 to support a viable seed industry. However, success will be largely dependent on supplying high quality seed and the recommended varieties out- performing local varieties under typical farm conditions. With current proposals, there is a real danger of not meeting these two basic criteria, which would embarrass Government and undermine farmers confidence. The very ambitious program could place too much strain on existing personnel in DOAE and lead to the distribution of poor quality seed. Furthermore, there appears to be no firm field evidence that all the varieties recommended for rainfed conditions will outperform local varieties under typical farmer management conditions in the majority of cases. in view of these problems, the existing gap between seed usage and production, limited government resources, and the obvious willingness of the private sector to participate, it would be an appropriate time for Government to make an in-depth review of seed production and varietal improvement programs and revise its policy for the next five-year plan. D. Recommendations 2.25 On the basis of mission observations, the following points might be considered in formulating revised policies and programs: (a) As it will be many years before the majority of farmers have access to and use high grade seed, give priority to educating them via the extension service regarding selection, storage and simple testing of farr-produced seed to improve performance. (b) Distribute and evaluate good seed of recommended varieties under a seed exchange program at the tambon level, but present it as an evaluation program until sound data are obtained regarding the yield advantage of recommended varieties and good seed at the correct seeding rate under typical farm conditions. This would provide a sound basis for planning a larger seed exchange program in the future. To ensure good seed quality, it would be wise to restrict the program to the expected capacity of the ongoing seed production programs. Wide coverage could be achieved immediately by allocating only small amounts of recommended varieties to every tambon. If the variety is good, farmers will disseminate it among themselves, and a useful move toward wider use of recommended varieties will have been achieved with minimum risk and cost to Government. For the first phase of the program, DOAE might consider working with progressive farmers and farmer groups to achieve a good evaluation and maximum impact. One rai of each recommended variety might be compared with one rat of the most commonly grown local variety under typical farmer methods and under recommended extension methods to compare yield, cost of production, and return. Extension - 12 - AINNEX 6 Page 11 officers would report on the results in standard format, with provision for noting any major technical, social, or etconomic constraint to the adoption of recommended varieties arLd the likely demand in the future. Over two to three seasons, there would be valuable feedback for plant breeders and a sound basis for planning seed production and an expanded seed exchange program for the future. (c) Seed production programs should be planned to meet the requirements of the above type of program, and other priority areas where good production gains can definitely be achieved by increasing seed supply. Mission observations indicate that apart from the proposed rice seed exchange and evaluation program, priority should be given to increasing supplies of good seed of soybean, groundnut, brown planthopper-resistant rice varieties, mungbean, and sorghum, for areas where expansion in the planted area is sought. (d) Priority should be given to establishing and maintaining revolving regional stocks of good quality seed of appropriate crops and varieties for areas subject to frequent flocd or drought, to ensure timely provision of good seed when emergency replanting is required. This requirement could be accommodated by extending the village rice store program (para. 2.17) into all areas frequently affected by flood or drought. (e) Measures should be taken to ensure that varietal improvement programs for rainfed crops are oriented more toward producing high stability varieties (HSV) which can stabilize yield and outperform native varieties under typical farm conditions. Key characteristics that should be given priority include short duration, drought resistance and improved resistance to insects and disease. Shorter duration varieties would pave the way for increased cropping intensity over an appreciable area. Rainfedl rice and legume crops with the greatest potential for incorpor-- ation into cropping systems should be given the highest priority. (f) Early action should be taken: to determine the grades of seed that should be sold to farmers via dealer outlets; to establish a viable regulatory unit; to constantly check quality and price and enforce agreed standards; and to establish a farmer education program via posters displayed in all seed retailers' stores setting out the standards. There appears to be a need to establish minimum standards for "common seed" which is likely to constitute a large part of the market for many years. (g) There is a need to review with the private sector the costs of production, processing, storage and marketing with a view (i) to establishing profitable (but not excessive) prices and - 13 - ANNEX 6 Page 12 margins in the private sector; and (ii) to ensure that government seed prices are set at a level which will not undermine or discourage private sector involvement in seed production and that revolving funds for DOAE to purchase seed from growers are not depleted to the point where seed processing plant can only be used at 50% capacity as at present. (h) With the private sector now beginning to play an important role in the selection of improved varieties and the multi- plication and distribution of seed, this would be an appropriate time to establish a National Crop Improvement and Seed Production Body with representatives from the public and private sector. Such a body could play a valuable role in improving liaison and coordinating the activities of the two sectors and advising Government on appropriate policies and programs to achieve the establishment and maintenance of a viable seed industry. 2.26 Presumably, the long-term objective would be to give the private sector the main responsibility for the commercial aspects of seed production, processing and distribution, with Government playing the key role in deter- mining national policy and program priorities, effectively regulating the industry and making a major contribution to research and the development of new varieties. However, until (a) there are superior varieties for the majority of situations, (b) farmers have been educated to the value of good seed, and (c) a strong continuing demand has been established, there will be several crops and areas of operation which will be unattractive to the private sector. For these, Government will have to play the key role in seed production for some time. The challenge is to determine the appropriate mix of private and public sector involvement in seed production and establish it in a way which will ensure a progressive and smooth transfer of responsi- bilities to the private sector. A National Crop Improvement and Seed pro- duction Body (para. 2.24 (h)) could well be the medium for making practical recommendations to Government on this topic. 2.27 For the short term, Government should clearly take the lead in: (a) educating farmers to the virtues of good seed; (b) evaluating improved varieties; (c) developing and releasing of new varieties; (d) producing breeder and foundation seed; (e) multiplying seeds of crops currently not attractive to the private sector; and (f) establishing of effective regulatory body to regulate quality and monitor prices at all stages of development, production and distribution (both in the public and private sectors). It should also play a key role in assessing and forecasting the demand for specific crops and varieties by region, and coordinating private and public sector seed production programs to meet the projected demand. Government should not establish further facilities for seed production and processing for crops and areas already being successfully handled by the private sector (e.g., corn) before checking whether the private sector can meet the demand. The private sector should be encouraged to further develop its ongoing seed production and processing programs, and should be given full responsibility for all seed distribution, following guidelines set by - 14 - ANNEX 6 Page 13 Government with regard to priority areas and subject to effective government inspection at all stages of marketing. There are good possibilities that the private sector could effectively promote some new crop varieties, e.g. Suwan I corn, and raise yield appreciably by offering farmers a production contract and credit package, covering land preparation, fertilizer and pest control. Government should investigate such an approach with the private sector. If it appeared viable, Government could materially assist by making available cheap sources of N and P, and providing credit - in kind - via BAAC for farmers willing to produce under contract to reputable companies. III. FERTILIZER USE AND DISTRIBUTION A. Fertilizer Consumption 3.01 Thailand has one of the lowest levels of fertilizer use in Asia, in terms of average consumption per unit of cultivated area. This poses a basic constraint to growth in yield for most major crops. Current yield levels are already low both in relation to potential yields achievable with greater fertilizer use under local agroeconomic conditions,/l and in relation to yield levels recorded in neighboring countries (see Table 8 for data on fertilizer consumption and rice yields in selected Asian countries). For future agricultural growth and intensification in Thailand, greater use of fertilizer will be of critical importance. 3.02 In 1979, total fertilizer use on crops was nearly 800,000 tons. About 62% of this was used in the Central and Lower North Regions, reflecting the relatively high proportion of irrigated lands and the more favorable rainfall regime in this area. The Northeast, South and Upper North Regions used 24%, 9% and 5%, respectively. Data indicate that about 55% of all fertilizer is applied to rice, about 25% to upland field crops (sugarcane, tobacco, cassava, cotton), and the balance to perennial tree crops and horticultural crops. However, of the 314,000 ton increase in fertilizer use between 1975 and 1979 (Table 9), about 75% was for rice (primarily in irrigated areas of the Central and Northeast regions. Very little fertilizer is used on corn, sorghum, groundnut, mungbean, soybean and kenaf. Table 9 gives recent estimated fertilizer consumption by region and crop.. 3.03 Crude estimates of fertilizer use on rice /2 indicate average application rates of 30-40 kg/ha in the Central and Northern Regions where /1 Average rice yield, for example, could be about 2.7 ton/ha, or about 40% higher than the present yield level of 1.9 ton/ha, largely as a result of increased use of fertilizer combined with other complementary measures. /2 Based on International Fertilizer Development Center (IFDC) data. See IFDC, Strategy for Fertilizer Development, October 1979. ANNEX 6 - 15 - Page 14 40-50% of the rice area is irrigated, and 20-25 kg/ha for the Northeast and South where only 5% and 20%, respectively, are irrigated. In the Central and Northern Regions fertilizer is commonly used for seedbeds, and field application is largely restricted to areas with reasonable water control where HYVs or lodging-resistant varieties can be grown; field application is highest on dry-season irrigated rice. No field fertilizer is used on flooded or deep-water rice areas. In rainfed areas of the Northeast, fertilizer is largely restricted to seedbeds, and field application (if undertaken) is limited to areas with reasonably reliable rainfall and no serious risk of flooding. 3.04 Estimates by IFDC for 1978 indicate that NP compounds constitute 44% of consumption, NPK compounds 30%, straight nitrogenous fertilizer 25% (principally ammonium sulphate, AS), and straight P and K fertilizers make up the balance. The percentage use of N, P and K was 50%, 40% and 10%, respectively. The principal form of fertilizer sold is 16:20:0 (ammophos). About 95% of NP compounds and 10% of ammonium sulphate were used on rice. About 75% of ammonium sulphate and 100% of 12:10:18 were used on sugar. In terms of nutrients, almost equal quantities of N and P are used on rice even though most soils are deficient in nitrogen. Furthermore, although there is little definitive data regarding the residual effects of P, various clues exist /1 which show that, other than the acid-sulphate zone of the Chao Phya Delta and some intensively cultivated soils (without fertilizer application), the lack of P is generally unlikely to be critical in increasing national yields for rice and cereals. The use of AS rather than urea as a source of straight nitrogen fertilizer is also puzzling since the equivalent nutrient cost of AS is 30-40% higher than that of urea, and sulphur deficient soils are very limited in Thailand. Representative fertilizer response data is presented in Table 10 along with the value/cost ratios achieved by using representative NP compound fertilizers or single nutrient fertilizers, e.g. urea (45% N), superphosphate (37% P205) and potassium chloride (60% K20) at current farm-gate prices. 3.05 Mixed fertilizers have attained a prominent role in Thailand largely due to the impact of Government's former policy of protecting the inefficient domestic nitrogenous fertilizer plant at Mae Moh. Between 1968 and 1974, the Government introduced certain protectionist /2 measures which: /1 Information on the soluble phosphate, potash and nitrogen contents of principle rivers show that the Chao Phya, Ta Chin and Mae Klong Rivers contain an average of about 30 kg of K20, 20 kg of P205 and 4 kg of N in each hectare-meter (8.1 acre ft) of water. K & P contents are generally constant but N content is erratic. /2 These measures included initial banning of imports of nitrogenous fertilizers, followed by granting of monopoly rights for importation of such fertilizer to the protected plant, to enable it to cover its losses by sales of imported fertilizers at high prices. ANNEX 6 - 16 - Page 15 (a) raised the domestic price of straight nitrogenous fertilizer (particu- larly urea) by about 66% above worlel market prices; and (b) induced the growth of private domestic fertilizeir firms which invested in facilities for the production of mixed fertilizers (based on imports of multi-component fertilizers) at relatively high costs and which promoted the use of such mixed fertilizers. As a result, at a time when low-cost straight fertilizers like urea became prominent in other countries, their use in Thailand was artificially restrained by high prices and by private sector promotion of alternative NP and NPK mixtures, particularly 16:20:0. By the time the Government revoked the protectionist measures in 1974, the private fertilizer importing and mixing firms had established their dominant role in the fertilizer industry (which continues to the present time) and farmer acceptance of mixed fertilizer and brand loyalty had become well establish[ed. At present, practically all imported urea is for industrial use, and very little is available to farmers for fertilizer. Domestic production of fertilizer (in 1977/78) accounted for less than 10% of total fertilizer consumption (Table 11). 3.06 Because of the high price of fertilizers (in absolute terms and in relation to output prices) fertilizer is now largely confined to irrigated and well-watered areas, where crop production risks are low (para. 3.03) and a value/cost ratio of as little as 1.5 could well be sufficient to induce fertilizer use by farmers. Consequently, about 50% of all fertilizer in Thailand is used on rice, and as the following table indicates, most of this goes to irrigated or more favorable rainfed paddy areas. For the major proportion of cultivated areas in Thailand where the risk is greater (e.g., lowland as well as upland areas with adverse rainfall conditions and/or inadequate water control) a higher value/cost ratio of at least 2.5 is necessary to induce fertilizer use. At present, this ratio is approached only for sugar, cassava and kenaf (see Table 12), which largely explains the relatively high use of fertilizer on sugar, increasing use on cassava /1 and negligible use on other upland and field crops. Naturally, if the value/cost ratio were changed by making low-cost straight fertilizers available (or by reducing the cost of mixed fertilizers), it is likely that fertilizer use could increase sharply. /1 According to the Thai Central Chemical Company, from relatively insigni- ficant amounts about four years ago, more than 80,000 tons of fertilizer (nearly 10% of its total sales) are now applied to cassava. ANNEX 6 Page 16 /a Area Fertilizer Total fertilizer ('000 ha) (kg/ha) ('000 ton) Irrigated: reasonable water control 1,000 156 156 Dry season: reasonable water control 500 190 95 Irrigated: inadequate water control 1,000 60 60 Favorable Rainfed 1,100 50 55 Seedbeds: total transplanted area 8,000 5 40 Total planted rice area 9,600 42 406 /a Ammonium phosphate. Source: OAE, RID and mission estimates. B. Marketing and Distribution 3.07 Thailand-s low level of fertilizer use is also attributable to several aspects of fertilizer marketing and distribution within the country, namely: (a) Although competition keeps the marketing margins of middlemen and traders within reasonable limits, there appear to be high profit margins for mixed fertilizers at the wholesale/importation level, which leads to high prices at the farm-gate level. According to the NESDB "Pricing and Marketing Study" (see Table 12), the price of 16:20:0 at the wholesale level is about 15% higher than the importation cost (c.i.f. prices plus other costs). The use of relatively high-cost raw materials in the production process (granulation plants) also may be a factor contributing to the high price of mixed fertilizers. (b) The fertilizer importing and mixing industry is highly oligopso- nistic, although some aspects of the industry are competitive. One firm, the Thai Central Chemical Company, accounts for about 50-70% of all imports, production and wholesale sales. The other importers are much smaller entities, but have joined together to form the Thai Fertilizer Importers Association in order to compete with the industry leader. They also have an established stake in perpetuating the inefficient industry structure since the cost of abandoning the traditional product range would be very high. (c) A proliferation of brand-name fertilizers and severe problems of quality control hamper effective fertilizer use. The emphasis - 18 - ANNEX 6 Page 17 on brand names has resulted in high marketing costs and posed considerable barriers to new firms entering the industry. In addition, farmers lack adequate knowledge to discriminate among brands according to nutrient content, while exhibiting a high degree of brand loyalty./L This is complicated by the fact that the nutritional content of a brand-name product is often downgraded in quality after the product has achieved wide acceptance by farmers./2 C. Government InvolveTnent in Fertilizer Promotion 3.08 Government-s lack of clear objectives and programs to deal with the critical area of fertilizer developrnent and use in Thailand is a:Lso partly responsible for the current low levels of fertilizer use. The Department of Agricultural Extension and other agencies have done little to evaluate the economics of fertilizer use, especially in terms of minimum cost--effective levels rather than optimal levels of application. More importantly, it has also failed to encourage the use of straight fertilizers (particularly urea). A number of reasons account for this situation. First, rmany of the official recommendations for rice are still based on experimenta'L data and field crop work done in the 1960s and early 1970s, when "taste-accepted" I-IYVs were barely introduced and ammonium sulphate and, particularly, ammonium phosphate were much cheaper than urea. Second, ammophos was also more easily stored and handled compared with urea which is hygroscopic. However, with pelleted urea/3 now available (and at a similar cost to regular urea), handling is no longer a problem. Third, little information on single nutrient response is available. 3.09 Although the Government is empowered under the Fertilizer Act oif 1975 to monitor and control unnecessary brand-name proliferation and ensure quality, it has taken little initial:ive in this regard. And most important, as a result of Government-s high export tax on rice and the consequently lower prices received by farmers, the fertilizer/rice price ratio in Thai:Land is the highest among Asian countries and further inhibits fertilizer use. 3.10 Government-s main effort to promote fertilizer use has been to subsidize total fertilizer sales (currently at a rate of about 20(%) and distribute this fertilizer through the Marketing Organization for Farmers (MOF). This has been ineffective for several reasons: /1 NESDB, "Pricing and Marketing Study," 1981. /2 This is often not done "illegally" in that the reduced nutrient content is shown in the new packages but the brand name and labelling is otherwise unchanged. /3 Urea coated with a material to prevent it absorbing moisture and caking. - 19 - ANNEX 6 Page 18 (a) although their sales amounted to about 13% of all fertilizer distributed (1977-79), MOF has a restricted distribution network, covering only a few areas. Only a relatively small proportion of sales is made directly to farmers; most sales are through cooperatives and other institutions via programs promoted by the Government. The MOF is also organizationally and administratively weak, and there are frequent delays in its supply of fertilizer to the various programs; (b) MOF has shown little interest in importing and distributing low-cost straight fertilizer in competition with the mixed fertilizer sold by private fertilizer firms. Instead, it has usually placed tenders with the private importers/distributors for the purchase of their mixed fertilizers, and as a result, MOF has, if anything, promoted the use of mixed fertilizers in Thailand by subsidizing their sale; and (c) MOF's sale of subsidized fertilizers has had little impact on the general level of fertilizer prices, and MOF has simply replaced private fertilizer sales. D. Recommendations 3.11 Based on the foregoing assessment, one of the most urgently needed means to improve productivity in Thailand is to reduce the farm cost of fertilizer application by substantially increasing the availability of single nutrient fertilizer and thus doubling incremental value/cost ratios for many crops. To achieve this, the Government would have to: (a) "persuade" fertilizer firms (which have hitherto been reluctant to promote single nutrient use because it could undercut their stranglehold on, and reduce the demand for, mixed fertilizers) to make more urea and superphos- phates available; and (b) promote their use at the farm level. 3.12 Countervailing the influence of the dominant fertilizer firms might entail, at the importation level, (a) government encouragement of other firms to enter into fertilizer mixing and importing, or (b) as a last resort, Government going into competition with the oligopsonistic firms by commercial importation (e.g. through its own trading corporation or MOF as proposed by the NESDB Pricing and Marketing Study) and directly entering into government-to-government contracts with other countries to obtain low cost supplies (e.g., barter arrangements for urea from Indonesia in exchange for Thai rice). At the internal distribution level (where relatively competitve middlemen mark-ups prevail) except for the change in commission structure (to encourage dealers to sell urea), there is no necessity for Government's intervention. In this regard, given the poor performance of MOF, it is questionable whether it has a role in farm distribution (except ANNEX 6 - 20 - page 19 possibly for government-sponsored cooperatives and in less accessible areas). Government, however, has a role in monitoring and applying strict quality control against the adulteration of fertilizer and to ensure that quality is not misrepresented once brand names are established. In this regard, it is worthwhile considering the proposal made by the NESDB Pricing and Marketing Study that a small import fee be levied to finance the expansion of the fertilizer control work in MOAC. 3.13 The use of cheaper source of fertilizer at the farm level coulcd be promoted through special evaluation and demonstration trials carried out by progressive farmers (or contract: farmers) under DOAE's T&V system or through joint DOA/DOAE adaptive research trials on farmers fields. IV. USE OF PESTICIDES AND INSECTICIDES A. Pest and Disease Incidence 4.01 Production losses due to pests and diseases are substantial, and ineffective control is a major constraint to raising crop yields. The Thai-German rodent control project estimated national paddy losses due to rats at 7%; in a number of rice growing areas in the Northeast and Central Plain, up to a 50% crop loss is often encountered. Similarly, national losses due to paddy stemborer are estimated to be about 10%. The virus disease "ragged stunt," transmitted by the brown planthopper, is reducing yields by up to 50% in appreciable areas of double cropped rice land in the Central and Lower North region, while gallmidge, beanfly, podborer and green stinkbug populations are reported to have increased dramatically during the past decade. Other major economic diseases are attributed to blast, fungus, virus, and bacteria leaf blight. Chemical controls of the vectors (brown planthopper and leafhoppers) and use of varieties resistant to the vectors are appropriate means to control virus diseases, and use of resistant varieties is the appropriate control measure for other diseases. Resistant varieties are now available for gallmidge and brown planthopper. Unfor- tunately, most of the recommended rice varieties are susceptible or have low resistance to major rice diseases. Bollworm jassids and aphids decimated the cotton industry in the early 1970s, and it is only the current high price of cotton that permits the heavy expenditure on pest control and sustains the crop at present. Shootfly has the potential to prodluce suboptimal plant populations of sorghum, but farmers now try to combat the problem by using a high seeding rate and allowing the shootfly to thin the strand. 4.02 Downy mildew caused serious losses in corn production in the early 1970s, but the release of Suwan I, which has moderate resistance, and the availability of a seed-treatment control method should reduce the threat of serious losses in the future. A range of diseases attack other upland crops, but the only diseases of major economic importance are Cercospora leaf spot on groundnut and Athracnose on soybean. Fortunately, Athracnose, which causes pod rot, defoliation and yield reductions of up to 40%, is - 21 - ANNEX 6 Page 20 causing high losses only in restricted areas of the lower North and Central Region. There is currently no effective control method. Cercospora leaf spot attacks most wet season plantings of groundnut. Severity of attack and yield loss is related to time of planting and the growth stage at which the plant is attacked. Yield losses of up to 30% are becoming increasingly common. There are no sources of varietal resistance, and four to five sprays of fungicide are required to give effective control. 4.03 The primary candidates for cost-effective pest and disease control are: (a) blast, stemborer, ragged stunt (transmitted by brown planthopper) and rats affecting both rainfed and irrigated rice; (b) bollworm and insect (jassids and aphids) damage of cotton; (c) beanfly, podborer and green stink bug affecting oil seed crops (especially soybeans and mungbeans); (d) white fly damage of sugar cane; and (e) insect damage of tobacco. B. Pesticide Use 4.04 The value of pesticides used for crop protection in Thailand rose 3.5 times in 5 years, from B 323 million in 1975 to B 1,124 in 1979. As shown in the following table, pesticides used in 1979 consisted of 59% insecticides, 30% herbicides and 11% fungicides. Type of Value in Million B Pesticides 1975 1976 1977 1978 1979 Insecticide 176 295 429 527 659 Fungicide 38 62 77 102 118 Herbicide 109 164 181 299 347 Total 323 521 687 928 1,124 Most of these chemicals were imported. In 1979, imports totaled 13,751 tons at a cost of B 985.9 million. 4.05 Only about 25% of farmers have their own equipment and can buy pesticides. The majority rely on DOAE's mobile units which lend sprayers, provide spray material free of charge and teach farmers essential techniques. Principal users of insecticides are the farmers who grow main crops like rice (27%) or cash crops like vegetables (23%) and cotton (11%) which cannot be grown without crop protection (see table below). The demand and prices for these cash crops are good, and the cost/benefit ratio for insecticides is so favorable that farmers are willing to pay for insecticides rather than depend on DOAE for spray programs. Herbicides are mostly used in plantation crops, or in areas of cash crops where labor is expensive; almost no pesticides are used on low value crops like corn and cassava. - 22 - ANNEX 6 Page 21 Type of Value of Insecticides used in Million B Crops 1975 1976 1977 1978 __7a Rice 34.3 60.9 89.6 134.4 26.9 Vegetables 20.0 60.7 92.7 116.8 23.2 Cotton 15.0 17.5 76.6 55.0 11.0 Citrus 14.7 25.9 29.1 33.5 6.7 Onion/Garlic 14.0 23.2 25.2 29.0 5.8 Fruit Trees 10.3 14.0 24.7 27.7 5.5 Tobacco 12.9 19.2 23.6 26.0 5.2 Water Melon 4.5 12.1 13.3 17.3 3.5 Beans/Peas 8.8 10.1 12.5 17.5 3.5 Grapes 6.0 9.3 12.4 15.0 3.0 Ornamentals 3.2 6.9 8.8 10.5 2.1 Orchid 3.5 4.6 5.7 6.6 1.3 Rubber 0.1 0.1 0.2 0.2 0.6 Oil Palm - - 0.2 1.0 - Total 176.4 294.6 429.0 499.7 100 /a Based on 1978 values. C. Institutions 4.06 The DOA and DOAE are responsible for providing crop protection services. The DOA undertakes research for developing a package of crop protection measures which DOAE through the Crop Protection Division (CPD) and its regional branches are responsible for implementing at the farm level. 4.07 The CPD has six regional branches operating 30 Crop Protection Centers (CPC) which between them have a total of 90 mobile units. Each CPC has about 200 hand sprayers which are given out on loans to farmers. Besides the sprayers, the CPCs also provides free pesticides for spraying crops and training in crop protection measures to farmers. 4.08 The CPD has 400 professional staff in its CPCs who are required to study seasonal incidence of pests and diseases as a basis for formulating: (a) campaigns to control major pests and disease outbreaks before they get out of hand and seriously effect crop production; and - 23 - ANNEX 6 Page 22 (b) develop training programs for farmers to ensure effective and safe use of pesticides. D. Current Programs and Constraints 4.09 The DOA, working with OAE, has a crop protection project for the aerial spraying of cotton for the control of insect pests. This project started in Lop Buri province in 1980 with 10,000 rai of cotton protected by aerial spraying with good effective control of pests. In 1981 another 10,000 rai of cotton in Phetchabun province will be added to the project, while about 200,000 rai of cotton areas have been identified which would be available for aerial spraying depending upon the final evaluation of aerial spraying as compared with knap sack or small motorized hand sprayers. The aerial spraying of cotton project is supposed to complement the crop protection program of the Plant Protection Division, which helps small farmers with loans of sprayers and free insecticide for controlling cotton pests. All farmers with more than 20 rai of cotton own their sprayers and purchase insecticide from the private sector. 4.10 Although some resistant varieties are available and cost effective chemical controls are available for the control of most major pests and diseases, substantial crop losses continue. The major constraints to effec- tive pest and disease control can be summarized as follows: (a) lack of adequate seed supplies of insect-resistant rice varieties; (b) lack of selection of pest or disease-prone areas for local assistance and early identification of attacks; (c) farmer ignorance concerning early identification of pest/disease attack; choice of appropriate chemicals; correct concentration of spray and volume to be applied per unit area and spraying tech- nique. These problems are compounded in some cases by lack of cash resources to purchase adequate amounts of chemicals and lack of adequate water supply; and (d) the availability of a wide range of chemicals and brands with different concentrations of active ingredients which confuses the average farmer. Poor labelling and lack of clear instructions for use for some brands and the possibility of adulteration when a dealer dispenses small quantities into unmarked containers, add to the problem. 4.11 Government's involvement in this area needs re-examination. The CPD has 400 field staff in 30 Crop Protection Centers. Except for the cotton areas (where the need for their significantly greater presence is arguable), the staff is spread too thinly. There is a need to strengthen applied research in farmers fields to determine the pest population at - 24 - ANNEX 6 Page 23 which it is economic to spray and to provide a basis for introducing inte- grated pest control. Priority should be given to effectively implementing the pest surveillance program (supported by German Aid) in pest prone areas. Emphasis needs to be givenL to effectively disseminating pest and disease resistant varieties to farrmers in areas subject to regular attacks. A concerted effort is required by DOAE to educate farmers on early identi- fication of pest and disease attack and appropriate control measures andl to initiate an effective village commnunity approach to pest control to achieve participation by the majority of farmers. Because of problems related to credit availability, a special BAAC credit program for pesticides (in con- junction with DOAE) may be needed to support such a program. Government regulation of pesticide formulation and marketing needs to be strengthened via the regulatory division of DOA. Efforts should be concentrated on reducing the range of formulations and package sizes, and upgrading labelling instructions for use and quality. E. Recommendations 4.12 Key problems to be addressed are as follows: (a) Monitoring. An effectivre system for observing and reporting outbreaks of pests and disease is needed. DOAE-s Training and Visits (T&V) system would be the appropriate mechanism for educating farmers in early identification and appropriate, cost-effective chemical control of pests/diseases. The T&V system is already established ln many irrigated areas and the more agro-ecologically favorable areas - primarily in the Central and Lower North Regions - and should be introduced into priority areas not already covered. (b) Research. The economic threshold levels of pesticide application for a number of crops have not yet been determined, and adaptive research in farmers' fields needs to be intensified to better formulate local crop protection recommendations. Both factors will require greater coordination among DOA for research, OAE for economic evaluation of the methods and application letvels proposed and DOAE for advising farmers. (c) Distribution of Insect/Disease-Resistant Seeds (whereb available) needs to be increased irn coordination with spraying measures. (d) Government Regulation and Monitoring of Chemical Firms needs to be improved through the strengthening of relevant DOA agencies. The objectives of this should be to reduce the range of formulations, to improve the monitoring of residueb levels and to upgrade labeling, instructions for use and quaLlity control; and - 25 - ANNEX 6 Page 24 (e) Improvement of Ongoing Programs. The two pest/disease control programs now being carried out are not achieving satisfactory results. DOA, whose role is to undertake plant protection package development, is also involved in some extension and is about to embark on an aerial spraying program for cotton (para. 4.09), directly competing with CPD-s knapsack/motorized hand sprayer distribution program. The responsibilities for these agencies should be rationalized to resolve the present overlap of functions. The second program, for rat control, is potentially the most cost effective but has been unsuccessful because it is restricted to only one week; the participation in the program is not at the level needed for effectiveness; and there is no effective program to ensure that farmers continue to bait with anti-coagulants after the "knockdown" period to continue to suppress rat populations until the critical stages of crop development have passed. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Seed Development Project: Original Targets, Actual Production and Revised Targets, 1976-82 FY76 FY77 FY78 FY79 FY80 FY81 FY82 Crops Projec- Actual Projec- Actual Projec- Actual Projec- Esti- Projec- Revised Projec- Revised Projec- Revised ted ted ted ted mated ted estimate ted estimate ted estimate (1) (2) (1) (2) (1) b,) (1) (3) (1) (4) (1) (4) (1) (4) Soybean 200 169 600 198 1.500 261 1,500 285 1 800 300 2,200 400 2,200 450 Corn 200 224 800 452 800 800 1,200 850 1,500 1,050 1,600 1,300 Rice 351 1,100 618 1,100 1,297 1,500 1,400 2,300 1,650 1,650 2,050 Peanut 4 99 400 223 400 400 600 500 900 500 500 525 Mungbean 17 75 22 75 40 150 125 250 150 150 150 Sorghum 26 100 29 100 75 150 50 200 50 50 75 Total 200 173 800 915 3,975 1,605 3,975 2,897 5,400 3,225 7,350 3,800 3,800 4,550 (1) Original USAID-financed project's projections. (2) Actual production for each fiscal year (October 1 Lhrouglh September 30) which coincides with Thailand's two seasons, the dry season (October 1 Lhrough March 31) and the wet season (April 1 through September 30). (3) Estimated production for FY1979. (4) Revised production target based on project experience. - 27 - ANNEX 6 Table 2 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Seed Multiplication, Processing and Distribution Flow Chart FOUNDATION MULTIPLICATION SEEDS SEEDS Foundation seed SD/DOAE _ Contract seed farms of DOA and growers KU SD/DOAE SEED CENTERS Cleaner Grader Cull seed Treater disposal Bagging Storage (PROCESSED SEEDS) Original Marketing Channel Revised Marketing Channel SEED DISTRIBUTION BY MOF SEED DISTRIBUTION BY DOAE* - Government Agencies - Government Agencies - Farmers' Institutions Member - Farmers Institutions Member farmers farmers - Individual farmers - Private dealers Individual farmers or - MOAC Seed Exchange Program DOA = Department of Agriculture KU = Kasetsart University SD = Seed Division DOAE = Department of Agricultural Extension MOF = Marketing Organization for Farmers MOAC = Ministry of Agriculture and Cooperatives * With some distribution by MOF. ANNEX 6 - 28 - Table 3 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Criteria of the Seed Division (SD) for Selecting Contract Seed Growers 1. The farmer must use only the foundation seeds supplied by SD. 2. The farmer prepares land carefully and cares for the seed farm from nursery to harvest. 3. The farmer can decide how much land he would use for seed multiplication, but the SD inspector must agree. 4. Land selected for seed multiplication must have a reliable irrigation water supply until harvest, and the farmer must own adequate farm equipment. 5. After being transplanted, damaged seedlings (missing hills) must not be replanted with seedlings of other varieties. Any filling in of missing hills must be approved by the seed inspector. 6. The farmer must diligently rogue off-type varieties from the seed farm. 7. The seed inspector would make an appointment with the farmer for making a field inspection. If the farmer misses three appointments during the rice growing-season, DOAE would not buy the farmer's seeds. 8. After harvest, the farmer must thresh, dry and clean the seed before the inspector would buy the seeds. - 29 - ANNEX 6 Table 4 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Seed Quality Standard Seeds of Minimum other crops Inert Moisture germina- Shell- Pure seed or varieties matter content tion ing Category of seeds % by wt. % by wt. % by wt. % by wt. % % Foundation Seeds Rice 98 0.1 2 12 90 Corn 98 0.1 2 12 90 Sorghum 97 0.1 3 12 80 Mungbean 98 0.1 2 11 90 Soybean 98 0.1 2 10 80 Groundnut 96 0.1 4 9 80 60 Cotton 98 0.1 2 10 80 Multiplication Seeds (from seed growers) Rice 90 0.2 10 15 85 Corn 90 0.2 10 20 85 Sorghum 90 0.2 10 15 85 Mungbean 90 0.2 10 15 85 Soybean 90 0.2 10 15 80 Groundnut 80 0.2 20 15 80 50 Cotton 60 0.2 40 15 80 Processed Seeds Rice 97 0.2 3 12 90 Corn 97 0.2 3 12 90 Sorghum 96 0.2 4 12 90 Mungbean 97 0.2 3 12 90 Soybean 97 0.2 3 10 85 Groundnut 95 0.2 5 10 85 60 Cotton 97 0.2 3 10 85 Seeds for Sale Rice 97 0.2 3 12 80 Corn 97 0.2 3 12 80 Sorghum 96 0.2 4 12 80 Mungbean 97 0.2 3 12 80 Soybean 97 0.2 3 10 70 Groundnut 95 0.2 5 10 70 60 Cotton 97 0.2 3 10 70 Source: MOAC, 1980. - 30 - ANNEX 6 Table 5 TIAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Seed Prices and Margins, 1981 Multiplication seeds Foundation seeds (13/kg) (B/kg) Crop DOAE to DOA Seed growers DOAE to seed Farmers Margin to DOAE growers to DOAE x Rice 5.50 5.50 4.00-4.50 5.50 13.75- 12.:22 Corn 8.00 8.00 3.50 6.50 85.7 Sorghum 8.00 8.00 3.50-3.75 5.00 42.9- 33.:3 Soybean 15.00 15.00 10.00 15.00 50 Mungbean 15.00 15.00 10.00 15.00 50 Groundnut 15.00 15.00 10.00 15.00 15.4 Minimum Standards for Seed Growers Seeds " allowed % moisture after Moisture Other varieties Impurities drying at center Rice, sorghum, } soybean and } 15 0.2 10 12 mungbean } (soybean 10) Corn 20 0.2 10 12 Groundnut 15 0.2 20 10 - 31 - ANNEX 6 Table 6 TIAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Projected Rice Seed Exchange - Flow Chart 1980/81 1981/82 1982/83 1983/84 1984/85 Area required for propagating the "Multiplication seeds" (rai) 9,250 9,250 Amount of "Multipli- cation seeds" to be produced (ton) 1,330 | 3,500 | 3,500 | Area to be planted i 200,000 | 620,000 | 620,000 for propagation of | l "3rd generation seeds" l (rai) l Amount of "3rd genera- I | tion seeds" to be 53,125 155,000 155,000 produced (ton) (25,000) | (75,000) (75,000) | (a) (a) Area of farmers' field to be covered (rai) l l by seed exchange (5 million) (15 million)|[(15 million) Cumulative area (rai) (5 million) (20 million) (35 million) No. of changwats covered 42 57 72 72 (a) Parentheses indicate amounts to be used for the seed exchange program. - 32 - ANNEX 6 Table 7 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Rice Varieties Recommended for Each Region 1. North Region Glutinous rice Sensitive to photoperiod Meuinong 62 M Neo San Pah Tawng Non-sensitive to photoperiod Kor Khor 6 (RD 6) Non-glutinous Sensitive to photoperiod Khao Dawk Nali 105 Luongyai 14,3 2. Northeast Region Glutinous rice Sensitive to photoperiod Hahng Yi 71 Neo San Pah Tawng Non-sensitive to photoperiod Kor Khor (RD) 6) Kor Khor (RI) 8) Sensitive to photoperiod Nam Sakui 193 Khao Dawk Mali 105 Khal Parkmoh 148 Non-sensitive to photoperiod Kor Khor 15 ($D 15) 3. Central Region Non-glutinous Sensitive to photoperiod Kow rung 88 Nangmol S-4 Khao parkmoh 148 Luang patue 123 4. South Region Non-glutinous Sensitive to photoperiod Puangari 2 Nangpaya 133 Puagnam 43 Kor Khor 13 (RD 13) 5. Highland Areas Glutinous rice Non-sensitive to photoperiod Dokpayorm Kumuangluang Non-glutinous Sensitive to photoperiod Sew Maejan 6. Floating Rice Areas Glutinous rice Sensitive to photoperiod Nang Chalong Regular rice Sensitive to photoperiod Tapaokaew 16 (non-glutinous) Leomuenang 11 Pinkaew 56 Non-sensitive to photoperiod Kor Khor (RD 19) 7. Varieties Adaptable to All Regions Glutinous rice Kor Khor 2 (RD 2), Kor Khor 4 (RD 4) Non-glutinous rice Kor Khor 1 (RD 1), Kor Khor 3 (RD 3) Kor Khor 5 (RD 5), Kor Khor 7 (RD 7) Kor Khor 9 (RD 9), Kor Khor 11 (RD 11) Kor Khor 17 (RD 17) - 33 - ANNEX 6 Table 8 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Fertilizer Use and Rice Yields for Selected Countries in Asia N/Paddy Fertilizer use Yield Price Ratios (1978) (1979) (N kg/ha) (ton/ha) Japan 0.44 449.6 6.2 Korea 0.74 391.9 6.6 Taiwan n.a. 94.0 3.7 Bangladesh 1.62 41.4 1.9 Sri Lanka 1.73 62.5 2.0 Burma 1.97 8.5 2.0 Indonesia 1.07 44.9 3.0 Malaysia 2.46 57.1 2.9 Philippines 3.10 38.5 2.0 India 3.34 26.7 1.8 Pakistan 3.85 44.1 2.5 Thailand 3.89 16.5 1.9 World n.a. 75.4 2.6 Source: World Bank, EPDCE, Rice Handbook, 1981 FAO, Production Yearbook, 1979 FAO, Fertilizer Yearbook, 1979 - 34 - ANNEX 6 Table 9 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Fertilizer Use, By Crop and By Region ('000 tons) Central % of North Northeast Plain/a South Kingdom Kingdom Rice 1971 4.12 80.61 61.60 16.28 180.25 69 1975 6.87 86.81 136.91 12.18 242.77 51 1976 10.621 113.212 186.511 12.988 323.332 49 1978 13.800 147.060 242.270 16.870 420.000 54 1979 15.742 167.523 276.000 19.235 478.500 60 1980 13.807 147.371 242.840 16.922 420.940 53 Field Crops /b 1971 7.24 7.09 29.57 2.08 51.33 20 1975 27.71 15.61 73.51 2.06 118.89 25 1976 26.371 23.054F 139.082 1.916 190.423 29 1978 25.815 22.568 136.150 1.876 186.409 24 1979 19.376 16.941 102.183 1.400 139.900 18 1980 20.221 17,68(0 106.636 1,460 145.997 23 Others /c 1971 2.84 0.89 10.03 16.28 29.04 11 1975 1.94 3.57 56.88 53.97 116.36 24 1976 6.931 7.141 104.616 39.089 150.636 23 1978 7.157 7.148 109.576 50.688 174.569 22 1979 7.725 7.891 111.319 46.667 173.602 22 1980 7.085 7.337 97.736 37.805 149.963 24 Total 1971 14.20 88.59 123.20 34.64 260.62 100 1975 36.52 105.99 267.30 68.21 478.02 100 1976 43.923 143.407 423.068 53.993 664.391 100 1978 46.772 176.776 487.996 69.434 780.978 100 1979 42.843 192.35'i 489.502 67.302 792.002 100 1980 41.113 172.388 447.212 56.187 716.900 100 % of Kingdom 1971 5.4 34.0 47.3 13.3 100.0 1975 7.6 22.2 55.9 14.3 100.0 1976 6.6 21.5 63.7 8.1 100.0 1978 6.0 22.6 62.5 8.9 100.0 1979 5.4 24.3 61.8 8.5 100.0 1980 6.1 22.4 63.1 8.4 100.0 /a Includes Lower North. Tb Cassava, corn, sorghum, sugarcane, kenaf, cotton, tobacco, mung beans, soy beans, peanuts, watermelon, pineapple, yam, sweet potato, potato. /c Coconut, rubber, oil palm, fruit trees and flowering plants. Source: Office of Agricultural Economics, MOAC -35 ANNEX 6 Table 10 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Effect of Fertilizer Use - Benefit/Cost Ratios Application Incremental yield rate (kg/ha) Kg product Cost and benefit ratios e /g N P20s K20 kg/ha kg nutrient Value (B) Cost(B) Ratio Cost(B) Ratio Cost(B) Ratio Cost(B) Ratio Rice /a 16:20:0 45:0:0 0:37:0 0:0:60 Photosensitive Central 31 0 0 380 12.3 36.9 37.5 0.98 15.0 2.46 25 0 0 350 14.0 42.0 37.5 1.12 15.0 2.80 North 31 0 0 398 12.8 38.4 37.5 1.02 15.0 2.56 25 0 0 338 13.5 40.5 37.5 1.07 15.0 2.70 Northeast 31 0 0 367 11.8 35.4 37.5 0.94 15.0 2.36 25 0 0 303 12.1 36.3 37.5 0.97 15.0 2.42 Nonphotosensitive Central 56 0 0 911 16.3 48.9 37.5 1.30 15.0 3.26 38 0 0 660 17.4 52.2 37.5 1.39 15.0 3.48 North 56 0 0 1,002 17.9 53.7 37.5 1.43 15.0 3.58 38 0 0 734 19.3 57.9 37.5 1.54 15.0 3.86 Northeast 56 0 0 967 17.3 51.9 37.5 1.38 15.0 3.46 38 0 0 705 18.6 55.8 37.5 1.49 15.0 3.72 Corn:/b farm trials 15:15:15 T1777 46 sites 31 31 0 530 17.0(13)/f 51.0(39) 37.6 1.36 15.0 (2.60) 1978: 166 sites 31 31 0 730 23.0(17) 69.0(51) 37.6 1.84 15.0 (3.40) 1979: 163 sites 31 31 0 600 19.0(14) 57.0(42) 37.6 1.52 15.0 (2.80) Sorghum /b Farm fields 37 47 0 1,000 27.0(19) 72.9(51) 37.6 1.94 15.0 (3.40) 50 62 0 686 14.0(10) 37.8(30) 37.6 1.01 15.0 (2.00) Cassava /c Farm fields 0 38 0 2,100 55.0 38.5 20.0 1.93 24 sites 38 0 0 3,930 103.0 72.1 15.0 4.81 Southeast central 38 38 0 4,650 122.0 85.7 37.6 2.27 Sugar /c Farm fields 0 38 0 6,400 168.0 100.8 20.0 5.04 39 sites 38 38 0 8,250 217.0 130.2 37.6 3.46 Central 38 38 50 14,600 384.0 230.4 42.5 5.42/d Kenaf /c Farm fields 0 38 0 171 4.5 24.8 20.0 1.24 24 sites 25 0 0 364 14.6 80.3 37.6 2.14 15.0 5.35 Northeast 25 38 0 387 15.5 85.1 37.6 2.26 Soybean /c Farm fields 0 38 0 302 7.9 49.8 37.6 1.32 20.0 2.49 Central (Lopburi) 0 0 38 229 6.0 37.8 8.0 4.73 11 sites 0 38 38 320 8.4 52.9 37.6 1.41 Groundnut (irri- gated) /c North7 Chiengmai) 0 38 38 667 17.5 122.5 28.0 4.38 /a Strategy for Fertilizer Development, IFDC Prefeasibility Study, October 1970. Average fertilizer response data from trials conducted in farmers fields in wet season 1976. C. Nammuaig and J. Tabeshasm, Department of Agriculture. /b Annual Report of the National Corn and Sorghum Improvement Program 1976 and unpublished data of the Corn and Sorghum Unit, Department of Agriculture. /c UNDP Soil Fertility Research Project Working Papers No. 6 and 11. /d 15:15:0 plus potassium chloride. /e Fertilizer prices per kg: 16:20:0 - B 6, 15:15:15 - B 5.64, 45:0:0 - B 6.75, 0:37:0 - B 7.40 and 0:0:60 - B 4.8. /f Estimated response to N only based on a range of trial data that indicated that P enhanced N response by about 26X where P is a limiting factor. /g Product prices: paddy - B 3/kg, corn - B 3/kg, sorghum - B 27/kg, cassava - B 0.7/kg fresh root, sugar - B 0.6/kg cane, kenaf - B 5.5/kg, soybean - B 6.3/kg and groundnut - B 7.0/kg. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Apparent Fertilizer Consumption, 1966-78 (tons) Opening Domestic Industrial Closing Apparent Nutrient Content Year inventory /a Imports production /b use inventory /a consumption /c N P205 K20 1966 n.a. 141,428 20,275 1,383 n.a. 160,320 24,595 16,235 7,748 1967 " 218,244 36,187 1,696 " 252,738 44,485 28,056 13,152 1968 " 265,686 28,635 2,939 " 291,382 47,962 39,010 15,652 1969 " 265,830 20,049 3,965 " 281,914 42,839 41,480 20,272 1970 " 249,641 43,522 5,029 " 288,134 44,097 37,741 27,990 1971 " 226,544 39,568 7,189 258,923 44,242 26,933 21,728 1972 " 383,303 40,762 6,300 " 417,765 66,617 60,436 25,277 1973 " 398,863 34,351 7,246 " 425,968 67,914 62,870 23,732 1974 " 342,934 44,804 8,300 " 379,438 60,012 52,746 17,433 1975 50,000 465,958 54,695 12,300 125,000 433,353 70,394 56,916 18,996 1 1976 125,000 679,484 74,192 13,250 250,000 615,426 105,541 73,650 21,565 w 1977 250,000 952,476 74,211 13,020 400,000 863,667 149,553 110,547 30,402 1978 400,000 846,366 70,558 15,380 337,000 964,544 167,940 134,304 37,423 /a For 1975-78, opening inventory and closing inventory are IFDC estimates. /b Data include Mae Moh, Bureau of Bangkok Municipal Fertilizer and estimated phosphate rock production. The years 1975, 1976, 1977 and 1978 include filler (clay) used in granulation plants - estimated at 20,000; 26,000; 25,000; and 33,000 tons, respectively. /c No provision is made for product losses in handling in calculating apparent consumption. Source: Ministry of Agriculture, Office of Agricultural Economics and IFDOC estimates a, - 37 - ANNEX 6 Table 12 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Fertilizer (16-20-0) Price Margins and Importer Profits - 1979 Month C.I.F. Price Bangkok Price Profit /a % (1) ~~(2) (2)-(1) (Baht/ton) January - - - - - February 2,248.37 3,200 951.63 451.63 16.43 March 3,291.81 3,600 325.64 77.76 2.20 April - 3,800 - - - May - 3,800 - - - June 2,877.56 3,900 1,062.44 562.44 16.85 July 3,434.34 4,000 565.66 325.26 8.85 August 3,433.80 4,200 766.20 525.83 14.31 September 3,025.79 4,200 1,174.21 674.21 19.12 October 2,963.40 4,200 1,336.60 736.60 21.27 November - - - - - December - - - /a Profit = Bangkok price - (c.i.f. + other fertilizer expenditures). Other expenditures on bulk fertilizer price are estimated at A 500/ton and on bagged fertilizer at 7% of c.i.f. price Source: Pricing and Marketing Study -38- ANNEX 7 THAILAND PROGRAM AND POLICY PRIORITIES FOR AN AGRICULTURAL ECONOMY IN TRANSITION Development of Tree Crops Table of Contents Page No. I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 39 II. RUBBER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 A. Past Performance . . . . . . . . . . . . . . . . . . . . . 39 B. Prospects for Future Production . . . . . . . . . . . . . 44 III. OTHER TREE CROPS . . . . . . . . . . . . . . . . . . . . . . . 47 A. Past Performance ..47 B. Prospects for Future Production . . . . . . . . . . . . . 49 IV. KEY ISSUES FOR THE SUBSECTOR AND RECOMMENDATIONS . . . . . . 51 A. Institutional Responsibility for the Subsector . . . . . . 51 B. Government's Pricing Policy for Rubber . . . . . . . . . . 51 TABLES 1. Rubber Area Replanted, 1960-80 ..53 2. Rubber Production and Prices Received by Farmers, 1972-80 54 3. Rubber Exports by Type ..55 APPENDICES 1. Trends and Prospects in Rubber Productidn ... . . ..... . 56 2. Details of Taxation on Rubber ... . . . . . . .... . . . 90 3. Farm Profile of a Typical Farmer in the South . . . . . . . . 94 4. Financial Returns for New Plantings - New Export Tax, Devaluation and Alternative Tax and Grant Scenarios . . . . . . 103 39 - ANNEX 7 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES I. INTRODUCTION 1.01 Tree crops consisting of rubber, coconut, coffee, cocoa, oil palm and fruit trees account for about 15% of the planted area and 10% of the value of all agricultural production. Since tree crops are mainly grown by smallholders, little capital has been invested in the development of new plantings and the rehabilitation of old stands (except for rubber). Further development is also hindered by the long gestation period of 3 to 7 years before the crops come into production, during which time the producer must provide all inputs without receiving any return on his investment. For the smallholder farmer who is unable to finance the cost of fertilizers, improved planting material and other inputs during the long immature period, and given the uncertainties regarding future prices, the option for commer- cial tree crop production does not exist without Government assistance. 1.02 Increased development of tree crops would benefit both the farmer through increased income and the Government through greater exports. As a basis for discussing possible actions which Government might take to promote such development, this Annex analyses the past performance and future pros- pects of rubber and the other tree crops, and in the last section focuses on the two outstanding issues which now need to be addressed by Government: (a) the need to define institutional responsibilities for the development of tree crops other than rubber; and (b) the need to reassess the current pricing policy of rubber. II. RUBBER A. Past Performance 2.01 The area of rubber in Thailand is estimated to have increased from about 1 million ha in 1960 to about 1.6 million ha by the end of 1980. About 90% of the rubber planted is in the South of Thailand and has been the result of clearing jungle land, mainly without legal sanction. The remaining 10% is in the Southeast where new plantings have been started both in cleared jungle areas and, to a much lesser extent, as a replacement for other agri- cultural crops like cassava. For the rubber area to have increased by 0.6 million ha between 1960 and 1980, new planting must have taken place at an average rate of about 30,000 ha/year. It is likely that the rate was higher than this in the earlier part of the period, but that it slowed as the area of accessible forest diminished and as replanting became increasingly - 40 - ANNEX 7 Page 2 more profitable, largely due to the availability of grants administered bDy the Office of Rubber Replanting Aid Fund (ORRAF). By 1980, increases in real wage rates and taxation made new rubber planting a relatively low yielding investment, and the annual rate of new planting is thought to have slowedi to 10,000-15,000 ha p.a. 2.02 About 90% of the replanting undertaken during the past two decades has been through ORRAF. Since its establishment in 1960, ORRAF has evolved into one of the most effective and efficient public sector institutions in Thailand. Its main activity has been providing and administering rubber replanting grants and providing technical assistance to rubber replanters during the first six years after replanting. Funds for ORRAF's activities come from a cess levied on rubber exports, 90% of which finances the cost of rubber replanting in the form of grants to individual replanters./1 The grant currently totals B 4,250 per rai, 54% of which is in the form of materials and the rest in cash. Replantings under ORRAF grants were initiated in 1962, and by the end of 1980, 340,000 ha had been started. I)uring 19162-69 the rate averaged 6,500 ha/year, increasing to 19,000 ha/year in 1970-74 and to 30,000 ha/year in 1975-79 (Table 1). The replanting rate reached 39,000 ha in 1980, 65,600 ha in 1981, and in the future is expected to be about 50,000 ha p.a. 2.03 Types of Material Planted. Until about 1960, most of the rubber planted in Thailand was from unselected seedlings. However, with the estab- lishment of ORRAF, the import of technology and planting material from Malaysia and the expansion of the Rtubber Research Center (RRC), high yieLd- ing clonal material (RRIM 600 and RtRIM 623) became increasingly available. It is estimated that in the late 1960s all of ORRAF replantings, and nearly half of the new plantings, were with clonal material. Although planting with unselected seedlings probably continued in the less accessible areas until the mid-1970s, since then, cLonal budwood has been available in practically all rubber-growing areas of Thailand. The impact of such a technological change is enormous. Unselected seedling rubber is estimated to yield an average of about 400 kg/ha over a 19-year tapping life while clonal rubber with minimal inputs can be expected to double this. Further- more, clonal rubber receiving full inputs for an 8-year immaturet period is likely to yield an average of 1,000-1,100 kg/ha over 20 years, peaking at about 1,500 kg/ha. The change in structure of the rubber area resulting from these plantings has been as follows: /1 According to Section 18 of the ORRAF Act, 5% of the cess funds must be allocated to the Rubber Research Center for research, up to 5% can be used for ORRAF's administrative expenses, and at least 90% is returned to the farmers as grarLts for replanting. ANNEX 7 - 41 - Page 3 1960 1970 1975 1980 (Area at beginning of year in -000 ha) Seedling Rubber 1,010 1,100 1,040 880 Clonal Replants - 70 180 340 Clonal New Plantings - 200 310 390 1,010 1,370 1,530 1,610 2.04 Characteristics of Supply Response. Rubber production is a function of (a) the tapping system and intensity, (b) planting rates, (c) age, and (d) yield potential of the stand. Trees take about 8 years to come into production, then yield economically for 15-30 years depending on treatment. If left on the ground, they will continue yielding, albeit at low levels, up to 50 years or more. Details of the supply response are given in Appendix 1. 2.05 Short Run. In the short run (i.e., the period which does not permit changes in the capital stock of trees and area planted), production depends almost entirely on the productivity of trees already existing. The yield potential of a stand of rubber is virtually a fixed parameter determined by the type of planting material used and subject only to some potential for change through increased intensity of tapping and yield stimulation by chemical means. Planting rates have a minor impact on short-run production as replanting reduces the actual area of trees tapped, but the major factor affecting production is tapping intensity. Mature rubber is heavily tapped; about 80% is tapped daily (Dl), and this is unlikely to increase, although it may fall in response to higher wage rates. Since virtually all mature rubber is tapped, the short-run price elasticity of supply /1 of rubber from mature trees may be considered to be close to zero. However, with senile rubber trees, only about 50% of the potential rubber would be tapped at the likely 1981/82 farm gate price (B 18-20/kg) and average wage rate (B 50/day). Hence, rubber from senile trees has a relatively high short-run elasticity of supply with respect to price (about 2) in this range of prices and wages, because increases in price make additional trees worth tapping. /1 The percentage change in rubber production resulting from a one percent change in price. - 42 - ANNEX 7 Page 4 2.06 At the likely 1981 production level and prices, the short-run elasticity of total rubber supply 'supply from senile trees plus supply from mature trees) with respect to price is in the order of 0.3./i The short--run supply elasticity of rubber is estimated to be at its highest iTI the B 18-22 price range, but would diminish to less than 0.1 at a price of B3 30/kg. The short-run supply elasticity is also expected to fall over tlme because of the decreasing importance of ru'bber from senile stands as a result of continued ORRAF replanting and hence reduced areas of senile trees. 2.07 Long-run production (i.e., that obtained from changing capital stock of rubber) is mainly determined by the area being planted or replanted with rubber and the innate yield capacity of the trees (quality of planting materials). The quality of planting material available in ThaiiLand is already good and, provided support for RRC is continued, is likely to remain so. The likely rate of replanting is largely dependent on ORRAF's capacity (now assessed at 50,000 ha/year if foreign assistance is available)./3 The rate of new planting which takes pLace would depend on whether measures are taken to make it financially attractive to farmers. At present new planting rates are low, because with a financial rate of return of only 12-14% it is relatively unattractive. However, if incentives for new planting were to be increased (by grants, interest rate subsidies, or higher prices), farmers would be expected to respond and increase planting rates. No reliable empir- ical evidence is available concerning the likely level of response in new planting rates to expectations of 'higher long-run prices. However, the general view of the industry is that if the projected financial rate of return were to be raised from 12-14% to 18-20%, then the annual planting rate might more than double (from about 15,000 ha presently). 2.08 Institutions. A number of agencies are involved in the production of rubber. Apart from ORRAF, the main institutions are: (a) the Rubber Division (Department of Agriculture, DOA) which is the official regulatory body for the rubber industry in Thailand. Its 19 field stations also provide areas of planted rubber for experimentation and demonstration, besides producing budded stumps and budwood, which are sold directly to farmers or passed on to ORRAF; (b) the Rubber Research Center (RRC), also under DOA, with responsibility for agronomic and economic research in /1 The short-term supply response for Thailand measured through an econometric model with time series from 1955-75 was 0.25 (see E. Grilli, An Econometric Model of the World Rubber Economy, World Bank Staff Commodity Paper No. 3, January 1979). /2 The share of senile trees to total rubber is expected to decline from nearly 40% in 1980 to about 15% at the end of this century (Appendix 1). /3 The financial rate of return to farmers for replanting under an ORRAiF grant is so attractive (25-30%) compared with using their own resources (about 12%) that many farmers would rather wait for a grant (particularly as ORRAF has wide geographical coverage in the South). - 43 ANNEX 7 Page 5 production and processing, adaptation of research findings, and dissemination of information among producers and processors; (c) the Deparment of Agricul- tural Extension (DOAE) in MOAC to provide extension services, advise farmers on agricultural techniques after the immature period and provide support services to the 300 Group Marketing Organizations (GMOs) established throughout the country/i; and (d) the Rubber Estates Organization which operates commercial rubber estates and processing facilities acquired by the Government during the 1930s. The private sector is also involved and has been active in new plantings of rubber in newly cleared forest land made accessible by improved roads and communications. The private sector financed about 60,000 rai/year of new plantings and 26,000 rai/year of replanting during 1975-82, and the accumulated total in 1980 stood at 2.75 million rai (0.4 million ha), representing about 30% of the total area under rubber. The private sector also successfully handles all the processing and marketing of rubber. 2.09 Marketing, Processing and Pricing. Farmers sell almost all of their production as air dried sheets to local traders or, to a much lesser extent, through CMOs and by dealing directly with wholesalers and exporters. In either case, exporters normally buy graded unsmoked sheets which are subsequently smoked and exported. Scrap rubber is bought by local traders and used as an input to the block rubber manufacturing plants owned by the private sector. In most of Southern and Southeast Thailand, the marketing system is efficient and farmers get a fair return for their production. The prices received by farmers during 1972-80 and projections of prices for 1982-90 are given in Table 2 and para. 15. 2.10 Exports of rubber have grown from 280,000 ton in 1970 to over 500,000 tons in 1979 (Table 3). Over 90% of total production is exported, and this is expected to continue. The main export market is Japan, although Thailand also sells to other major markets such as Singapore, New York and London. About 75% of Thailand's rubber exports are shipped as ribbed smoked sheet (RSS). Export prices in Thailand are similar to those for Singapore or Malaysia. Export prices forecast by the World Bank Commodities Division for the next decade are good. Furthermore, it is likely that the supply forecasts for some of the other major suppliers (Malaysia, Indonesia) for the late 1980s and early 1990s will be revised downward. Provided that /1 GMOs are farmer groups set up to grade and sell rubber by tender to traders. They have proved to be a cost effective way of bulking small- holders- production, and studies have indicated that when rubber is sold through them, prices are competitive and reflect a fair proportion of the fob price adjusted for taxes. Furthermore, they provide a focal point for training farmers in raising the quality of their unsmoked sheet. - 44 - ANNEX 7 Page 6 demand estimates are not also changed, such a revision would make the outlook for rubber export prices even better than presently projected. B. Prospects for Future Production 2.11 Projects. Two major projects in support of rubber production are now planned. The first is the World Bank supported Second Tree Crops Project which would assist ORRAF in carrying out its rubber replanting program for 1982-85. The second is a very ambitious 5-year (1982-86) project for in- creasing production by replanting private land under cassava and public forest areas with rubber in the southeastern provinces. The latter project's targets are as follows: Target Areas Province Cassava Forestry Annual Total ---------------- rai ----------------- Chon Buri 83,293 18,427 101,720 Rayong 141,641 17,599 159,240 Chanta Buri 23,287 7,021 30,308 Trat 16,961 12,407 29,368 Annual Total Area 265,182 55,454 320,636 Five-year target area 1,325,910 277,270 1,603,180 The credit requirements of this project would be B 419 million in the first year and increasing gradually to B 1,107 million in the fifth year. The project, as proposed, would have its own project manager directly responsible to MOAC and would be done independent of ORRAF. 2.12 The proposed project in the Southeast is over-ambitious. Con- sidering that ORRAF, with all its experience and expertise, was able to replant only 260,000 rai (41,600 ha) in 1980, it is doubtful that a new organization lacking field experience and trained staff would be able to achieve an annual planting target of 51,000 ha. At issue is the proposal to set up a new organization when ORRAF is already active in replanting old rubber trees in Southeastern Thailand through its offices in Chanta Buri and Rayong (para. 4.01). 45 - ANNEX 7 Page 7 2.13 Clearly, some effort is needed to support rubber production in the Southeast, which has a total area of 823,000 rai under rubber, of which 29,000 rai are over 25 years old and in need of replanting, 94,000 rai are immature, and 700,000 rai are in production. Further scope may also exist for rubber in parts of the Northeast and Northern Regions, but the rate of expansion would have, by necessity, to be limited considering the limited experience with new plantings. A pilot scheme of rubber new planting (with BAAC providing credit and ORRAF giving technical support) is only just being initiated in the Eastern, Northeastern and Northern regions. About 16,000 ha will be covered in the first year. This should be the basis for further expansion in the Southeast rather than the overambitious program outlined above. 2.14 Estimated Future Production. To project future production of rubber in Thailand, a simulation model has been made based on estimates of the historical area under rubber, planting and replanting rates, and types of material. Prices and wage rates are assumed to stay at the present relative levels (for details see Appendix 1). This model gives estimated rubber production as follows: Projection of Rubber Production Based on Simulation Model Actual Model prediction …--- ('000 tons) ------- 1960-72 315 312 1973-75 366 367 1976 393 414 1977 431 442 1978 467 471 1979 534 499 1980 540 526 1981 n.a. 554 1982 n.a. 583 1983 n.a. 612 1984 n.a. 638 1985 n.a. 664 1986 n.a. 691 1990 n.a. 809 1995 n.a. 1 007 2000 n.a. 14187 - 46 - ANNEX 7 Page 8 2.15 This level of projected production would have the following impact on exports and government revenue: Projection of Rubber Exports and Taxation/a Proportion of Total production assumed Quantity export to be exported exported Fob price earnings Cess Exporl: tax (x) (-000 tons) ($/kg ) (1981 constant` $ million) 1982 94 548 1.50 820 44 165 1983 93 569 1.51 860 46 173 1984 92 587 1.52 890 48 180 1985 91 605 1.53 930 49 188 1986 90 622 1.56 970 52 198 1990 90 728 1.69 1,230 67 256 1995 90 906 1.69 1,530 83 319 2000 90 1,068 1.69 1,800 98 3'76 /a The projection assumes the continuation of the tax and grant policies in force prior to the July 1981 reduction in export taxes (see Appendix 2). 2.16 Government s own projections for rubber production included in its 5-Year Development Plan (1982-86) are much higher than those above. A comparison of these estimates indicates a production shortfall in 1986 of about 0.2 million tons. Since most of the rubber is for export, such a shortfall could have grave implications for financing the overall developnment of the national economy. To avoid this shortfall, Government will need to give farmers greater incentive to increase production. Since ORRAF is already achieving good results in rubber replanting, the increase will have to come from greater rubber new planting. Issues regarding new planting relate to the disincentives posed by rubber export taxes and the need for planting grants to encourage such long-term investments (paras. 4.03-4.04). The Gc,vernment"s projections and mission projections are given below for the Fifth Plan Period: - 47 - ANNEX 7 Page 9 Government Estimates Bank Estimates 1982 1983 1984 1985 1986 1982 1983 1984 1985 1986 Area tapped (million rai) 6.94 6.80 6.74 6.82 6.92 5.64 5.94 6.25 6.64 7.00 Yield (kg/rai) 89 96 104 117 130 103 103 101 99 99 Production (million tons) 0.62 0.65 0.70 0.80 0.90 0.58 0.61 0.63 0.66 0.69 III. OTHER TREE CROPS A. Past Performance 3.01 Coconut./l Coconut is the second most important tree crop. Production has increased gradually from about 699 million nuts in 1972 to about 780 million nuts in 1980. During the same period the total area under coconut rose from 2.4 million rai to 2.8 million rai, while the average yield per rai of nuts declined from 625 to 450 (see following table). About 50% of the present total area under coconut is in the South where it is the second most important crop after rubber. Elsewhere, coconut is found in houselots and on bunds around paddy fields. In the South an estimated 0.6 million rai are due for replanting and another 0.4 million rai are suitable for rehabilitation and intercropping with coffee and cocoa. Area Planted Yield Production Year '000 rai kg/rai '000 tons 1972 2,398 625 699 1973 2,425 650 691 1974 2,453 650 684 1975 2,467 667 842 1976 2,447 665 901 1977 2,560 665 927 1978 2,574 533 860 1979 2,591 462 688 1980 2,750 450 780 /1 Also see "Thailand Smallholders Coconut Development Project," Report No. 39/80 Tha.22.6, August 1980. - 48- ANNEX 7 Page 10 3.02 Recent development of access roads in the South has encouraged farmers to clear previously unaccessible coastal land and plant it with coconuts until all available and accessible land is used up. However, pro- duction and yield have remained low due to the use of unselected seedlings of low yielding Thai Talls. About 80% of total production is consumed fresh. Small nuts and surplus nuts from the peak cropping season are converted into copra for local milling, but because of a general shortage of nuts and an inadequate supply of other oil seeds, Thailand has been importing an increas- ing amount of edible oils. In 1979 the cost of these imports totaled B 472 million. 3.03 To help boost coconut production, an FAO/World Bank mission visi- ted Thailand in June 1980 and assisted Government in preparing a coconut development project suitable for World Bank financial assistance. The basic objective of the three-year first phase project would be the increased pro- duction of coconuts and of the perennial intercrops for export substitution and eventually for export. The project would emphasize institution building and long-term development, besides undertaking replanting with hybrids and intercroping with cocoa and coffee on about 35,625 rai comprising 9,000 holdings. Total project costs are estimated at about B 189 million. This project is ready for foreign assistance pending the Government's decision on the agency to be responsible for project implementation. 3.04 Coffee. The estimated area under coffee in 1980 was about 160,000 rai (nearly 26,000 ha), of which 10,000 rai was in the North consisting mostly of Arabica coffee while the remaining area was in the Sout'h planted to Robusta coffee. The estimated production in 1980 was 50,000 tons, while the yield of fresh berries per rai was 310 kg for Robusta which is resistant to coffee rust and only 200 kg for Arabica which is very suscepti'ble to coffee rust. 3.05 The bulk of the green coffee produced is processed by t'he dry method in which the fresh berries are dried in the sun and hulled, resulting in poor quality. Currently farmers receive about B 40 per kg of green coffee, and this high price has encouraged more and more farmers to plant coffee, espe- cially as an intercrop in coconut plantations in the South. Private traders as well as the Sawee Coconut Experiment Station and the DOAE have cooperated in providing smallholders with the necessary support services for increasing coffee production to take advantage of the favorably high prices. Since Thailand is nearly self-sufficient in coffee, any increase in production will be available for export. Any large-scale expansion of coffee should, therefore, consider the competitiveness of Thai coffee beans and the potential for uptake in the world market. - 49 - ANNEX 7 Page 11 3.06 Cocoa. Cocoa was introduced into Thailand in 1972 when the first cocoa trial was planted with Fl mixed hybrid seed from Sabah (Malaysia) at the Nai Chong Station in Krabi province at the initiative of the RRC; soon afterward the responsibility for the trial was passed on to the Horticultural Division of DOA. The trees are now mature and in-bearing and have shown that cocoa can grow well in the province. A small trial planted as an intercrop with coconut in Phuket Province has also shown satisfactory growth, suggesting good possibilities for cocoa as an intercrop with coconut in the South. In 1980 the area planted under cocoa totaled about 5,000 rai, all in the southern provinces. 3.07 A UNDP/FAO Cacao Development Project located at the Horticulture Division-s Sawee Coconut Experiment Station was approved in January 1981. The objectives of the project are to: (a) formulate and initiate a long-term program for cocoa research and development; (b) develop seed gardens for the future production of Fl cocoa seed in quantities adequate for national requirements; and (c) initiate small-scale cocoa plantings using F2 seed already available, thus identifying areas suitable for future large-scale commercial plantings. 3.08 Oil Palm. Oil palm cultivation was first introduced into Thailand in 1968 when 10,000 rai were planted by members of the Self-Help Settlement Cooperative in Satun Province, and another 10,000 rai planted by the Thai Palm Grove and Oil Industrial Co. in Krabi Province. By 1980 the area under oil palm had increased to about 181,000 rai, all in the South. About 50,000 rai of this area were in production, with an average yield per rai of about 1.2 tons of fresh fruit bunches. The main constraint to the development of oil palm has been the lack of processing facilities, which have not expanded in coordination with the expansion in planted area in the different provinces. The private sector has three palm oil extraction mills in operation, one in Krabi and two in Satun Provinces, and three more are planned to be constructed, two in Chumphon and one in Surat Thani. 3.09 Perennial Fruit Trees. Fruit tree cultivation is widely dispersed throughout Thailand. In 1980 the total area under fruit tree was estimated at 1.7 million rai, of which only 0.3 million rai was planted in commercial orchards, while the remaining area is dispersed in small house lots. Most of the fruits are consumed locally except for mangoes and longans which are exported. B. Prospects for Future Production 3.10 New plantings of tree crops other than rubber should be encouraged by providing long-term loan facilities through BAAC and technical support by the agency responsible for implementing the relevant program. - 50 - ANNEX 7 Page 12 3.11 Government targets for the development of tree crops (other than rubber) during the Five-Year Development Plan (1982-86) and Bank estimates of likely development are shown in the fo:Llowing table. The targets for- coconut and coffee are likely to be realized if the Smallholders Coconut Development Project (para. 3.03) is approved and initiated in 1982. The targets for cocoa seem high, however, and our assessment is that by 1986 there will be only about 33,000 rai under cocoa, with a production of 73,000 tons of cocoa beans. Estimnated Tree Crops Production During the Five-Year Development Plan (1982-86) Government Estimates Bank Estimates Type of Tree Crop 1982 1983 L984 1985 1986 1982 1933 1984 1985 1986 Coconut Area (million rai) 2.74 2.74 2.75 2.80 2.85 2.74 2.74 2.75 2.80 2.85 Yield (nuts/rai) 405 405 405 399 393 405 405 405 399 393 Production (million nuts) 835 835 836 837 841 835 835 836 837 841 Coffee Area (million rai) 0.18 0.19 0.20 0.21 0.22 0.18 0.21 0.20 0.21 0.22 Yield (kg/rai) 350 358 380 400 455 350 400 455 400 455 Production (million tons) 0.06 0.07 0.08 0.08 0.10 0.06 n.08 0.10 0.09 0.10 Cocoa Area ('000 rai) 23 28 48 48 48 5 9 14 22 23 Yield (kg/rai) 31 31 34 34 39 30 L0 50 50 50 Production ('000 tons) 0.10 0.21 0.46 0.97 1.69/a 0.10 0.29 0.29 0.48 n.73 Oil Palm Area (million rai) 0.20 0.21 0.22 0.23 0.24 0.29 0.21 0.22 0.23 0.24 Yield (ton/rai) 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.2 1.5 1.5 Production (million tons) 0.13 0.16 0.22 0.23 0.24 0.13 fl.22 0.22 0.29 0.30 /a The plan actually shows a target of 19,000 tons, but this seems to be a scalculation since 48,000 rai would at best be expected to yield 1,690 tons of cocoa beans. - 51 - ANNEX 7 Page 13 3.12 A study of tree crop development in Thailand, to be directed by the Office of Agricultural Economics, will be carried out under the Second Tree Crops Project being financed by the World Bank. The focus will be on the financial, technical and institutional implications of an expanded program for development of new rubber in the North and Northeast and of hybrid coconut and its intercrops (coffee and cocoa) in the South. IV. KEY ISSUES FOR THE SUBSECTOR AND RECOMMENDATIONS 4.01 Further significant development of the tree crop subsector will necessitate the resolution of two major issues: the designation of institu- tions responsible for that development and Government's pricing policy for rubber. A. Institutional Responsibility for the Subsector 4.02 Overall responsibility for the planning of the tree crops subsector is with the Office of Agricultural Economics (OAE) in the MOAC. Research and the production of planting material is the responsibility of the Department of Agricultural (DOA) for all tree crops. ORRAF provides planting material, technical support during establishment and the immature period, and financial aid for rubber replanting, while the Horticulture Division of DOA produces planting material and cooperates with DOAE which provides technical support for all tree crops (including mature rubber). The BAAC provides credit to farmers in Government Land Resettlement Schemes, while the private sector supplies credit for inputs to farmers not covered by ORRAF or BAAC, and handles the marketing and processing of the production. The responsibility of providing technical support services for new plantings of tree crops has not as yet been agreed, but is expected to be defined in accordance with the recommendations of the tree crop development study (para. 3.12). ORRAF is already giving technical assistance to rubber new planters on a pilot basis, and is expected to gain official authorizaton to undertake this function countrywide. B. Government's Pricing Policy for Rubber 4.03 During the latter half of 1981, two developments took place which had important effects on the price received by farmers for rubber and the incentive to invest in new plantings: (a) the export tax was reduced;/1 and (b) the baht was devalued (from 20 to 23 to the US dollar). /1 Its formula is now: Tax = 0.4 x (gazetted price - 10.8) instead of Tax = 0.4 x (gazetted price - 5.8). See Appendix 2 for details. 52 - ANNEX 7 Page 14 Prior to devaluation, the reduction of the export tax (from B 6,/kg to B 4/kg) increased the 1982 farm price by about 10% (from B 18.9/kg to B 20.8/kg). With devaluation, the farm price increased a further 13% (to B :23.5/kg) but the export tax (in baht terms) increased from B 4/kg to B 5/kg.,/l This export tax still constitutes an equivalent tax burden of about 22% at the farmgate level. 4.04 With the recent changes, the financial rates of return (FRR) for new planting are summarized below:/2 Planting Grant None 50% 40% Base case - before devaluation 13.7 New export tax (B 5/kg) 15.0 19.5 Export tax @ B 3/kg 16.4 19.9 Export tax @ B 1/kg 17.6 The new export tax after devaluation improves the FRR to 15% from the 13.7% obtained prior to July 1981. This is still below the 20% FRR likely to induce farmers to invest in new rubber plantings from their own or commercially borrowed resources. Even if export: taxes were to be reduced to B 1/kg, the FRR is still below 18%. The required financial incentive is likely to be obtained from either (a) a planting grant equivalent to 50% that given by ORRAF (for six years) or (b) a further reduction of the export tax to B 3/kg and a replanting grant at 40% the ORRAF rate. The impact of the latter on short-term production would probably be slightly higher. The long-run impact of these proposals is likely to be similar as that proposed in Appendix 1. Hence by the turn of the century exports would be valued at more than $400 million annually more than if no chtanges were made. /1 The cess increased from B 1.59 to B 1.89. /2 Details are in Appendix 4. -ANNEX 7 - 53 - Table 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Rubber Area Replanted, 1960-80 Average Replant- Actual No. of size of Approved Approvals/ ing replanted small- replanted Approval year area applications year area holders plots (ha) (%) /a (ha)/b (ha) 1960-73 168,848 - 1960-74 163,954 97,000 1.7 1974 19,836 79 1975 18,932 15,300 1.2 1975 26,324 80 1976 23,254 17,050 1.4 1976 27,234 82 1977 25,664 17,900 1.4 1977 38,753 81 1978 36,301 28,900 1.3 1978 51,882 79 1979 44,477 36,400 1.2 1979 53,382 93 1980 38,697 33,100 1.2 1980 41,258 79 1981 65,600/c - - /a Most replantings take place a year after approvals. /b Including type 3 replantings (fruit trees, etc.). /c Includes area approved in 1979, 1980 and 1981. Source: ORRAF - 54 - ANNEX 7 Table 2 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Rubber Production and Prices Received by Farmers, 1972-80 Year Area planted Yield Production Price '000 rai kg/rai/a '000 tons B/kg 1972 8,377 57.7 337 4.77 1973 8,577 62.4 368 6.86 1974 8,786 61.1 382 7.38 1975 8,786 56.2 349 6.42 1976 9,126 57.4 393 9.15 1977 9,275 63.0 431 9.49 1978 9,426 69.0 467 10.74 1979 9,726 73.2 534 14.55 1980 9,844 73.2 540 16.12 /a From mature areas. Source: Office of Agricultural Economics, ORRAF. ANNEX 7 - 55 - Table 3 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Rubber Exports by Type RSS /a TTR /b Other /c Total /d Year mt x 000 % mt x 000 mt x 000 % mt x 000 $ mil. 1970 229.6 82 0.3 - 49.2 18 279.2 111.4 1971 255.4 83 1.6 1 48.3 16 307.3 94.4 1972 269.7 83 1.8 1 53.0 16 324.4 94.3 1973 308.1 84 2.2 1 54.9 15 368.2 209.8 1974 306.8 84 7.0 2 51.3 14 365.2 218.3 1975 264.4 79 32.5 10 37.9 11 334.7 174.8 1976 286.2 77 48.7 13 38.1 10 372.9 263.7 1977 302.1 75 63.7 16 38.2 9 404.0 310.1 1978 338.2 77 69.8 16 33.7 8 441.8 397.3 1979 393.0 76 94.3 18 30.5 6 517.8 613.5 /a Ribbed Smoked Sheet grade 3 comprises about 65% of this type followed by RSS4 at about 23%. /b Thai Tested Rubber grade 20 comprises about 90-95% of this type and the balance is mainly made up by TTR 50. TTR production increased significantly since 1975. /c Including mainly brown crepe, air dried sheets and scrap rubber. /d Rubber exports show a growth rate of 7.1% in volume and 6.7% in value (real terms) over the period 1970/79. Source: ORRAF ANNEX 7 - 56 - Appendix 1 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Trends and Prospects in Rubber Production /1 Aggregate Production, Prices and Wage Rates - Characteristics and Simulation 1. A large proportion of the cost of production of rubber is incurred during the establishment of the plantation, which takes place over a 6-8 year period. Once rubber is mature, marginal revenue normally excee!ds marginal cost over a wide range of farmgate rubber prices and labor costs in Thailand. Tapping intensity for mature rubber is high, with an estimate!d 80% or more of the area being tapped daily, and little change in tapping intensity in response to price increases should be expected. Consequently the aggregate supply of rubber in Thailand from established mature trees is thought to be relatively insensitive to changes in input/output prices iLn the short run, although long-run production from mature trees is affected by price due to the impact which prices have on planting rates. Rubber supplies from senile trees, however, are very sensitive to labor productivity, prices and labor rates./2 The nature of these phenomena can be better understood by examining the determinants of short-run and long-run effects of changing rubber prices and wages. /1 This analysis is based on the situation prior to July 1981 when the export tax had not been reduced and the baht was still 20 to the dollar. /2 Trees which have already passed the point at which they would have been replanted under well-managed conditions. On average the age at which trees, become effectively senile is considered to be as follows: Age above which trees are Type of Plantation considered senile Seedling rubber (DI tapping) 22 years Clonal rubber:ORRAF (DI tapping) 28 years Clonal rubber:ORRAF (D2 tapping) 34 years Clonal rubber:Other (Dl tapping) 27 years 57 - ANNEX 7 Appendix 1 Page 2 Short-run Response and Its Implications 2. Short-run changes in rubber production arise only from measures which affect the yield of existing trees (i.e., tapping intensity and stimula- tion). Tapping intensity in the short run is partly determined by the relationship between man-day labor requirements for tapping rubber and its yield. Productivity generally falls with yield, but not always in direct proportion to it. Field estimates by the World Bank appraisal mission for the Second Tree Crops Project indicate that the productivity of labor is about 2.2 kg of dry matter equivalent per man-day for rubber yielding 200 kg/ha, about 3.4 kg/day for rubber yielding 450 kg/ha and between 5 kg and 10 kg/man-day for mature rubber. Labor rates vary by region and by proximity to alternative employment but averaged about B 50/man-day in 1980/81. It is expected that wage rates will increase in real terms over time as the economy of southern Thailand continues to boom. 3. To illustrate the impact of different wage rates and rubber prices, Table 1 indicates the cut-off rubber price below which tapping is unprofit- able for a range of wage rates and a range of different yield conditions. It can be seen that if the wage rate were as low as B 40/man-day, virtually all senile rubber (i.e., senile rubber with a potential yield of above 200 kg/ha) would be worthwhile tapping, as long as the rubber price were above B 20/kg at the farm level. However, with the wage rate at B 50/man-day, yields would have to be above about 310 kg/ha for tapping to be worthwhile at a price of B 20/kg. The figures for mature rubber show (as expected) that within the range of likely prices (B 15-30/kg) and wage rates (B 30-60/man-day) it will normally be profitable to continue tapping. Hence, short-term supply response to increases in rubber prices is likely to arise from increased tapping of senile trees rather than from the more productive mature trees. 4. The attached Tables examine the likely response of tappers of senile rubber to variations in prices. They take account of the likely frequency distributions both for the financial opportunity cost of labor and for the potential yield of senile rubber. Estimated production figures for 1981-85 assume an average financial cost per man-day of about B 50 and a potential yield of senile rubber of 300 kg/ha. However, as a result of frequency distributions in both the financial opportunity cost of the labor and the yield of senile rubber, the proportion of rubber which would be harvested at each price level will vary as detailed in Table 2. Table 3 summarizes the likely relationship between rubber prices, the percentage of senile rubber actually produced (expressed as a proportion of potential production) and the annual production likely to be harvested from senile rubber trees during the period 1981-85 when the area of senile rubber in Thailand is expected to average about 520,000 ha. It can be seen that the benefit from marginally raising the farmgate price is greatest (a 22% increase in production would result from a 10% increase in price) for the B 18 to B 22 per kilo range (the price range most likely to prevail during the next few years). At higher price levels (say, the projected world price level without tax of between B 28-30/kg), the effect of increasing farmgate prices would add little to the likely production of senile rubber (only a 5% increase in production would result from a 10% increase in price). - 58 - ANNEX 7 Appendix 1 Page 3 5. While senile rubber amounts to about one third of the total rubber area in the early 1980s, it is likely to fall to about 15% by the end of the twentieth century (see Table 6). The sensitivity of senile rubber supply to the price of rubber indicates that a rubber taxation policy geared to maintaining farmgate prices at a profitable level (rather than using a rigid formula to collect a specific proportion of export proceeds as tax) would lead to higher export levels. During 1980/81, the world price of rubber has varied considerably, with the New York price being anywhere between US$0.60/lb to US$0.78/lb. Using the formulae for cess and export taxes, the likely variation in farmgate prices derived from this would have been between B 14/kilo and B 19/kilo./l At B 14/kg, an estimated 31% of senile rubber would be likely to be harvested, while at B 19/kg the proportion would rise to about 54%. On an annualized basis, this is equivalent to a variation of 38,000 tons per year, or about 7% of 1981 production. Hence the short-term elasticity of supply (percentage change in production resulting from a 1% change in price) is about 0.3 at this price range. Hence, because of the diminishing importance of senile rubber in the long run, the effect on supply of rubber from senile trees, resulting from changes in prices, (e.g., due to changes in taxes) will lessen over time/2. Long-Run Response and Its Implications 6. Long-run supply is determined by the area being planted or replanted with rubber, the density of rubber trees and their innate yield capacity. New planting and replanting will be influenced by the prevailing level of farmgate rubber prices to the extent that current prices will affect long-run expectations. The basic decision is, however, based on the anticipated returns to farmers investments. New planting in Thailand is relatively sluggish at the moment, probably because the projected financial rate of return from replanting 1 ha of rubber is only in the 12-14% range (Table 15). Returns to the farmer-s own equity from replanting rubber tnder an ORRAF grant however are extremely attractive and are in the 25-30% range (Table 14). Under normal circumstances, therefore, farmers will wait for an ORRAF replanting grant rather than replant with their own (or commercially borrowed) resources. Unless there is either a major reduction in taxes (and hence an increase in the real price of rubber) or some form of financial encouragement for new planting (subsidized interest rates or a new planting grant), it is unlikely that the rate of new planting undertaken by farmers with their own funds will increase significantly from its present estimaLted level. /1 Per kilo dry rubber, assuming 20% scrap, 80% RSS3 quality sheet. /2 For example, a 10% price change - from B 20/kg to B 22/kg - would caluse senile production to increase by an estimated 22,000 tons in 1980 (4% of production) but only 13,00C0 tons (1.5% of production) in 1990. ANNEX 7 - 59 - Appendix 1 Page 4 7. Because the ORRAF replanting grants are attractive and ORRAF is a well-organized institution, it is likely that ORRAF will be able to maintain the present level of replanting of 50,000 ha per year and thus reduce the amount of senile rubber remaining in Thailand. With such a level of ORRAF replanting, the total area under senile rubber would decline from its 1980 level of just over 600,000 ha to just under 300,000 ha by 1995, i.e., from 39% to 16% of the total area. The base estimate for plantings, areas under rubber and production are given in Tables 4-8. These estimates assume that: (a) the World Bank-financed Second Tree Crops Project is taken up; (b) grants, interest rates and taxation policies remain as at present; (c) new planting under credit arrangements supported by ORRAF/BAAC would be unlikely to have a major impact under these conditions, and will probably stabilize at about 2,500 ha/yr; (d) planting with farmers' own resources would continue at about 15,000 ha/year (of which 90% would be new planting, and 10% replanting /1); (e) wages remain at about their present real level over time/2; and (f) rubber planted with farmers' own resources is tapped daily (Dl), but ORRAF replantings are 80% Dl and 20% D2 (alternate daily). 8. These assumptions have been incorporated into a simulation model for rubber production in Thailand which separates out the contribution of various sources of new plantings (under own resources or ORRAF), the types of rubber stock (seedling and clonal), and their yield capacity at different ages (immature, mature and senile). Projections thus obtained (the base case) and the assumptions are given in Tables 4-8. One of the more problematical aspects of model construction is the assessment of post- planting rates, types of plant materials and their average yield profiles. Accurate measurement of Thailand's rubber area or its rate of growth has not been possible, and in the past there have been differences in the statistics from various sources. HIowever, the most reliable information is provided by the Hunting Technical Services study of 1966/67, and the recent (May 1980) report by OAE based on satellite imagery. When account is taken of the probable underrecording of immature rubber (due to masking by intercrops, etc.), the satellite survey estimate of 1.42 million ha at the end of 1978 corresponds fairly closely to a 1980 area of 1.6 million ha. Assumptions on planting rates in this model have been geared to an estimated area under rubber of 1.0 million ha in 1960 and 1.6 million ha in 1980. The yield curves, planting rates and relative proportions of clonal to seedling material have been obtained from the various experts and authorities concerned with the rubber industry in Thailand. /1 This would be approximately equal to the rate achieved in the past 5 years but would be approximately half the rate of the past two decades (See Table 5). /2 If wages increase, as is likely, the production from senile rubber (about 15% of production in 1982 and 5% by 1995) would be lower. Real labor costs increasing at 3% p.a. through 1995 would reduce estimated production by about 25,000 tons/year, in 1995. ANNEX 7 - 60 - Appendix 1 Page 5 9. Provincial estimates were initially iterated in the model, and then modified to a limited extent until the model was able to generate estimated production which fitted actual prodaction over the period 1970-80 reasonably closely. Like any simulation model, there are some debatable assumptions. For example, the assumed level of clonal new planting in the early years of the simulation may well be too high. This is, however, likely to be compen- sated by the conservative assumptions for the yield profile. The overall historical fit of the model is, in any case, quite good,and can thus be considered to be a reasonably valid tool for examining the effect of changes in key parameters affecting production resulting from changes in policy./l Alternative Policy Scenarios and their Projection Implications 10. Depending on the relative importance (to Government) of tax revenues, short-term balance of payments, long-term growth of the industry, and the transfer of resources to rubber farmers, a policy for rubber may evolve in different ways. This section focuses on the simulation of alter- native scenarios of export taxation and production subsidies on future pro- duction. Potential Production with Export Tax Removed (High Case I) 11. Projected 1982 levies per kilo on exported rubber are B 6.04 (export tax) and B 1.59 (cess) based on a forecast export price of B 30/kg. By 1990 these are expected to rise to B 7.04 (export tax) /2 and B 1.84 (cess). As the farmgate price in Thailand is derived from the export price (more than 90% of rubber is exported), the effect of these taxes at the farm level (given /1 The comparison between the actual and predicted production in 1970-80 is as follows: Average- 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1970-1980 …(000_____--------------( 000 tons)…----…-------------------- Actual 289 318 337 368 382 349 393 431 467 534 540 401 Prediction of Model 289 311 327 346 366 389 414 442 471 499 526 398 /2 Based on (a) World Bank Commodities Division forecasts for rubber prices and (b) assumption that tax rates are adjusted to remain at 1981 real levels. - 61 - ANNEX 7 Appendix 1 Page 6 the competitiveness of the market structure) is to lower the amount that farmers receive per kilo by a similar amount. Consequently, a policy of reducing taxes on rubber would cause farmgate prices to increase. Indeed, if both cess and tax were removed, farmgate prices would be about 38% above the likely levels under the present system/l . In analyzing the effect of such an action on production, consideration should be given to the impact of changing prices on (a) tapping of existing rubber - both mature and senile - and (b) new plantings and replantings. 12. The effect of removing export taxes (but retaining the cess) would add between B 6 and B 7 per kg to the farmgate price of rubber over the next two decades. Because of the present high intensity of tapping, the short- term effect on production of mature rubber would probably be minor. However, such a price rise would increase the area of senile rubber tapped by about 60% (from about 50% to just over 80% of potential). The effect on replant- ing is difficult to estimate in that higher prices would make the returns from replanted rubber higher, but also raise the short-run opportunity cost of felling, particularly in areas where alternative employment is not avail- able. On balance, the effect on replanting would probably be close to neutral, as well over 90% of replanting is likely to be done by ORRAF, and ORRAF will probably be constrained to a level of about 50,000 ha/year by its absorptive capacity. The rate of new planting would certainly increase, but the extent of increase projected would have to be viewed as being highly subjective since little empirical evidence is available on farmers- actual long-term response to prices. In this case we assume that new planting would be limited to a total of just over 30,000 ha/year, or about double the rate assumed for the base case (or about equal to the area achieved in the past two decades). Tables 9-13 show the estimated plantings, area under rubber and production which would likely result from a policy of abolishing the export tax. Potential Production with New Planting under Grant (High Case II) 13. At present financial prices, the rate of return for new planting rubber is 12-14% (Table 15). At economic prices (i.e., without any taxes) it would be 18-20% (Table 16)./2 Without government support (i.e., grants or subsidized credit) the rate of new planting is expected to be about 15,000 ha/year (para. 7). However, if the system were freed of export taxes (i.e., the 18%-20% rate of return would hold), it is likely that substantially more planting would take place (para. 12). If Government /1 About 80% of this (30% of farm-gate price) would be accounted for by the export tax and the rest by the cess (80% of farmgate price). /2 In both cases, the opportunity cost of land is taken to be zero. - 62 - ANNEX 7 Appendix 1 Page 7 needs to maintain its rubber taxation for revenue reasons,/l then one way to mitigate the present taxation level-s depressing effect on rubber production could be to introduce financial support for new planting. By introducing a new planting grant sufficient to raise the financial rate of- return on farmers- own investment to the 18-20% level (i.e., setting the grant at 60% of the present ORRAF level /2), the depressing effect of taxation on the new planting rate would be largely neutralized. Administratively a grant system would be cheaper to operate than an equivalent subsidized credit scheme, as no collection mechanism is required. 14. On the basis of a new planting program of 32,500 ha/year, the cost of such a grant scheme would rise to about $35-40 million annually by 1990 or about 15% of the export tax revenues in that year. However, it would have no significant impact on production until 1991. 15. Tables 19-22 give estimated plantings, areas and production assuming the introduction of a new planting grant scheme in 1982 in addition to the replanting grant (see para. 12), but that taxes stay at the present levels. Short-run production would be well below the alternative! approach of reducing taxes, but because of the opportunity for better control of plantings and hence more input use, particularly in the immature stage (through ORRAF supervision), long-term production is likely to be higher than with the scenario of reduced taxes only. Potential Production from New Planting with Grant and Reduced Export Taxes (High Case III) 16. A realistic scenario assuming (a) new planting under grant (similar to High Case I), and (b) reduction of export taxes from the presetnt farm- level equivalent of B 6 to B 7 per kg to B 4 (equivalent to two-thirds reduction) is given in Tables 23 - 25. In this scenario (High Case III), the financial rate of return per ha of new planting would be more than 20'%. Hence, it is also assumed that, in addition to 32,500 ha of new planting under grant (after 1983), some 5,000 ha per year of other new planting from own resources (for example, in less accessible areas) would also take place. In the short term, at the average rubber farm level, gross income' from rubber would increase on average, by about 28% (20% due to price alone, 8% due to greater area tapped). In the median case of typical (median) farme!r in the South (profiled in Appendix 3), this would probably only have a /1 At present rates, export rubber taxes would amount to about $165 million in 1982, $185 million in 1985 and over $250 million by 1990. /2 A new planting grant, equivalent to 60% of the ORRAF replanting grant would allow the financial rate of return for planting one hectare of rubber to increase from 13.5% (Table 15) to 19.7% (Table 18). This latter figure is virtually the same as the rate of return, without taxes or cess, of 19.4% (Table 1.7). ANNEX 7 - 63 - Appendix 1 Page 8 price effect (increasing his rubber income by 20% or an initial 8-10% increase in per capita income)./l The effect on public revenues would be a reduction in taxes collected (averaging about $110 million/year) compared with maintaining taxes at the 1981 real level. 17. By doubling the rate of new planting through a combination of reduced taxes and a new planting grant, long run production would increase substantially as indicated below: 1990 1995 2000 Area under rubber (mil ha) 1.96 2.14 2.33 Production (-000 tons) 830 1,120 1,450 Exports ('000 tons) 750 1,010 1,310 Export Value ($ million)/a 1,270 1,710 2,210 /a 1981 constant dollars. By the turn of the century, exports would be valued at more than $400 mil- lion annually, higher than if no changes were made. The long-run impact at the farm level of reducing taxes, hence increasing prices by B 4/kg, in the case of the typical farm profile (Appendix 3) would be to raise farm income by 16%; while the impact of the new planting grant would ensure the planting up of the abandoned area (which could contribute about 14% of net income). Overall, such changes would raise long-run income at the farm level by about one third. The cost of supporting the new planting grant would amount to $35-40 million annually at full development and could be readily covered by the reduced export tax revenue. In real terms, export taxes would likely be as follows: 1982 1990 2000 Exports ('000 tons) 588 (548)/a 750 1,260 Previous tax rate (B/kg) 6.04 (6.04)/a - - Reduced tax rate (B/kg) 2.04 3.04 3.04 Revenues (1981 constant $ million) 59 (165) 114 199 /a Figures in brackets represent likely exports, tax rate and revenues for 1982 without any change. /1 No increase in area is expected because abandoned rubber yield is not expected to be profitable and existing senile trees would already be tapped to the maximum. -64-- ANNEX 7 Appendix 1 Page 9 18. Although the tax collected would fall in the short term (from $165 million to $60 million in 1982), by the turn of the century, the increased exports would offset the reduced rate, and tax revenues would in real terms be above the 1981/82 level. Summary of Alternative Projections 19. Key comparators between the "base" estimate and the three "high" estimates are as follows: Elmerging Trend High estimate Year (base case) Case I /a Case II /b Case III /c Annual new plantings (ha) 1986 16,000 32,500 32,500_ 37,500 Annual replanting (ha) 1986 51,500 52,500 52,500 52,500 Total area under rubber 1990 1.78 1.91 1.9L 1.96 (million ha) Total area under rubber 2000 1.94 2.24 2.24 2.33 (million ha) Production/yr (000 tons) 1982 580 630 580 620 1983 610 650 610 640 1984 640 680 640 670 1985 660 700 660 690 1986 690 720 640 710 1990 810 830 81( 830 1991 - - 870 1995 1,010 1,070 1,08( 1,120 2000 1,190 1,370 1,400 1,450 /a Total removal of export tax (but: retention of cess); replanting "grant" at 60% of present ORRAF level; no new planting grant. /b Taxes at present level: both new planting and replanting "grant" at 60)% of present ORRAF level. /c Two-thirds reduction of export tax (i.e., equivalent reduction of B 4/'kg at the farm level) and both replanting and new planting grants at 60% of present ORRAF level. Although some short-run effect (in the next few years) will be seen as a result of more tapping of senile rubber (see paras. 4-5), the major impact of increasing real rubber prices would mainly be felt towards the turn of thi's century. ANNEX 7 - 65 - Appendix 1 Table 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Effect of Rubber Prices, Labor Rate and yield on Short-Run Supply Mature rubber Senile rubber (Daily tapping) Yield (kg/ha) 200 250 300 350 400 450 700 1,000 1,300 Output (kg/md) 2.2 2.5 2.7 2.9 3.1 3.4 4.7 6.7 8.6 Wage Rate ------------------ Cut-off rubber price /a --------------- (B/day) (B per kg DRC) 30 15.0 13.2 12.2 11.4 10.6 9.7 7.0 4.9 3.8 40 20.0 17.6 16.3 15.2 14.1 12.9 9.4 6.6 5.1 50 25.0 22.0 20.4 19.0 17.6 16.1 11.8 8.3 6.4 60 30.0 26.4 24.5 22.8 21.2 19.4 14.1 9.9 7.7 70 35.0 30.8 28.5 26.6 24.7 22.6 16.5 11.6 8.9 80 40.0 35.2 32.6 30.4 28.2 25.8 18.8 13.2 10.2 /a Farmgate price below which short-term production is unprofitable (i.e. cost of labor and materials exceed the value of output). Materials costs are calculated at 10% of labor costs. Source: Base data estimated by Second Tree Crops Project appraisal mission. - 66 - ANNEX 7 Appendix 1 Table 2 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Estimated Harvested Yields of Senile Rubber under Different Price Assumptions A. Estimated Frequency Distribution of Financial Wage Rates in Rubber Areas Baht/man-day % of area 0-30 25 (family labor) 30-40 10 40-50 25 50-60 25 60-70 10 70+ 5 B. Estimated Distribution of Senile Rubber Yields, 1981-85 and Percentage Harvested Yield level (kg/ha) Up to 225 225-275 275-325 325-375 375-425 425+ Total senile % land in group 15 25 30 15 10 5 Av. 100 Potential yield (kg/ha) 200 250 300 350 400 450 297 Farmgate price ------ % of potential harvested/a------- - kg/ha/b (B/kg) 10 21 23 23 23 24 26 67 12 22 23 23 23 31 32 74 14 25 27 30 32 35 44 92 16 27 31 34 40 49 59 112 18 30 37 45 55 62 78 143 20 35 46 57 67 76 87 176 22 45 60 70 80 87 93 212 24 55 72 83 88 93 97 241 26 65 84 89 93 97 99 262 28 75 89 94 97 99 100 276 30 85 94 97 99 100 100 286 32 89 96 99 100 100 100 291 /a Based on the assumption that farmers will continue producing in the short run just up to the point at which marginal cost (i.e., labor rate + 10%) equals marginal revenue (i.e., yield per man-day x price). Derived from Tables 1 and 2A. /b Figures in this column estimate the overall average harvested yield of senile rubber per hectare for different farmgate prices. Source: Base data estimated by Second Tree Crops Project appraisal mission. - 67 ANNEX 7 Appendix 1 Table 3 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Impact of Farmgate Price on Annual Production from Senile Rubber - 1981-85 Proportion potential Farmgate price senile rubber Tons/year (Baht/kg) harvested /a ('000) /b Total Increment Total Increment Total Increment 10 23 35 2 2 3 12 25 38 2 6 10 14 31 48 2 7 11 16 38 59 2 10 15 18 48 74 2 11 17 20 59 91 2 12 18 22 71 109 2 10 16 24 81 125 2 7 11 26 88 136 2 5 7 28 93 143 2 3 5 30 96 148 2 2 3 32 98 151 /a Derived from Table 2. /b Based on 520,000 ha, the estimated average quantity of senile rubber during the period 1981-85, and an average potential yield of 297 kg/ha giving total potential production of 154,000 tons/year. THAILAND AGRICULTURAL PROGRAMA AND POLICY PRIORITIES_ NEW PLAN4TINCS AND REPLANTINGS, BY TYPE OF RUBBER AND SOURCE OF FINANCING - BASE CASE, 1960 2005 TmOUS'w HEcfAlES YEAR 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1979 1979 1980 198 1982 1993 OfRRAF RET'LANTING - - 3.9 12.2 3.6 5.9 4.9 3.9 6.1 11.0 12.3 12.9 19.1 24.8 26.1 21.5 23.6 25.8 36.3 44.6 41.6 50.0 50.0 50.0 KPt-IANGl OWN RESC 1.6 1.6 1.6 2.1 2.1 2.1 2.5 2.5 3,0 3.0 3.0 2.5 2.5 2.3 2.1 1.9 1.6 1.6 1.6 1.6 1.5 1.5 1.5 1.5 NEU FLAMNGIH OkriAF - - - - - - - - - - - - - - - - - - - - - - 1.0 0.51 NEUl PLANTING 0OWN RESC 14,4 14.4 14.4 18.7 18.7 18.7 22.5 22.5 27.0 27,0 217.0 22.5 22.5 20.9 18.7 17.3 14.4 14.4 14.4 14.4 13.5 13.5 13.5 13.5 S11E1INGThS 20.0 20.0 20.0 20.0 20.0 16.0 16.0 16.0 16.0 16.0 10.0 10.0 10.0 10.0 10.0 - - - - - - - - - TOTAL FLANT1INIS GROSS 36.0 36.0 39.9 53.0 44.4 42.7 45.9 44.9 52.1 57.0 52.4 47.9 54.1 58.0 56.9 40.7 39.6 41.8 52.3 60.6 56.6 65.0 66.0 U.S AlkEA FILLED -1.6 -1.6 -5.5 -14.3 -5.7 -8.0 -7,4 -6.4 -9.1 -14.0 -15.3 -15.4 -21.6 -27.1 -28.2 -23.4 -25.2 -27.4 -37.9 -46.2 -43.1 -51.5 -51.5 -52.5 MET NEU AREA 34,4 34.4 34.4 38.7 38.7 34.7 38.5 38.5 43,0 43.0 37.0 32.5 32.5 30.9 28.7 17.3 14.4 14.4 14.4 14.4 13.5 13.5 14.5 15.0 0'. …-- - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - ------ - - -- - - - - - - - - - - - ----- - - - - - - - - - - - - - -- - - - - - - - - - - - - - -- - - - - - - - - - - - - - - YEAR 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 19"9 2000 2001 2002 2003 2004 2005 …-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -…-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - OFRAF RYILANTINO 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 550.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 REPIANTIITG OWN '4SC 1.5 115 1.5 1.5 1.5 1,5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.s 1.5 1.5 1.5 1.5 1.54 1,5 1.5 N'EW PI.40TING ORRAF 2.0 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 NEW PLAIT1NG OWAN RESC 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 13.5 SEECLThGS ~ ~ -- --- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - - -- - --- - - -- - - - -- - - -- - - -- - - -- - - -- - --- - - TOTAL PLANTINGS GROSS 67.0 67.5 67.5 67.5 67.5 67,5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 67.5 …-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - AREA FELLED -51.5 -511.5 -51.5 -51.5 -541.5 -51.5 -51,5 -511.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.5 -51.S …- --~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- . ------- ------- ------- - NET NEWl AREA 15.5 16.0 16.0 16.9 16.0 16.0 16.0 16.0 16.0 16.0 1A.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 16.0 £8.5..... ....55 s.55EZZ .....l*5035535 . 3 ........ .. . SS =53 30* Etn 455 333 ..... 5535 2558 *50 Di THAILAND AGRIC'ULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER ARrA. BY TYPE OF RUBBER AND SOUIRCE OF FINANCING - BASE CASE. 1960 - 2005 THOUSAIND HECTARES YEAR 1960 1970 1?75 1960 1981 1982 1983 1954 1985 1986 1987 198 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2005 Jff;1L I w,S 1015 1185 1225 1225 1225 1225 3225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 MBRAF 1EFLANJIIHGS - 64 168 340 390 440 490 540 590 640 690 740 790 840 890 940 990 1040 1090 1140 1190 1240 3340 159 RUA'LANIL1' 060i RES 2 25 36 44 46 47 49 50 52 53 55 56 58 59 61 62 64 65 67 68 70 71 74 62 JP0 EW PLANT1INGS - - - - - 1 3 5 7 10 12 15 17 20 22 25 27 30 32 35 37 40 45 571 NEW OJWN PECS 14 225 327 398 412, 425 439 452 466 479 493 506 520 533 5447 560 574 587 601 614 628 641 668 736 ~,DJ FOR FELLING -2 -89 -265 -364 -436 -487 -539 -590 -642 -693 -745 -796 -848 -899 -951 -1002 -1054 -1105 -1157 -1208 -1260 -1311 -1414 -1672 NET TOTAL AREA 1030 1411 15553 1624 1637 1652 1667 1682 1698 1714 1730 1746 1762 1778 119 1810 1826 1842 1858 1874 1890 1906 1938 2018 S..' P THAILAND AGRICULTURAL PROGRAM AND) POLICY PRIORITIES TOTAL RUBBER AREA, BY AGE GROUPINGS - BASE CASE, 1960 - 2005 IiOISAMD HECTARES YEAR 1960 1970 19M' 1980 1981 1982 2983 1984 1985 1984 1987 1983 1989 1990 1991 1992 1993 1994 1995 1996 1997 1 998 2000 200 lhhtAT[JRE 266 392 419 406 413 423 448 476 5102 517 524 535 537 5139 5,40 540 540 540 540 540 540 540 5405 40 hATURE 429 496 535 638 664 702 722 742 /63 796 824 849 882 908 9218 961 989 1017 1042 1064 1090 11222 1181 2324 5iNIIE 334 522 599 579 5519 5289 496 465 433 402 382 363 343 332 327 309 2197 285 276 271 260 244 217 154 NHE TOT(.1 AREA 1030 1411 1553 2624 1637 1652 2667 1682 1698 1714 2730 2746 1762 1778 1794 1810 1826 1942 1858 1874 1890 1906 1938 2019 I~I EoI .I:j THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES YIELDS USED TO CALCULATE TOTAL RUBBER PRODUCTION - BASE CASE I(B/HA 1 2 3 4 5 6 7. 8 9 10 it 12 13 14 15 16 17 19 19 20 21 22 23 24 DUll RE'SOURCES SLDIGRUBBRER GI - - - 8 209 332 408 464 506 536 553 543 508 459 409 361 317 279 243 CLONAL RUDER DI - - - - 161 419 663 816 927 1012 1072 1106 1087 1016 918 817 721 635 558 487 WI1TH ORRAF GRANT CLOIJAL RUBPER DI - - - - 196 S08 794 975 1223 1221 1308 1372 1370 1302 1198 1092 988 891 798 711 MflkW RUDDER D22- - - - - - - 172 483 800 1004 1132 1222 1297 1367 1435 1471 1461 1421 1375 1329 1286 1244 fNC EXTRA 2YR GRANIT - 35 ?2 122 128 125 122 105 77 .55 58 80 88 75 65 60 45 27 20 20 20 10 - - YIELD FORE2GNE AIIJUSIhNEDI -FILLIN4G 156 156 156 156 156 156 256 156 156 156 156 156 156 156 156 156 156 156 156 156 156 156 256 156 -- - - - - -- - - - - - - - - - - - - - - - - - -- - -- - - - -- - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - -- - -- - - - - - 25 26 27 28 29 30 32 32 33 34 35-48 (JUl RESOURCES FEDIMIN3 f~U[:DE 156 156 156 156 156 156 256 156 1516 156 156 FlOrlAt RABDEE DI 425 519 598 156 156 256 256 156 156 156 156 Wifll ((REAF GRANT CLIOtAL RLIRR'ER DI 633 686 737 690 156 156 256 856 156 156 156 CLONAL RiUDDER D2 1202 1156 1106 1048 986 925 865 937 1012 999 156 -. INC EXTRA "TR GRANT - - - - - - - - - - - YIELD FOREGONE ADIJUSIMEHT -FELLING 156 156 156 156 156 156 256 156 156 156 156 THAILAND AGRICULTURAL PROGRAM{ AND POLICY PRIORITIES TOTAL RUO)BER PRODUCTION BASS (WITH ORRAF REPLOITIN4G AT 50,000 IIAtIR MM0 1902) YEAR 19082 IM 1984 1185 1906 1087 108 10M 1100 1011 1992 3993 1094 IM0 109 1997 1091 1I0 200 2001 2002 2003 200 2005 1UL81L 61 N llkaB 81AIF 124 150 179 2o9 243 284 Ill 301 432 481 338 511 649 704 756 801 8D6 88 924 055 983 t0il 1ton 1Q4 REPLAN1ED OWN 1L3 28 10 31 12 32 12 32 31 30 10 29 29 28 28 28 2? 2? 27 27 2? 2? 2? 27 2? ~~~W4 PLANTING- - 0 1 4 6 12 Is to 22 25 29 32 14 10 42 NEW8 YEANIS GM RS 255 267 276. 284 289 287 284 280 274 260 263 240 256 252 246 24 4 243. 242 241 241 241 243 245 24? OLD1 SEEDIUNGS 252 248 245 24 234 229 221 218 212 208 203 200 10? 10 194 102 391 193 l 191 M9 191 101 10 019 AoiJsITh FOR1 YElLI -74 -84 -03 -100 -108 -116 -i24 -132 -141 -149 -is? -165 -173 -181 -189 -197 -205 -213 -2721 -229 -237 -245 -253 -241 … - - - - - - --- - - - - .- -------------~~ ~~ ~ ~ ~~~~~ ~~~~~~~~~~~~~-- ------------ - - ----- ------ TOTAL. 583 612 636 664 601 715 744 177 8*38 841. NO 920 944 1007 1047 1408 1121 11I6 1187 1214 1238 1263 1218 1311 M4ay 12, 19E]1 co~I 3mIi 0 l1. THAILAND AGRIC'ULTURAL PROGRAM AND POLICY PRIORITIES NEW AND REPLAN4TINGS, BY TYPES OF RUBBER AND SOURCE OF FINANCING (NO EXPORT TAX) 1960 - 2005 THOUSAD HECTARES YEAR 1960 1961 196 IS'63 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198 1981 1912 1983i DLRAF IMELANTIN6 - - 3.9 12.2 3.6 5.9 4.9 3.9 6.1 11.0 12.3 12.9 19.1 24.8 26.1t 21.5 23.6 25.9 36.3 44.6 41.6 50.0 50.0 50.0 REPLANTING OWN RESC 1.6 1.6 1.6 2.1 2.1 2.1 2.5 2.5 3.0 3.0 3.0 2.5 2.5 2.3 2.1 1.9 1.6 1.4 1.6 1.6 1.5 1.5 1.9 2.2 NEW PLANTING ORRAF - - - - - - - - - - - - - - - - - - - - - - 4.0 6.0 NEW PLANTING OWN RESC 14.4 14.4 14.4 18.7 18.7 18.7 22.5 22.5 27.0 27,0 27.0 22.5 22.5 20.9 18.7 17,3 14,4 14.4 14.4 14.4 13.5 13.5 17.3 20.2 SEEDLINGS 20.0 20.0 20.0 20.0 20.0 16.0 16.0 16.0 16.0 16.0 10.0 10.0 10.0 10.0 10.0 - - - - - - - - - TRIAL PLANTINGS GROSS 36.0 36.0 39.9 53.0 44.4 42.7 45.9 44.9 52.1 57.0 52.4 47.9 54.1 58.0 56.9 40.7 39.6 41.9 52.3 60.6 56,6 65.0 73.2 78.4 AEEA FELLED -1.6 -1.6 -5.5 -14.3 -5.7 -8.0 -7.4 -6.4 -9.1 -14.0 -15.3 -15.4 -21.6 -27.1 -28.2 -23.4 -25.? -27.4 -37.9 -46,2 -43.1 -51.5 .-51.9 -52.2 N'ET NEW AREA 34.4 34.4 34.4 38.7 38.7 34.7 38.5 38.5 43.0 43,0 37.0 32.5 32.5 30.9 20.7 17.3 14.4 14.4 14.4 14.4 13.5 13.5 21.3 26.2 YEAR 1984 1985 1986 1987 1988 1999 1990 1991 1992 1993 1994 1995 19 1997 1998 1999 2000 2001 2002 21003 2004 2005 O1Y.AF REPLANTING 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 58.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 REPLANTING OWN RESC 2.5 2,5 2.5 2.5 2.5 2,5 2.5 2,5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 NEW ?LANTINIG OkRAF 8.0 10.0 00 10.0 tl 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 10.0 20.0 10.0 NEW PLANTING OWN RESC 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 212.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22,5 22.5 SEEDLINGS - - - - - - - - - - - - - - - - - - - - - - TOTAL PLANTINGS GROSS 83.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 85.0 AREA FELLED -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 -52.5 NET ENF AREA 30.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32,5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 32.5 5335333 5335535 3535* 3333 5*3333 5333 Maz335o .M.C .335M.3353353353 53333 5333535533 C.535535 ........... 53353335533 s5=CM5555=353 3 & THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER AREA, BY TYPE OF RUBBER AID SOURCE OF FINANCING - HIGH CASE I (NO EXPORT TAX). 1960 - 2005 TO0USAID LlahRLS YEAR 1960 1970 1975 1980 1981 1982 1913 1984 1985 1986 1987 1988 1989 1990 1991 l92 1 1994 l 1996 1 1998 2000 2005 SLEG.LINGS 1015 1185 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 1225 D0TFF RTLAN11INGS - 64 168 340 390 440 490 540 590 640 690 740 790 840 890 940 990 1040 1090 '140 119Q I249 1340 !590 fi,;,iiED &Gii RES 2 2D J6 44 46 48 50 52 55 57 60 62 65 67 70 72 75 77 80 82 85 87 92 105 a 6FAF NEW f'LAhTINCS - - - - - 4 10 la 28 38 48 58 68 78 88 98 108 118 128 138 148 IsO 178 228 NEW 0JH FECS 14 225 327 398 412 429 449 472 494 517 539 562 584 607 629 652 674 697 719 742 764 7a7 812 944 ,AD$J FOW FELLIldO -2 -89 -205 -384 -436 -488 -540 -593 -645 -698 -750 -803 -855 -908 -960 -1013 -1065 -1118 -1170 -1223 -1275 -1328 -1433 -1695 NET MAL AREA 1030 1411 1553 1624 1637 1658 1I85 1715 1748 1780 1813 1845 1878 1910 1943 1975 2008 2040 2073 2105 2138 2170 2235 2398 =-z.n. nsa... an==.=. =i==ZtZ ass...: Sn.... n.s. an.... nasna 3sss=ts$$ $4UlJ -=3 S =assas 5.ss ass... nfl... :s==sas ass.... .s;ss. 55=:s *.-=-s 3:3:ss 3555535 ...=... .I IXD:SI lo x 0H THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER AREA,. Y AGE GROUPINGS - HIGH CASE I (EXPORT TAX REMOVED), 1960 - 2005 TIIOUSAMD HECIARES YEAR 1960 1970 1975 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2005 1IMMATiJE 266 392 419 406 413 430 467 511 554 58? 611 640 660 671 878 680 680 680 680 680 680 680 680 680 HiATARE 429 496 535 638 664 701 722 742 763 796 824 849 882 915 94? 996 1041 1088 1129 1169 1212 1262 1356 1586 SENILE 334 5212 599 579 559 527 495 463 430 398 377 35? 336 324 J1B 299 286 273 263 256 245 228 199 131 NET TOTAL ARCi 1030 1411 1553 1624 1637 1651 1605 1715 1748 1780 1813 1845 1878 1910 1943 1975 2008 2040 2073 2105 2138 2170 2235 2398 L ......... sss . .as.. .... ............. ... ........ .. ..... Iti! t1L AGRICULTURAL PROGRAM AND POLICY PRIORITIES YIELDS USED TO CALCULATE TOTAL RUBBER PRODUCTION - HIGH CASE I (NO EXPORT TAX) FG/HA … ---- -- - - - - -- - - -- -- - - - - - - - - -…-- - - -- ------ - - - - -- - - - - -- - - - -- - - - - ---- - - -- - - - - ---- -- …-- -- - - - - - - - -- - - - - -- - - ---…- - - - 1 2 3 4 5 a 7 8 9 20 11 12 23 14 IS 16 27 to 19 20 21 22 23 24 … … … …… - ___ - __ - ------- - - --- - _ _ - - - - _ ___ - - __-------…-- __ _ _ ------ - __ _ ----------- __ _ _ ----------- ___ __ __ ___ _ _ _ __ - - - - - __ - _ _ 0UN RESOURCES SEDLING RUBBER - - - - - - - - 8l 209 332 408 464 506 536 553 543 508 459 409 361 317 279 250 CL0NAL RUPBER 02 - - - - - - - - 162 419 663 816 927 1012 1072 2206 1087 1016 918 817 721 635 55 487 1ITH OfiRAF GRANT CL0tIAL RUBBER Dl - - - - - - - - 196 508 794 975 1113 221 1308 1372 1370 1302 1198 1092 988 B91 m 711 CLOR1AL RUDDER D2 - - - - - - - - 172 483 800 1004 1132 1222 1297 1367 1435 1471 1461 1421 1375 1329 1286 1244 INC EXTRA 2YR GRANT - 35 92 122 128 125 I22 105 77 55 58 80 88 75 65 60 45 27 20 20 20 10 - - YIELD FiREGONE ADJUSThENT -FELLING 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 250 0% 25 26 27 28 29 30 31 32 33 34 35-48 OLIUN RLSOURCES SEFDLLING R11E:11ER 250 250 250 250 254 250 250 250 250 250 250 CLONAL FRUBER DI 425 519 598 250 250 250 250 250 250 250 250 WI1O 0RRAF GRArl I CL0NAL FUDIER Dl 633 686 737 690 250 250 250 250 250 250 250 (D i CIDNAL RUBBER D2 1202 1156 1106 1048 986 925 865 937 1012 S9S 250 INC EXI lHAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTARE REV PLANT WITHOUT GRMti PRESENT TAX LEVELS 1.981 CONSTANT PA1T 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 RUBPER SALES 0 0 0 0 0 0 0 6570 16530 21740 25400 26120 30130 31570 32210 31090 28970 27110 TOTAL COSTS 16970 4910 3980 4120 4060 3520 3440 14900 10200 10670 10900 11640 11330 11630 11630 12060 11630 14350 NET INCOlE -16970 -4910 -3980 -4120 -4060 -3520 -3440 -8330 6330 11070 14500 16480 16800 19940 20580 19030 17340 12760 I 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS RUBEER SALES 24930 22430 20140 18020 15840 13870 15950 17540 14460 6380 0 0 0 0 0 0 0 449000 TOTAL COSTS 11370 11870 11370 11400 11860 11350 11910 12520 12100 5190 0 0 0 0 0 0 0 282880 NE1 INCOlE 13560 10560 8770 6620 3980 2520 4040 5020 2360 1190 0 0 0 0 0 0 0 166120 STREAIK Na,.E INTERNAL RATES OF RETURN FOR NET STREAMS :=S:= ~ ~ ~ 33 =========s====== ==s= N,T 13.484 z & LIE TI,AILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASN FLOW O HECTARE NEW PLANT WITHOUT GRANT EXPORT TAX SND IS19 CON9TANT IAIT 1 2 3 4 5 . 4 7 8 9 10 11 12 13 14 15 16 17 18 … - - - - - _ - __ - _ --__ ------------_-----_-____-___-___-_-_______----- … ……-…_---------------… RUBBER SALES 0 0 0 0 0 0 0 8576 21577 28377 33155 36705 39329 41208 42044 40582 37815 35387 TOTAL COSTS 16970 4910 3980 4120 4060 3520 3440 14900 10200 10670 10900 11640 11330 11630 11630 12060 11630 14350 NET INCOME -16970 -4910 -3980 -4120 -4060 -3520 -3440 -6324 11377 17707 22255 25065 2n7 29578 30414 29522 26185 21037 =a_;..:: === ======= 5::: :. ........ 5.5:555 5a5=a 5X:45 a:=::.. S...... a...:.. sans. Usass.. =5aas sas.. S ass.. sass... sass. :.= = =3 00 I 20 21 22 23 24 25 26 27 28 2? 30 31 32 33 34 35 TOTALS RUBBER SALES 32541 29278 26289 23522 20676 18105 20820 22995 18875 8328 0 0 0 0 0 0 0 586080 TOTAL COSTS 11370 11870 11370 11400 11860 11350 11910 12520 12100 5190 0 0 0 0 0 0 0 282880 NET INCOME 21171 17408 14919 12122 8816 6755 8910 10375 6775 3138 0 0 0 0 0 0 0 303200 ====== … *====== =-===== ==a=:==== ass.... 535zg =5z5. 5z5z555 ==xaS= aam-ass as 53 saxss xzsassE xza zss. sassaa 22=.. azs=:. STREAM NAhE INTERNAL RATES OF RETURN FOR NET STREAMS NIT 18.T11 m ;31: THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOV OE HECTARE NEU PLANT NO GRANT EXPORT TAX AND CESS REEED 1981 CONSTANT BAtT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 RUBBER SALES 0 0 0 0 0 0 0 9097 22889 30103 35171 38938 41721 43715 44601 43050 40115 37539 TOTAL COSTS 16970 4910 3980 4120 4060 3520 3440 14900 10200 10670 10900 11640 11330 11630 11630 12060 11630 14350 NET INCOME -16970 -4910 -3980 -4120 -4060 -3520 -3440 -5803 12689 19433 24271 27298 30391 32085 32971 309'0 28485 23189 =33333 3===. ===_. 3333333 33333= Z_==Y 3ssC3 = .....a =3=3 _=_= 3333g= 533333 =3 ==:= ==3=: = =S3S =--= =8z=3 -_____ ---------- -___ __ - - -- ___ - __ __ ___--------------------------------------------_--------------------- -------- --------------- O 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS __ -_---_-_-_-_--_ - …---------_ ----------------------------------------------------… -_-____ ___-_--_-- -… - -… - - - -- - --------------… RUBBER SALES * 34521 31059 27888 24952 21934 19206 22086 24288 20023 8834 0 0 0 0 0 0 0 621730 TOTAL COSTS 11370 11870 11370 11400 11860 11350 11910 12520 12100 5190 0 0 0 0 0 0 0 282880 NET INCOHE 23151 19189 16518 13552 10074 7856 10176 11768 7923 3644 0 0 0 0 0 0 0 338850 STREAH NAHiE INTERNAL RATES OF RETURN FOR NET STREAiS N.T 19.435 ii' 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTAhE NEW PLNT WITH PRESENT TAXES AND C0 3A 6RMT 1981 CONSTANT BAHT …-- ---- ---------- ----------- ----- ------------ ----- ------------- - -…--…----- ---- --------------… 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 ORRAF CIANT 7740 2178 1806 1938 1950 1752 1722 1728 0 0 0 0 0 0 0 0 0 0 RUBBER SALES 0 0 0 0 0 0 0 6570 16530 21740 25400 28120 30130 31570 32210 31090 28970 27110 TOTAL COSTS 16970 4910 3980 4120 4060 3520 3440 14900 10200 10670 10900 11640 11330 11630 11630 12060 11630 14350 NET INCONE -9230 -2732 -2174 -2182 -2110 :1768 -1718 -6602 6330 11070 14500 16480 18800 19940 20580 19030 17340 12760 ---------------------- ---------- -…-- ---------------- ----------- ---------------…------------… I 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS -----------~~ ~~~~~~ ~ - ----- __ --- --- ------ ------ --- -- __ ----------------------------------_--------_ - __ - - - -- - ------------------- ---------------------- 0 CRRi GRANT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 20814 1 RUBBER SALES 24930 22430 20140 18020 15840 13870 15S50 17540 14460 6380 0 0 0 0 0 0 0 449000 ,JTAL COSTS 11370 11870 11370 11400 11860 11350 11910 12520 12100 51O 0 0 0 0 0 0 0 282880 NET INCOtlE 13560 10560 8770 6620 3980 2520 4040 5020 2360 1190 0 0 0 0 0 0 0 186934 STREAI NAlE INTERNAL RATES OF RETURN FOR NET STRAS 9;T 1M709 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES NEW PLANTIN. AwnD RpEPlATINGS. BY TYPE OF RUBBER ANID SOURCE OF FINANCING - HIGH CASE II (NEW PLANTING GRAMT) 1960 - 2005 THOUSAND HECTARES YEAR 960-1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 19 83-2005 ORVAF GULANI1IG - 3.9 12.2 3.6 5.9 4.9 3.9 6.1 11.0 12.3 12.9 19.1 24.8 26.1 21.5 23.6 25.8 16.3 44.6 41.6 50,0 50.0 50.0 50D0 REPLAPTING DUWN RESC 3.0 3.0 4.0 4.0 4.0 4.8 4.8 5.7 5.7 5.7 4.8 4.8 4.4 4.0 3.6 3.0 3.0 3.0 3.0 2.9 2.9 1.9 2.1 2.5 NEW ItANTI6G OhRAF - - - - - - - - - - - - - - - - - - - - - 21.3 26,2 32.5 IEU PLANTING UWN RESC 13.0 13.0 16.8 16.8 16.8 20.3 20.3 24.3 24.3 24.3 20.3 20.3 18.8 16.8 15.6 13.0 13.0 13.0 13.0 12.2 12.2 - SEECOLEGS 20.0 20.0 20.0 20.0 16.0 16.0 16.0 16.0 16.0 10.0 10.0 10.0 10.0 10.0 - - - - - - - - - - TOTAL PLANTINGS GROSS 36.0 39.9 53.0 44.4 42.7 45.9 44.9 52.1 57.0 52.4 47.9 54.1 58.0 56.9 40.7 39.6 41.8 52.3 60.6 56.6 65.0 73.1 78.3 85.0 AREA FELLED -1.6 -5.5 -14.3 -5.7 -8.0 -7.4 -6.4 -9.1 -14.0 -15.1 -15.4 -21.6 -27.1 -28.2 -23.4 -25.2 -27.4 -37.9 -46.2 -43.1 -51.5 -51.8 -52.1 -52.5 --- NET NEU AREA 34.4 34.4 3c.7 38,7 34.7 18.5 38.5 43.0 43.0 37.0 12.5 32.5 30.9 20.7 17.3 14,4 14.4 14.4 14.4 13.5 13.5 21.1 26,2 32.5 1 Yrs-U==W; ..4-= Zaa .. ~ratX atss .... a ....... a ar ....a= .... = a ....s =saa saaa lZat- .==r .....s =aS== -=z=z .s=Xa= .==: .=== .ssr ..... ..w (0- 1 F THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER AREA BY TYPE 01? RJBBEk( AND SOURCE OF FINANCING - HIGH CASE II (NEW PLANTING GRANT),* 1960 - 2005 ThOUSAND ICTARES YER 1960 1970 1975 1980 1901 1902 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 I99 I99 199 1996 191 19 200 00 5EfELINL3S ~~~~1015 1185 1225 12125 1225 1225 1225 12275 1225 1225 i1,225 122 1225 1225 1225 1225 1225 t225 1225 1225 1225 1225 1225 1225 VED: RLNG INGS- 64 168 340 390 440 490 540 590 640 690 740 790 840 890 940 990 1040 1090 1140 1190 1240 1340 1590 REPLANTED OWINRES 2 25 36 44 46 48 50 52 55 57 60 62 65 67 70 72 75 77 0 92 8872 10 IIRIAF NEIl PLANTINGS - - - - ~~~~~~ ~~~21 47 s0 112 145 177 210 242 275 307 340 172 405 437 470 502 535 600 762 NEU OWN RECS 14 225 327 398 412 412 412 412 412 412 412 412 41 42 42 42 42 42 42 42 42 42 42 2 ADJ FOR FELLING -2 -89 -205 -384 -436 -488 -540 -592 -645 -697 -750 -802 -855 -907 -960 -1012 -1065 -1117 -1170 -1222 -1275 -1327 -1432 -1695 NET TOTAL AREA ~~1030 1411 1553 162.4 1637 1658 1685 1717 1)50 1782 1815 184) 188 1912 1945 1977 2010 2042 2075 2107 2140 2372 2237 2400 co NET TOYAL ARmA sa.z.. An.z mm. an;n tuni- X.-.3.2 S aa.... a.as ..... .~n gasi.ss sAsaa 33 . Xa33 .352 3 a -a lm. saassist. . .32i as 25 .....fl uiSit ZiiS-I s1 i-0 tx 0 3> 0' I-4 - THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTIAL RUBBER AREA. BY AGE GROUPINGS - HIGH CASE II (NEW PLANITING GRANT).* 1960 - 2005 THOUdSAND HECIAMES YEARl 1960 1970 1975 1980 1981 198? 1983 1984 1965 1986 1987 1M8 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 2000 2005, IMMATURE 429 496 435 46~ 641 430 467 513 556 58? 613 641 661 673 680 680 660 680 680 680 680 680 680 680 MATURE 342 4952268 6 701 722 742 763 796 824 849 882 915 947 998 1043 1089 1131 1171 1214 1264 1358 1508 SENILE 334 522 599 579 557 ~528 495 463 430 398 371 357 336 324 318 299 286 273 263 257 245 22& 199 132 NET T0OTA. A.REA 1030 1411 1553 1624 1637 1658 1685 1717 1750 1)82 1815 1847 1880 1912 1945 1977 2010 2042 2075 2107 2140 2172. 2237 2400 1 .3323SS33 333.: ::3 33333 3*=:. 333333:33:::St:3t3 lfl=s 33::3 *:33: 3:333333333:333333 33:33 333:3:33:3 33333 .....=:::....:3 .....::.ns 1U':P THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER PRODUCTION - HIGH31 CASE II (NEW plANTING GRAN), 1982-2005 IHMUANhI IONS YEAR 1982 1983 1904 1985 1986 1987 1988 1V98 19V90 1991 1992 1993 199 19M 1996 1997 1998 1999 2000 2001 2002 21003 2001 2005 REFl,1011ING BY ODRAF 123 148 175 202 233 2169 312 350 406 453 505 557 610 662 711 755 798 837 872 902 929 957 984 1008 REFLAN1ED 0WN RES 20 30 31 32 32 32 32 31 31 30 30 30 31 31 32 32 33 34 35 36 317 38 39 39 NEW PLANTING ONRAP - - - - - - - - 4 16 36 64 98 135 176 220 264 300 3¶0 309 42)5 459 489 51? NAW t'LANIS OW1N RESE 255 267 2-76 284 289 2187 2894 280 272 261 240 232 216 198 180 161 145 130 117 106 96 90 84 79 OLD SEEDiLINGS 2152 248 245 240 234 229 223 218 212 2108 203 2100 197 195 194 192 191 191 191 191. 191 191 191 191 0 ADJ9TOT P00 fELLIOO -16 -84 -9.3 -101 -109 -117 -125 -134 -142 -150 -158 -166 -175 -183 -191 -199 -207 -216 -224 -232 -240 -248 -2147 -265 TOTAL 583 612 638 663 690 714 744 776 810 847 897 952 1016 1081 1145 1207 1272 1335 1393 1445 1492 1540 1585l 16,26 ( 0 i-. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES NEW PLANTlINGS AND REPLANTINGS, BY TYPE Ot RUBBER AND SOURCE OF FINANCING - HIGH1 CASE Ill (NEW PLANTING GRANT AND REDUCED EXPORT TAX), 19 60-2005 THOUSANID OECTAfES YEAR 960-1961 1912 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1971 1978 1979 1980 1981 1982 19E83984-2005 YOfAF. ELA11G 3.9 12.2 3.6 5.9 4.9 3.9 6,1 11.0 12.3 12.9 19.1 24.8 26.1 21.5 23. 6 25.8 36.3 44.6 41.6 50.0 50.0 50.0 50.0 LEFLAYiTING DUNl RESC 1.6 1.6 2.1 2.1 2.1 2.5 2.5 3.0 3.0 3.0 2.5 2.5 2.3 2'l1 1.9 1.6 1.6 1.6 1.6 1.5 1.5 1.0 2.1 2. 5 tlEU PLANTING6 ORAF - - - - - - - - - - - - - - - - - - - - - 21.3 26.2 32.5 liEU PLAtITIN OWN8 RESC 14.4 14.4 18.7 18.) 13.7 22.5 22.5 27.0 27.0 27.0 22.5 2 2.5 70,9 18.7 17,3 14.4 14.4 14.4 14.4 13.5 13.5 5.0 5.0 5,0 SEEDLINGS 20.0 20C.0 20.0 120. 0 16,0 16.0 16.0 16.0 16.0 10.0 10.0 10.8 10.0 10.0 - - - - - - - - - I OD TOTAL FtANITNGS GROSS 36,0 39.9 53.0 44.4 42.1 45.9 44.9 52.1 57.0 52.4 47.9 54.1 58.0 56.9 40.7 39.6 41.8 52.3 60.6 56.6 65.0 18.1 83,3 90.0 . AR'EA FELLED -1.6 -5.5 -14.3 -5.7 -8.0 -7.4 -6.4 -9.1 -14.0 -15.3 -15.4 -21.6 -27.1 -28.2 -23.4 -25.2 -27.4 -37.9 -46.2 -43.1 -51.5 -51.8 -52.1 -52.5 NET NEWl AREA 34.4 34.4 38.7 38.7 34.7 38.5 38.5 43.0 43.0 37.0 32.5 32.5 30.9 28.7 17.3 14.4 14,4 14.4 14.4 13.5 13.5 26.2 31.1 37.5 H (01 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES TOTAL RUBBER PRODUCTION - HIGH CASE III (NEW PLANTING GRANT AND REDUCED EXPORT TAX), 1960 - 2005 IHOUSAh3 TONS YEAR 1982 1983 19£i 1985 1986 1987 198 1989 1990 1991 199 1993 1994 ISr, 1996 197S 1998 1999 2000 2001 2002 2000 2004 2QJ REFPLAttTING BY dRRAF 123 148 115 202 233 269 317 358 406 454 506 558 611 664 714 758 801 842 878 909 93S 967 "S5 122 REPLANTED OUN RES 28 30 31 32 32 32 32 31 31 31 31 31 32 32 33 34 35 36 37 3e 39 40 41 42 NEU PLAtillIC ORRAF - - - - - - - - 4 16 36 64 93 135 176 220 264 208 350 389 425 459 489 517 NEW PLANTS TUN RESC 255 267 276 284 289 288 286 283 277 270 261 251 241 230 218 207 198 189 182 177 172 169 168 166 OLD SEEDLINGS 318 317 314 311 307 302 298 294 290 286 283 281 279 277 276 276 276 276 276 276 276 276 276 2)6 ADJSTtT FGR FELLING -110 -121 -133 -145 -157 -169 -181 -192 -204 -216 -228 -240 -251 -263 -275 -287 -299 -310 -322 -324 -346 -358 -370 -321 TOIAL 616 643 667 690 715 738 766 797 830 870 922 961 1048 1117 1187 1254 1324 1391 1452 1507 1. 3 1607 1654 16Y I PI tx WIl X THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES PUBLIC REVENUE REVENUES FR20 RUDEER UITH TAXES REDUCED 4 DAHT PER KG KILLIOIIS OF DOLLARS (1981 CONSTANT TERNS) YEAR 1982 1983 1964 1985 1986 1987 1988 1989 1990 1991 192 1993 I94 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 CESS REVENUES 46.0 48.1 49.7 51.2 53.7 56.8 60.3 64.2 68.8 72.0 76.3 81.2 86.8 92.5 98.3 10h.8 109.6 115.2 120.2 124.8 129.0 133.1 136.9 140.5 EXPORT TAXES 59.0 62.5 65.7 69.1 75.9 84.0 93.1 103.0 113.6 119.0 126.1 134.2 143.1 152.9 162.4 171.5 181.1 190.3 198.6 206.2 213.1 219.9 226.J 732.1 TOTAL GOVT REVENUES 105.0 110.6 115.4 120.3 129.6 140.8 153.4 167.2 182.4 191.0 202.4 215.4 230.1 245.4 260.6 275.4 290.7 305.4 318.8 331.0 342.1 153.0 363.2 372.5 ======= =.,==== ======= ======= ======= .====== .... ... .=z.=. z. .... . =... . ... ....... ....... ....... ....................==:===,====1==X===s=S====sg==zs=:==== .== === ===................................ =. . H : at11J ANNEX 7 - 90 - Appendix 2 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Details of Taxation on Rubber A. Rates of Tax 1. Rubber exports (over 90% of production) are subject to an export tax and a cess. Both are collected by the Customs Department at the time of shipment. The export tax (ET) which passes into general government revenue is levied at 40% of the excess of the Gazetted Price (GP) over B 5.80 per kg, i.e., ET = 0.4 (GP - 5.80)./1 2. The cess is collected for the benefit of rubber producers, 90% for replanting grants, 5% for research, and 5% toward the administrative costs of ORRAF. The rate of cess collection is B 0.5 per kilo plus 10% of the excess of the Gazetted Price over B 10 per kg, i.e. Cess = 0.5 + 0.1 (GP - 10). B. Calculation of Thailand's Gazetted Price of Rubber 3. The gazetted price of rubber is established twice monthly by the Customs Department in the Ministry of Finance. It provides the basis for calculations of export duties and rubber cess, and is calculated as an average of three component parts the Bangkok wholesale price, the prices in other parts of Thailand paid by exporters, and Thai f.o.b. prices, net of duty and cess, calculated from world prices, as shown below. (i) Bangkok Wholesale Price. Prices are collected from four or five sources on a daily basis for rubber of RSS3 quality and these data are averaged. The sources include wholesalers, Bangkok exporters and local rubber manufacturers. (ii) Prices Paid by Exporters. These data are collected by the local customs offices and are the reported purchase prices of RSS3 quality rubber paid by exporters at the different exporting ports. (iii) Thai f.o.b. Prices Adjusted for Cess and Export Tax, Calculated from World Prices. World prices are taken from quotations by Reuters for /1 In July 1981 the formula was changed to: ET = 04 (GP - 10.80). Unless specifically mentioned (as new export tax) in this annex, reference is to the old rate. ANNEX 7 - 91 - Appendix 2 Page 2 London (spot), Singapore (spot), and New York (c & f). The derived Thai f.o.b. price is then calculated by deducting freight, insurance, in the case of London and Singapore, and Thai taxes and duties. 4. From the three average prices listed above, the Customs Department makes two averages./l The first average gives equal weight to the foreign derived component (iii) and the average locally derived component - average of (i) and (ii). The second average gives equal weight to the foreign derived component (iii), the locally calculated component on the basis of exporters' prices (ii) and the locally calculated component on the basis of Bangkok wholesale price (i). The Director of Customs then makes an administrative decision as to which of the two averages will be considerd the "gazetted price" for the next half month period (starting on the first or sixteenth of the month). C. Relationship between f.o.b. Price and Gazetted Price 5. Normally, the system of calculation used to estimate the f.o.b. price from foreign data underestimates the real f.o.b. Thailand price. First, the insurance percentages used are too high, and second, the deduction of full transportation cost to Singapore is not appropriate, as in many situations a third party buyer would consider rubber f.o.b. Singapore of equal value to rubber f.o.b. Thailand. Typically, the foreign component is underestimated by about B 0.50 to B 1.00 per kg with this methodology. 6. In the absence of exporters' margins, the relationship /2 between f.o.b. price and Gazetted Price would be as follows: f.o.b. = GP + ET + Cess f.o.b. = GP + [0.4 (GP - 5.80)] + [0.5 + 0.1 (GP-10)] simplifying f.o.b. = 1.5 GP - 2.32 + 0.5 - 1.0 f.o.b. = 1.5 GP - 2.82 or GP = 2/3 f.o.b. + 1.88 However, an analysis of the past five years' data (Table 1) shows that the Thai gazetted price has been substantially below what it would have been, on a theoretical basis assuming f.o.b. Singapore prices are equivalent to f.o.b. Thailand prices for RSS3. /1 The averages are based on equally weighted daily prices covering the 15 days up to the 12th and 26th of the month, respectively. /2 These relationships apply provided the Gazetted Price is above B 10 per kg, as is likely to be the case from 1980 onwards. The last year in which the Gazetted price for sheet averaged below this was 1975.) /3 With the export tax reduction in 1981, the new formula is GP = 2/3 t.o.b. + 3.Z1. - 92- ANNEX 7 Appendix 2 Page 3 Table 1: RELATIONSHIP BETWEEN OFFICIAL GAZETTED PRICE AND "THEORETICAL GAZETTED PRICE" Official Estimated /a Theoretical /b Gazetted Difference f.o.b. price gazetted price price between B and C A B C Amount Percentage --------------- (B/kg) -…_____________________ 1976 14.97 11.86 11.51 0.315 3.0 1977 15.86 12.45 12.08 0.37 3.0 1978 19.23 14.70 13.88 0.82 5.6 1979 24.93 18.50 17.74 0.765 4.1 1980 (Jan-Aug) 27.65 20.31 19.32 0.99 4.9 /a Assuming f.o.b. Thailand = f.o.b. Singapore. lb Based on GP = 0.6667 f.o.b. + 1.88. 7. Part of this difference is likely to be due to the uncler-recording or underestimates outlined above and part due to the fact that some costs would be incurred, and margin earned between exporters buying prices, or the wholesale price and a price representing the export value net of taxes and cess. 8. For estimates of cess income and export tax level in the future, it is assumed that the gazetted price will be B 1.0 per kg (i.e., 4.1%-4.6%) below the "theoretical level." Of this difference, B 0.50 to B 0.75 is due to underestimation and the remaining B 0.25 to B 0.50 would be accounted for by exporters' costs and margins which amount to B 0.50 to B 1.00 per kg exported. 9. The relationship of Gazetted Price, Export Tax and Cess to the fob price on this basis is as follows: Table 2: PRICES AND TAX LEVELS Fob Price Gazetted price Export Tax Cess B/kg B/kg B/ kg % ave. fob/a B/kg % ave. fob/b 20 14.2 3.3 17 0.9 4.6 25 17.5 4.7 19 1.3 5.0 30 20.9 6.0 20 1.6 5.3 35 24.2 -7.4 21 1.9 5.5 40 27.5 8.7 22 2.3 5.6 /a Marginal rate as % fob = 26.7%. /b Marginal rate as % fob = 6.7%. - 93 - ANNEX 7 Appendix 2 Page 4 Table 3: THAILAND - RUBBER PRICES AND EXPORT TAXES 1970-80 (Baht/kg) Export tax Gazetted price Export price Tax as 1981 1981 1981 % fob Year Current B Constant B Current B Constant B Current Constant B price 1970 0.05 0.19 7.02 26.5 8.04 30.3 0.6 1971 0.06 0.21 5.39 18.8 6.27 21.8 1.0 1972 0.05 0.16 4.97 15.7 6.53 20.6 0.8 1973 1.64 4.29 9.89 25.9 13.12 34.6 12.4 1974 2.05 4.31 10.92 22.9 13.49 28.3 15.2 1975 1.10 2.01 8.55 15.6 10.88 19.9 10.1 1976 2.29 4.10 11.51 20.6 14.97 26.8 15.3 1977 2.51 4.17 12.08 20.1 15.86 26.3 15.9 1978 3.22 4.52 13.88 19.5 19.23 27.0 16.7 1979 4.78 5.86 17.74 21.7 24.93 30.6 19.2 1980 (Aug only) 5.22 5.69 18.82 20.5 27.10 29.5 19.3 Note: All data is for rubber of RSS3. Gazetted prices and export tax are official figures for Thailand. Export price is fob Singapore. Source: Rubber Research Center. ANNEX 7 - 94 - Appendix 3 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Farm Profile of a Typical Farmer in the South/i Basis for Defining the Typical Farm Profile 1. Information on typical rubber farms is based on a farm survey undertaken during 1980 by ORRAF teams and analyzed by the Department of Agricultural Economics. The survey used a stratified sample of 760 rubber producers living in those amphoes in the South where rubber is a major crop. The median farm size in this sample is about 25 rai and information collected by the ORRAF survey for farms of 19 to 30 rai has been used as the basis for a typical farm profile for rubber producers in the South. This size group is larger than the median size shown in the 1978 census. However, serious doubts must be cast on the reliability of this census in rubber areas. The census indicates a total rubber area of 4.2 million rai compared with over 8 million rais for the same changwats recorded by satellite imagery (the total area estimated by satellite imagery is thought to be accurate within about 5% for mature rubber although it probably underestimates the area of immature rubber). Probably the census was able to include most of the farmers in its net, but it is likely to have underrecorded area per farm, in that much of the rubber is planted on ex-forest land, to which title is dubious. 2. Family Size, Age and Education. The typical family size for southern rubber farms is six, with four people falling in the economically active age group of 14 to 60 years. Most members of the family would have been or will be undergoing education to the level of primary school graduate but less than one person per family is likely to have education beyond this level. 3. Income from Employment. In the booming southern economy there are considerable employment opportunities available to family members away from their own farm. Main sources are employment on other farms particularly for rubber tapping or land clearing for new development, or else off-farm employ- ment - probably in construction or as a laborer in other industries. Some- times farm family members may also have the opportunity to work for a salary for the government or other employers requiring staff in rural areas. How- ever, on average income from salary sources is low (less than 20%) compared with income from wages. In all, income from employment and other nonfarm sources is about half of total income and in this typical case it amounts to B 16,000 per year. 4. Agricultural Production and Income. In the typical farm profile outlined here, the 25 rai (4 ha of land) are likely to be located on the edge of a hilly region but with some land suitable for rice. Soils are of moderate /1 This profile is based on analyses done prior to the July 1981 reduction of the export tax and the recent devaluation. - 95 - ANNEX 7 Appendix 3 Page 2 to low fertility and rainfall is about 2,000-2,500 mm p.a. About 5 rai (0.8 of a ha) would be planted annually to rice, 1 rai to vegetables and other annual crops (corn, peppers, melons, mungbeans, etc.) and about 3 rai would be under fruits and other perennial crops. Sixteen rai of land are currently or have been under rubber: 3 rai in the immature stage; 6 rai mature and yielding well; 4 rai senile - but with present prices just worth tapping; and 3 rai abandoned because the yield potential (about 30 kg/rai) is so low that they are no longer worth tapping - this area is now reverting to forest. 5. Present cash income from farming totals about B 19,000 gross, B 11,000 net. In addition, the value of agricultural products consumed at home amounts to about B 7,000, 70% of which is rice. Rubber is usually the biggest source of cash. If rubber prices were to fall or the value of labor to increase significantly, rubber income would be substantially lower, as with a yield of only 50 kg/rai (312.5 kg/ha) the earnings from the senile rubber can only just return a normal wage for the trouble of tapping it. In any case, as this rubber gets older its yield can be expected to fall and unless off-farm employment opportunities dry up, it can be expected that in a few years it would be abandoned unless it were replanted. As the produc- tion potential of old rubber nears the level at which tapping is marginal, it would normally be worth chemically stimulating the senile trees. The effect of this would be to raise yields for two to three years, to about 200 kg/rai above the "without stimulation" level. Beyond that however the yield level would be lower than without stimulation and thus after two to three years, the trees would either be replanted or else abandoned. 6. Policy Alternatives. The question of replanting the senile and the abandoned rubber is a thorny one. If ORRAF grants were available for replanting the whole area, then the farmer would forego his present cash income from senile rubber (estimated at B 3,600 per year) but would receive ORRAF grants covering both the materials for replanting and about half of the cost (or market value) of the labor required to do the replanting./l Assuming that the farmer is to provide half of the labor required for replanting from family members but to hire the other half, the net effect of replanting the 7 rai of land under an ORRAF grant would be to reduce cash income by about 10% from its present level for the next few years. However future rubber income from the replant (available from eight to nine years after initial replanting) would average B 25,000 per year for the 20 years that the replant is in tapping. However, the effort required to tap the 7 rai of new rubber in the /1 The official ORRAF grant is for all fertilizer, planting material and, stump killers and 70% of the "standard" labor requirement. However, ORRAF does not cover the cost of chemical weed killers. The distribu- tion of these materials is charged against labor payments due to farmers, so farmers receive, on average, about 50% of the value of labor used for replanting plus all of the materials. - 96 - ANNEX 7 Appendix 3 Page 3 future would be expected either to reduce off-farm income earnings or else to increase the cost of hired labor by about B 8,000/year at present rates. Furthermore other miscellaneous costs (tapping equipment, weed killer, coagulant, etc.) associated with the replant would average B 2,500 per year. Taking this into account, incremental income (9-28 years after retplanting) would average B 15,000/year above wh,at it would be if the farmer did not replant./l The present likelihood is that the farmer would only get an ORRAF grant for the 4 rai of senile rubber (still in tapping but in need of replant- ing). This depends on whether ORRAF is, or is likely in the near future to be, operating in the neighborhood./2 Even when he receives the ORRAF grant, it is virtually impossible for him to receive a grant for the 3 rai of his abandoned rubber. ORRAF-s strict rules on the minimum density of rubber trees on forest areas would likely preclude the classification of this area as cld rubber and therefore deny the possibility of a replanting grant/3. The alternative for the farmer would be to plant the three rai using his own resources. This would be expensive. If he decided to do so it is likely he would use a much lower level of inputs than for rubber replanted under an ORRAF grant thereby lowering the potential yield in the future. Because of the long gestation period of rubber and the high level of taxation, the financial rates of return for new planting rubber are relatively low (12%-14%). Thus unless the farmer has substantial savings of his own or has access to a long-term loan with a low real interest rate (which is improbable), it is unlikely that he would consider it worth while planting this area to rubber. 7. Tapping Systems. The typical smallholder in the South would be tapping rubber on a daily basis and use no fertilizer once the rubber comes into tapping (unless they receive ORRAF grants, farmers would often also use little fertilizer during the immature period too). As wage rates increase from the present average level of about B 50/day, labor productivity in rubber production will need to improve or else rubber will stop being tapped at increasingly higher yield levels (assuming a price of B 20/kg and labor cost of B 50 md, the cut off yield is about 310 kg/ha while with a labor cost of B 60, this rises to 420 kg/ha). With the new high yielding clonal varieties and /1 By the time the replant comes into production it can be assumed that the rubber which it replaced would have been abandoned had no rep:Lanting taken place. Thus incremental income from the replant is the same as total net income from it. /2 ORRAF has a good coverage of Southern Thailand, but there are a number of areas where farmers, for reasons of security or inaccessibility, would not be able to make contact with ORRAF. /3 Should the number of live rubber trees on that land average below 25 trees/rai (which is often the case with abandoned areas), the area wou-Ld not be classified as old rubber and accordingly no grant would be available. ANNEX 7 97 Appendix 3 Page 4 appropriate extension, particularly at the time of opening the cut, it is to be expected that increasing numbers of producers, particularly those with more than 10 rai of rubber, will switch to alternate daily tapping (D2) from daily tapping (DI) due to labor shortages and cost of hired tappers. Under an alternate daily tapping system a single tapper (albeit working harder) can cover more or less double the area than he could with daily tapping. Rubber trees which are tapped daily (Dl) yield more in the early stages of their maturity than those tapped on alternate days (D2). However over the life of the plantation, both the total production, and the average yield are normally higher for trees tapped alternate daily. This is particularly true, ex post, as the D2 tapping system is commonly used by farmers who also fertilize their trees, while farmers following a Dl system typically do not use fertilizer. Overall, the effect of farmers switching from daily to alternate daily tapping, would cause short-run output per rai to fall, but output per worker to increase substantially. In the long run, however, output per rai would increase. 8. The farmer in this example would be unlikely to switch to D2 tapping right away. However, as a result of close contact with ORRAF advisers, he would probably start D2 tapping on his whole area when his ORRAF replant matures. Measures to Improve Production and Productivity 9. If Thailand is to maximize output and productivity from smallholder rubber, farmers should be encouraged (a) to use high yielding varieties; (b) to plan replanting 2-3 years ahead of time and to stimulate and slaughter tap their old rubber, thereby raising yields for the last 2-3 years prior to felling and; (c) to plant more rubber, particularly to expand their area under rubber such that it provides at least one task for a tapper operating on an alternate daily basis (about 12 rai). 10. Virtually all new rubber in Thailand comprises high yielding clones. Provided the present program continues, the policy of encouraging farmers to plant material with high yielding potential can be considered to be working. 11. ORRAF is about to introduce a system of preregistering farmers for replanting grants. This should allow logical exploitation of the area, with stimulation and slaughter tappping 2-3 years ahead of a confirmed replanting program, thus plans are in hand for promoting slaughter tapping already. 12. The encouragement for area expansion and new planting by small- holders so that minimum areas corrresponding to at least one tapping task (i.e., about 12 rai of mature rubber) could be assisted by the liberalization of ORRAF surveying standards. This would allow areas with low densities of abandoned rubber trees, whiah are presently not classified as old rubber, to be made eligible for replanting grants. Incentives either in the form of - 98 - ANNEX 7 Appendix 3 Page 5 subsidized interest rates or special grants would also be an important encouragement to farmers undertaking new planting. These incentives need to be pitched at such a level that financial hardship during the nonproductive years could reasonably be borne by the small farmers (having a per capita income close to the World Bank target group level of $310 per capita and below) who make up the majority of Thailands rubber producers. Potential Improvements at the Farm Level 13. Table 2 exemplifies the impact on family income of replanting rubber and the enactment of measures proposed above. It considers farmers similar to the model set out in Table 1 (Farmer A), but at different development stages related to the measures implemented, and assuming the impact of replanting rubber at today's prices and wage rates. Farmer B is two years further developed than Farmer A, having increased his income slightly through slaughter tapping. Farmer C, who iS four years on, now has his ORRAF replant started. This releases some labor, but due to the reduction in tapped area income is also reduced. 14. Farmers D and E are 15 years further forward. Farmer D was able to get an ORRAF grant to replant the wliole 7 rai, but Farmer E only received a grant for replanting 4 rai and left the other 3 as abandoned rubber. After 15 years the rubber area equivalent to the 6 rai mature rubber which was tapped in cases B and C, would now have been replanted. Hence 15 years on, income is not all that much higher than for the typical farmer. However, had replanting not taken place, the situation would be very much worse (income from rubber would only be about B 4,500/year and aggregate income! would be about $220 per capita). By years 20-25 (Farmer F) virtually all of the rubber would be replanted clonal material. In this case, income would be about 50% higher than the present level. Because of likely increases in real rubber prices, and earning potential off farm, projections of farm income in the future would be higher in real terms than at 1981 constant costs and prices. ORRAF's Impact at the Farm Level 15. In the case of the typical farmer outlined here, the initial step to replanting would be to preregister for replanting the senile rubber with ORRAF. This would require filing irformation on his name, holding title, etc. ORRAF would then send an inspector/surveyor to examine the trees, measure, and draw up a sketch map of the area to be replanted. T'he farmer would be given a likely replanting d'ate, and advised on how to stimulate and slaughter tap the area to be felled. During the two years of stimulation, the yield of senile rubber would increase by about 30 kg/rai worth some B 2,000 per year or 7% of income for this period. About two years after starting stimulation the farmer would be asked to start felling and preparing land for new planting. His work would be inspected in stages and once approved he - 99 - ANNEX 7 Appendix 3 Page 6 would receive his first installment of the ORRAF grant. As soon as the land is prepared, ORRAF would arrange for high yielding clonal planting material to be brought to the site from approved nurseries, it would be planted by the farmer following ORRAF guidelines. During the whole immaturity period (7-8 years), the replant would be tended by the farmer under the supervision of ORRAF inspectors. ORRAF would provide the necessary inputs (via ORRAF stockists who accept ORRAF approved chits for the purchase of fertilizer) and make cash grants available at the scheduled rate once work done is approved. Any underdistribution of the farmer's grant entitlement (due to not needing to fence or not planting a cover crop) would be made as a cash payment at the end of the period. - 100- ANNEX 7 Appendix 3 Table 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Profile of a Typical /a Farmer in the South - 1981 Household and Holding Family size: 6 Economically active: 4 Holding size; 25 rai (4 ha) Home Produc- Total consump- Area Yield tion Price value tion Sales Production and Farm Income (rai) (kg/rai) (kg) -------…---(Baht) ---------------- Land Use % Paddy 5 270 1,350 3.75 5,063 20 5,063 /c Vegetables and other annual crops /b 1 var. var. var. 1,500 6 500 1,000) Fruits and perennials B var. var. var. 3,000 12 500 2,500) 19 Rubber Immature 3 - - - - - - Mature 6 80 480 18 8,640 33 - 8,640) Senile - still tapping 4 50 200 1 3,600 14 - 3,600) 65 Abandoned/forest land 3 - - - - - - Hiome Produc- Total consump- No. tion Price value tion Sales (unit) …- --Baht) … Livestock Pigs 2 50 kg/pig 22/kg 2,200 9 - 2,200) Chickens 30 1.5 kg/chicken 25/kg 1,125 4 625 500) 16 Eggs 1 500/yr l/egg 500 2 250 250) Total Production and Farm Income 25,628 100 6,938 18,690 100 Baht Farm Expenses hired labor 2,800 Food for labor 300 Fertilizers (160 kg) 800 Seeds, etc. 300 Tranisport, machinery hire, fuel 1,000 Pest control 250 Livestock, tapping equipment and other costs 2,000 Rent atnd interest charges 400 Total Farm Expenses 7,850 Total Agricultural lncomue (including imputed value 17,778 of home consumption) Net Cash Income From Agriculture 10,840 Income From Other Sources Wages and salaries 14,000 Remittances from relatives and other income 2,000 Total Income From Other Sources 16,000 Total Family Net Cash Income 26,840 Total Family Income (including value of homne consumption) 33,778 Per Capita Income $280 /a Based on farmers in rubber growing villages only. /b Includes houselot area. /c In many areas in the South. farmers buy and sell rice because some farmers have no rice land, and some, surplus production. In this composite case, it is assumed the farnmer has just sufficient rice land to support his family. - 101- ANNEX 7 Appendix 3 THAILAND Table 2 AGRICULTURAL PROGRAM AND POLICY PRIORITIES Farm Incomes for Typical Family in Different Stages of Development Typical Similar Similar Similar Similar Similar Farm Farmer B Farmer C Farmer D/a Farmer E/b Farmer F/a A 2 years on 4 years on 15 years on 15 years on 22 years on Income - Farm -- …----------------1981 Constant Baht------------------------- Rubber 12,240 14,540 8,640 26,800 17,300 41,000 Other 6,450 6,450 6,450 6,450 6,450 6,450 Less Farm Expenses 7,850 8,150 7,500 10,000 9,000 11,500 Plus Other Income Labor 14,000 14,000 16,000 9,000 14,000 5,000 Other 2,000 2,000 2,000 2,000 2,000 2,000 Value of Home Consumption 6,940 6,940 6,940 6,940 6,940 6,940 Net income including Home Consumption 33,780 35,780 32,530 41,190 35,690 49,890 Per Capita Income $280 $300 $270 $340 $300 $420 Rubber Area ------…--------------…------------Rai…--------------------------------- Immature - Own Resources 3 3 3 - - - Immature - ORRAF - - 7/a or 4/b 6 6 3 Mature - Own resources 6 6 6 3/c 3/c - Mature -ORRAF - - - 7 4 13 Senile 4 - - - - - Senile - Slaughter Tapping _ 4 - - Abandoned 3 3 0/a or 3/b 0 3 - /a Assuming all 7 Rai senile and abandoned rubber replanted originally. /b Assuming only 4 Rai senile rubber replanted originally. /c From immature own resources. - 102 - ANNEX 7 Appendix 3 Table 3 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Price Projections for Rubber, 1982-90 /a 1982 1985 199io …---- (1981 constant B/kg) FOB price (RSS 3) 30.00 30.60 33.80 Export tax 1.59 1.63 1.84 Cess 6.04 6.20 7.04 Farmgate price RSS 3 20.6 20.97 23.11 Farmgate price per kg sold/b 18.9 19.08 21.03 /a At levels prior to export tax reduction and devaluation of baht in 1981. The table shows prices for the more accessible parts of Thailand, at present real tax and cess rates. In the "Security areas," prices at the farm level are likely to be much lower since farm-to- market transport costs would be higher than those implied above, and, additionally, unofficial taxes imposed by insurgents on traders would also be reflec- ted in lower farm level prices. /b Based on 91% dry matter. Source: Mission estimates and projections of World Bank Commodities Division. - 103 - ANNEX 7 Appendix 4 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Financial Returns for New Plantings - New Export Tax, Devaluation and Alternative Tax and Grant Scenarios 1. During the latter half of 1981, two developments took place which had important effects on the price received by farmers for rubber and the incentive to invest in new plantings: (a) the export tax was reduced;/1 and (b) the baht was devalued (from 20 to 23 to the US dollars). Prior to devaluation, the reduction of the export tax (from B 6/kg to B 4/kg) increased the 1982 farm price by about 10% (from B 18.9/kg to B 20.8/kg). With devaluation, the farm price increased a further 13% (to B 23.5/kg) but the export tax (in baht terms) increased from B 4/kg to B 5/kg./2 This export tax still constitutes an equivalent tax burden of about 22% at the farmgate level. 2. With the recent changes, the financial rates of return (FRR) for new planting are summarized below (details are in Tables 1-7 of this Appendix): Planting Grant None 50% 40% Base case - before evaluation 13.7 New export tax (B 5/kg) 15.0 19.5 Export tax @ B 3/kg 16.4 19.9 Export tax @ B 1/kg 17.6 The new export tax after devaluation improves the FRR to 15% from the 13.7% obtained prior to July 1981. This is still below the 20% FRR likely to induce farmers to invest in new rubber plantings from their own or commercially borrowed resources. Even if export taxes were to be reduced to B 1/kg, the FRR is still below 18%. The required financial incentive is likely to be obtained from either (a) a planting grant equivalent to 50% that given by ORRAF (for six years) or (b) a further reduction of the export tax to B 3/kg and a replanting grant at 40% the ORRAF rate. /1 Its formula is now: Tax = 0.4 x (gazetted price - 10.8) instead of Tax = 0.4 x (gazetted price - 5.8). See Appendix 2 for details. /2 The cess increased from B 1.59 to B 1.89. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTARE NEW PLANTER NO GRANT NEU EXPORT TAX AND NO DEVALU4ATIOW CONSTANT 191 BANHT 1 2 3 4 5 o 7 86 7 10 11 12 13 14 15 16 17 18 RUBBER SALES 0 0 0 0 0 0 0 6375 1524 20790 24659 27662 29914 31878 33206 32513 30145 27605 TOTAL COSTS 16970 4914 3976 4115 4061 3519 S67 16304 102S5 10675 10697 11637 11328 11629 11629 12055 11629 14351 NET FLOW BEFORE FC -16970 -4914 -3976 -4115 -4061 -3519 -687 -9S0 5529 10115 13762 16025 1B867 20249 21577 2045a 18517 13254 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 3S TOTALS RUBBER SALES 25064 22638 20386 16191 16170 14438 16863 18596 15246 6699 0 0 0 0 0 0 0 454882 > TOTAL COSTS 11370 11872 11370 11397 11661 11355 12368 12794 12368 0 0 0 0 0 0 0 0 277626 NET FLOW BEFORE FC 13694 10766 9016 6794 4309 3083 4495 5801 2878 6699 0 0 0 0 0 0 0 177256 === ===_== ==============_=_=======-===========:: =_=:========= ====== ======= 14- NET PRESENT VALUE AT 12.0Z 6025. INTERNWL RATE OF RETURN z 13.7% THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTARE 6 YEAR INaTEAD OF 8 YEAR ORRAF GRANT NEW EXPORT TAX AND RECENT DEVALUATIOH CONSTANT 1781 6iiHT 1 2 3 4 5 6 7 6 I 10 11 12 13 14 15 16 17 16 GRAF GRANT 13616 3889 3219 3454 3460 3122 335 335 0 0 0 0 0 0 0 0 0 0 RUBBER SALES 0 0 0 0 0 0 0 7354 161i97 23706 263S8 31812 34402 36660 38187 37390 34667 31745 TOTAL COSTS 1816O 3260 4256 4406 4347 3767 950 17453 11020 11428 11665 12456 12126 12449 12449 12905 12449 15363 NET FLOW BEFORE FC -4350 -1372 -1037 -952 -867 -645 -615 -9764 7177 12481 16693 19354 22276 24211 25739 24485 22219 16383 1 C) 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 3S TOTALS ORRAF GRANT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 31649 > RUDBER SALES 28623 26034 23444 20920 1SS95 16603 17392 21385 17533 7704 0 0 0 0 0 0 0 523114 l |Z z TOTAL COSTS 12171 12709 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 297199 MET FLOW BEFORE FC 16652 13324 11272 6720 5898 4448 6153 7668 4293 7704 0 0 0 0 0 0 0 257564 4 NET PRESENT VALUE AT 12.07 = 36230. INTERNAL RATE OF RETURN = 29.3% THAILAND AGRICULTIURAL PROGRAM AND POLICY PRIORITIES CASH4 FLOW ONE HECTARE NEW FLANTER NO GRANT NEW E'XPOT TA ANID RECENT DEVALUATION CONSTANT 1981 BAHT ---~~~~~~~~~~--- - - - - - - 1 2 3 4 5 6 , 8 3 10 11 12 13 14 15 16 17 is …-- - - -- - - - -- - - - - -- - - - -- - - - - - - -- - - - - -- - - - -- - - - - -- - - - -- - - - -- - - - - -- - - - -- - ----- - -- - - - - -- - - --… RVUBBER SALES 0 0 0 .0 0 0 0 7354 18197 23?06 28358 31812 34402 36660 38187- 37390 34667 31745 TOTAL. COSTS 18166 5260 4Z56 4406 4347 3767 950 17453 11020 11423 11665 12458 12126 12449 12449 12905 12449 153,63 NET FLOW BEFORE FC -18166 -5260 -4256 -4406 -4347 -3767 -950 -10099 7177 12481 16693 19354 22276 24211 25739 24435 22219 16383 -- -- - - - - -- -- - - - - - -- - - - - - - - - - - - - - - - - --- - - - - - - - - - - - --------- -------- --- ------- ----- …----- ---- - - …--- -- - 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS RUBER SALES 28823 26034 23444 20920 18595 16603 19392 21385 17533 7704 0 0 0 0 0 0 0 523114 TOTAL CCSTS 12171 1270? 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 297199 LOH'~ NET FLOW BEFORE FC 16652 13324 11272 872 5398 4448 6153 7688 4293 7704 0 0 0 0 0 0 0 225915 NET PRESENT VALUE AT 12.0% =12465. INTERNAL RATE OF RETURN= 15.OZ THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTAfE NEW PLANTER NO GRAN4T NEW EXPORT THX REBUCED BT FURTNER 2 BAHT PER KG AND RECENT DEVALUATION CONSTANT 1981 BAHT 1 2 3 4 5 6 7 6 9 10 11 12 13 14 15 16 17 18 RUBBER SALES 0 0 0 0 0 0 0 7941 19631 2i792 30592 34318 37112 3954o 41196 40336 37399 34246 TOTAL COSTS 18166 5260 4256 4406 4347 3767 950 17453 11020 11426 11665 12458 17126 12449 12449 12905 12449 15363 NET FLOW BEFORE FC -16166 -5260 -4256 -4406 -4347 -3767 -950 -9513 8610 14364 18927 21660 24986 27099 28747 27431 24950 18884 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS - - - ___ - ------ --- -- - - - - --- _ -__0 -----------------_ - _ O RUBBER SALES 31094 28085 25271 22568 20061 17911 20920 23070 18914 8311 0 0 0 0 0 0 0 564336 > D> I TOrAL COSTS 12171 12709 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 797199 NET FLOW BEFORE FC 16923 15375 13119 10368 7363 5756 7681 9373 5675 8311 0 0 0 0 0 0 0 267137 K NET PRESENT VALUE AT 12.0% = 19322. INTERNAL RATE OF RETURN = 16.41 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTARE NFW FLANTER NO GRANT NEW EXPORT TAX REDUCED BY FURTHER 4 BAHT FER KG AND RECENT DEVALUATION CONSTANI 1981 BAHIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 RUBBER SALES 0 0 0 0 0 0 0 8527 21064 27676 32827 36824 39823 42436 44205 43282 40130 36747 TOTAL COSTS 18166 5260 4256 4406 4347 3767 950 17453 11020 1142R 1166Z5 12438 12126 12449 12449 12905 12449 !5363 NET FLOW BEFORE FC -18166 -5260 -4256 -4406 -4347 -3767 -950 -8927 10044 16248 21161 24367 27696 29988 31756 30377 27681 21385 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS o) RUBBER SALES 33365 30136 27138 24216 21526 19219 22448 24755 20296 8918 0 0 0 0 0 0 0 605557 H I> TOTAL COSTS 12171 12709 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 297199 Hr fnt' NET FLOW BEFORE FC 21193 17427 14966 12016 8828 7064 9208 11058 7056 8918 0 0 0 0 0 0 0 308359 NET PRESENT YALUE AT 12.02 = 26180. INTERNAL RATE DF RETURN = 17.61 THAILAND AGRICULT'URAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTiARE NEU FLANTER 50% 6 YEAR GRANT NEW EXFORT TAX hND RECENT DEVALUATION CONSTANT 2961 BANT 1 2 3 4 5 6 7 6 9 10 It 12 13 14 1., 16 17, la MRAF GRANT 6908 1944 1610 1727 1740 1561 167 167 0 0 0 0 0 0 0 0 0 0 RUBBER SALES 0 0 0 0 0 0 0 7354 i8197 23508 28358 31812 34402 36660 38187 37/390 34667 31745 TOTAL COSTS 18166 5260 4256 4406 4347 3767 750 17453 11020 11428 1 1665 12456 12126 12449 1244? 12905 12449 15363 MET FLOW BEFORE FC -11258 -3316 --2647 -267? -2607 -2206 -782 -9931 7177 12481 16693 19354 22276 24211 25739 24485 22219 16333 19 20 21 22 243 244 25j 26 27, 28 29 310 31 32 33 34 3S TOTALS OPRAF GRANT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 15825 RUBBER SALES 28a23 26034 23444 20920 18595 16603 19392 21385 17533 774 0 0 0 0 0 0 0 523114 > TOTAL COSTS 12171 12709 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 297199 NET FLOW BEFORE FC 16652 13324 11272 8720 5898 4448 6153 7688 4293 7704 0 0 0 0 0 0 0 241740 …-======= MET PRESENT VALUE AT 12.OZ =24347. INTERNAL RATE OF RETURN 190.5Z THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES CASH FLOW ONE HECTARE NEW PLANTER 40% 6 ';EAR GRANT NEW EXPORT TAX REDUCED BYf FURTHER 2 BAHT PER KG ANID RECENT DEVALUATION CUNSTANT 1?81 M.~IT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 171 la ORIRAF GRANT 5528 1555 1288 1381 1392 1249 134 134 0 0 0 0 0 0 0 0 0 0 RUBBER SALES 0 0 0 0 0 0 0 7941 19631 25792 30592 34318 37112 39548 41 1?6 40336 373979 34246 TOTAL COSTS 18166 5260 4256 4406 4347 3767 950 17453 11020 11428 11665 12458 142126 12449 12449 12905 12449 15363 NET FLOW BEFORE FC -12640 -3705 -2968 -3024 -2955 -2518 -816 -9379 8610 14364 18927 21860 24986 27099 28747 27431 24950 186884 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 TOTALS ORRAF GRANT 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 12660 RUBBER S6ALES 31094 28085 425291 22'568 20061 17911 20920 23070 18914 8311 0 0 0 0 0 0 0 564336 TOTAL COSTS 12171 12709 12171 12200 12698 12155 13240 13696 13240 0 0 0 0 0 0 0 0 297199 ( NET FLOW BEFORE FC 18923 15375 13119 10368 7363 5756 7681 9373 5675 8311 0 0 0 0 0 0 0 279797 HET PRESENT VALUE AT 12.01 28M2. INTERNAL RATE OF RETURN = 19.9Z -1lll1- ANNEX 8 THAILAND PROGRAM AND POLICY PRIORITIES FOR AN AGRICULTURAL ECONOMY IN TRANSITION Livestock Development Table of Contents Page No. I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 113 II. LIVESTOCK PRODUCTION . . . . . . . . . . . . . . . . . . . . . 114 A. Past Performance . . . . . . . . . . . . . . . . . . . . . 114 B. Major Forces and Constraints in Livestock Development . . 115 Traditional Smallholder Production . . . . . . . . . . 115 Private Sector Commercial Production . . . . . . . . . 116 Present Status of Livestock Subsectors . . . . . . . . 117 III. PRODUCTION SUPPORT ........ ... .. ... ... .. . 123 A. The Public Sector .123 The Department of Livestock Development (DLD) . . . . 123 Evaluation of DLD's Programs . . . . . . . . . . . . . 124 External Assistance . . . . . . . . . . . . . . . . . 126 World Bank-Assisted Livestock Development Project . . 126 Other Government Agencies . . . . . . . . . . . . . . 127 Government Regulations ..129 B. The Feed Industry . . . . . . . . . . . . . . . . . . . . 129 IV. MARKETING, PROCESSING, CONSUMPTION AND EXPORTS . . . . . . . . 131 A. Major Features and Constraints in Livestock Marketing. . 131 B. Livestock Processing and Slaughter . . . . . . . . . . . . 133 C. Price Developments and Pricing Policies . . . . . . . . . 134 D. Trends in Domestic Consumption . . . . . . . . . . . . . . 136 E. Export Performance ............ ..... .. . 138 V. LIVESTOCK DEVELOPMENT STRATEGY AND PROSPECTS . . . . . . . . . 139 A. Government Strategy . . . . . . . . . . . . . . . . . . . 139 B. Growth Strategy and the Role of the Private Sector . . . . 140 Opportunities . . .................. . 140 - 112 - ANNEX 8 Page No. Pricing, Marketing and Regulatory Policy . . . . . . . 141 Disease Prophylaxis and Control . . . . . . . . . . . 141 C. Reaching the Smallholders. . . . . . . . . . . . . . . . . 142 Cattle and Buffalo .... . . . . . . . . . . . . . . 143 Dairy. . . . . . . . . . . . . . . . . . . . . . . . . 146 Pig and Poultry .... . . . . . . . . . . . . . . . 147 Implications for the Expansion of Government Support Services .... . . . . . . . . . . . . . . 148 D. Livestock Sector Performance and the Fifth Plan Targets . 149 E. Impact of Future Livestock Production on Regional Development . . . . . . . . . . . . . . . . . . . . . . 150 VI. PROGRAMS FOR EXTERNAL ASSISTANCE . . . . . . . . . . . . . . . 150 A. Cattle, Buffalo and Forage Development . . . . . . . . . . 151 B. Dairy Development .... . . . . . . . . . . . . . . . . 152 C. Smallholder Cooperative Pig Production . . . . . . . . . . 152 D. Disease Control and Surveillance Support . . . . . . . . . 153 E. Manpower and Research Development . . . . . . . . . . . . 153 TABLES 1. Livestock in Thailand's Agricult,are 155 2. Average Wholesale Prices in Bangkok 156 3. DLD Budget for 1981 157 4. Artificial Insemination for Dairy Cattle 158 5. Present Production, Sales and Targets of Vaccine Production 159 6. Export of Selected Feed Ingredients 160 7. Cattle and Buffalo Exports 161 APPENDICES 1. Northeast: Farm Production Profile for Livestock 162 2. Work Program of Technical Divisions in the Livestock Development Department 169 3. Government Regulations Affecting the Livestock and Commercial Feed Industry 174 4. Bibliography 177 5. Government Regulations Affecting the Livestock and Commercial Feed Industry 182 - 113 - ANNEX 8 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES I. INTRODUCTION 1.01 Statistical information on the performance of Thailand's livestock industry can in some cases be unreliable since many farm animals and poultry are kept by smallholders. The implications arising from the data used in this report has therefore been corroborated with practitioners in the field. 1.02 The livestock sector accounts for about 14% of agricultural GDP, with bovines (cattle and buffalo) contributing up to 29% of total livestock GDP and the rest approximately equally shared by pigs, poultry and other products (mainly eggs and milk). The estimated total value of livestock production at current prices has increased from B 4.8 billion in 1970 to B 16.9 billion ($800 million) in 1979 (Table 1). Overall, the value of annual livestock production increased 3.6 times during this period, compared with an increase of 4.1 times in the crop sector. Crop cultivation expanded by about 30 million rai (5 million ha) to about 100 million rai (16 million ha) during this period, which represents about 45% of the area cropped in 1970. Rice, tapioca and corn accounted for about 75% of this expansion. 1.03 For the bovine subsector, which depends on grazing (especially in the Northeast), crop expansion has substantially reduced the traditional forage base. At the same time, increased mechanization (particularly in the Central Region) has substantially reduced demand for the draft animals traditionally bred and "fattened" in the Northeast where grazing resources predominate. Fortunately, the increasingly expanding demand for bovine meats for which draft animals are ultimately used has overwhelmed the adverse demand effects of mechanization so that bovine prices increased at an even faster rate in the 1970s than in the 1960s, after taking into account inflation. Bovine prices also grew substantially faster than those of other livestock partly because of the lower costs of large-scale commercialization and the recent oversupply of other livestock. 1.04 The emergence and virtual dominance within the past five years of large vertically integrated pig and (particularly) poultry operations constitute another important structural change in the livestock subsector. These firms now produce about 50% of all pork consumed in Thailand and virtually all the chicken meat and eggs consumed in the large urban areas. 1.05 As indicated in the following table, chickens, buffalo, pigs and cattle are kept by 66%, 46%, 31% and 22%, respectively, of the approximately four million farm households in Thailand; in the Northeast, buffalo are kept by 74% of all farm households. In the past decade, the livestock population has increased most for pigs and poultry while national bovine numbers have declined marginally. ANNEX 8 - 114 - Page 2 NUMBER OF HOLDINGS INVOLVED IN LIVESTOCK, 1978 ('000) Kingdom North Northeast Central South No. % No. x No. % No. % No. % Total holdings 4,018 100 1,004 100 1,660 100 789 100 565 100 Cattle 887 22 220 22 354 21 102 13 211 37 Buffalo 1,841 46 38:3 38 1,224 74 162 21 72 13 Pigs 1,263 31 418 42 428 26 206 26 210 37 Chicken 2,638 66 726 72 1,095 66 417 53 399 71 Ducks 615 15 124 12 297 18 123 16 71 13 Source: NSO, 1978 Census of Agriculture. 1.06 The value of exports of live cattle and buffaloes for slaughter has stagnated during recent years. On the other hand, there has been a rapid increase in the value of exported frozen poultry meat which has far exceeded the value of cattle and bulffalo exports since 1978. These trends appear to be continuing. Overall, export earnings from livestock are now about 10% of total agricultural exports. 1.07 Thai people have distinct consumption preferences. Fish is the major source of animal protein, followed by pork, poultry meat, eggs and beef, in that order. Milk is used mainly for dietary purposes, e.g., in child rearing, but fresh milk consumption is expanding although it remains a luxury item taken as a refreshment or as food in high-income families. II. LIVESTOCK PRODUCTION A. Past Performance 2.01 Pig and poultry production by smallholders is evenly dispersed throughout the Kingdom, while commercial production is centered around Bangkok. Cattle and buffalo are raised mainly in the Northeast, but are used for draught in the paddy areas of the Central Region before being moved to Bangkok for slaughter. Dairy development is concentrated in a few pockets around Bangkok and in the North. 2.02 Cattle and Buffalo Development. Between 1970 and 1980, the national buffalo herd stagnated at about 5.6 million head, while cattle numbers declined very marginally from 4.5 million to 4.3 million head. In the Northeastern Region both cattle and buffalo numbers have increased significantly and now account for more than 50% of all cattle and about three quarters of all buffaloes in the country. Cattle numbers decreased slightly in the Central and Northern Regions whereas buffalo numbers declined much more in both provinces. This phenomenon seems linked with progress in mechanized land preparation. Calving and extraction rates -115 - ANNEX 8 Page 3 remain low at 50-60% and 10-12%, respectively, and ongoing efforts at breed improvement have not yet resulted in increased carcass weights at slaughter. 2.03 Milk production in Thailand started about 30 years ago and currently involves about 2,000 farm families with approximately 24,000 dairy cattle. Muag Lek and Nong Pho are the major milk production zones. Domestic milk production has quadrupled in the 1970s to 16,000 tons (fresh milk equivalent) in 1980. This is equivalent to about 5% of total domestic consumption less than 45% of present fresh liquid milk consumption. 2.04 Developments in the pig sector have corresponded closely to domestic market opportunities. Pig numbers have increased by about 9% between 1970 and 1980 with cyclic movements occurring every four years, indicating that produc- tion expanded generally in line with growth in demand. Traditional low-cost, low-efficiency and low-quality pig production continues on many smallholdings throughout the Kingdom and still contributes about 50% of all pork consumed in Thailand. However, the demand for pork in larger cities is now largely met by commercial piggeries. About 30% (1.5 million head) of all pigs are kept in the Central Region, and a large proportion of these are of improved breeding and used for the efficient production of good quality pork for the Bangkok market. 2.05 Poultry development during the last decade brought about the complete domination of chicken meat and egg production by commercial firms. Production efficiency has become the major factor in continuing and expanding production enterprises, leading to strong competition for the existing market outlets. This has led to poultry products becoming cheaper relative to other sources of animal protein. The same also applies to duck meat and egg production although a large proportion of total production continues to come from flocks kept under the traditional transhumant, low-cost husbandry system of East Asian countries. Most smallholders also continue traditional poultry husbandry, but this is now almost entirely for subsistence requirements and nearby village market outlets. B. Major Forces and Constraints in Livestock Development Traditional Smallholder Production 2.06 Until about 20 years ago, livestock production in Thailand was highly dependent on smallholder agriculture. Integrated into the land-use system, it served the purpose of utilizing the existing resources of natural feed and family labor to produce subsistence food and a marketable surplus, to assist with the fertilization and preparation of arable lands and to accumulate assets for sale in times of cash requirement. The skill and industry of farmers and the exigencies of the agricultural environment led to the evolution of low-cost livestock production systems. While still - 116 - ANNEX 8 Page 4 an integral part of the typical farm system, smallholder livestock production (essentially buffalo ancl poultry) has declined in importance as the nation's meat producer./I 2.07 Traditional livestock production has not been able, in recent years, to respond to the rapid rise in demand for livestock products in fast growing urban centers. Some commercial smallholder operations f or pigs and poultry started in the vicinity of large cities, and if successf'ul, became reltively well off in the vi-cinity. Generally, however, smallholcders were not sufficiently informed as to the most suitable animal types, their husbandry requirements or the requi site feeding and housing arrangements, and they lacked capital to develop unit sizes which would be economical. Ensuring a regular supply of uniform quality products was also dLifficult since production took place on widely dispersed small units and the collection and transport of produce were carried out by middlemen who exploited the low bargaining power of smallscale traditional prcducers. There has, moreover, been a significant increase in off-farm employment opportunities for surplus family labor which has made the managing of low productivity animals much less attractive. Finally, there has been no comprehensive and reliable smallholder livestock development support by Gove rnme nt. Private Sector Commercial Production 2.08 In response to the large and continuously expanding demand for animal products in urban areas a strong commercial livestock industry has developed in the private sector ancl it now dominates virtually all commercial poultry production and the marketing of poultry and pig produc:ts. A few firms have emerged as the leading forces, most of which are joint ventures with overseas firms, assuring access to, and monopoly f'or, advarLced technology and inputs. Domestically, the firms offer a vertically integrated array of services, from prefabricat.ed housing material to high quality livestock, balanced feeds and poultry slaughterhouses. Some of the firms have established specialized subsidLiary enterprises, and some parent companies have more than one subsidiary for the same objective. There is strong competition between the firmis and even between subsidiaries within firms. Efficiency of production and size of operations are important for success, and a number of smaller operations or firms not offering integraLted services have been absorbed by the existing companies. Most firms have their own small production base, but the bulk of production is done by contract growers who receive a complete package of inputs and technical advice, and who market their production through the firms. Normally, contract growers provide labor and the land requiredL for buildings, while the firms /1 See Appendix 1 for a profile of' a typical livestock smallholder in the Northeast. - 117 - ANNEX 8 Page 5 organize and guarantee the credit for initial investment. Payment to contract growers is for units of livestock or livestock product delivered, with penalty deductions if norms in respect of mortality or feed efficiency as set by the firms are not met. The high quality inputs and services coupled with the severe competition between firms and the low prices for domestically available staple feed ingredients have led to very efficient operations. 2.09 The expansion of private sector poultry and pig production remains vigorous and is likely to exploit new market opportunities as they arise. This development will be dictated by economic forces and is likely to further increase the oligopolistic position of a few firms. Present Status of Livestock Subsectors 2.10 Cattle and Buffaloes for Draft and Beef. Practically all cattle and buffaloes in Thailand are owned by smallholders for the purposes of land preparation, crop cultivation and crop transport. Buffaloes are preferred in wet paddy operations, cattle for work in rainfed agriculture. Castrated males are used for work, and the culling of aged oxen or of those which become superfluous at the end of the planting season, is the major source of domestic beef supply. This routine, together with the dependence on draft animals, has also been sufficient until now to maintain the regular export of live buffaloes and cattle for slaughter. Cows are extraneous to the traditional system, and calf production for draft animal replacement is a problem. 2.11 Ruminant feeding has always been based entirely on natural vegetation and on-farm agricultural by-products; little arable land is used for forage production. This has led to a stratification in animal husbandry areas with a large proportion of land under cultivation, i.e., the Central Region and surrounding provinces, have a high ratio of castrated males needed for work; replacements have traditionally been procured from areas where a large proportion of nonarable land, mainly the Northeast, provided the fodder base needed for the surplus breeding (cow-calf) operations. The income from sales of draft animals, not of stock for slaughter, had until recently, been a major motive for cattle and buffalo keeping in these areas. 2.12 A number of major constraints, some of them interrelated, affect cattle and buffalo production: (a) The performance levels of breeding (cow-calf) operations have been low mainly due to deficient feeding. In the Northeast the pro- gressive expansion of dryland farming onto marginal land or into forest areas is reducing off-farm grazing resources. In addition, the forage from wastelands, communal grazing, stubble fields or straw is of low nutritive value during most of the year. Rice bran and oil cakes from local milling, which could compensate for - 118 - ANNEX 8 Page 6 some of these deficiencies, are generally reserved for pigs and poultry. Nutritional imbalances in ruminant feeding have the strongest economic impact through depressed fertility rates in mature females and the increased mortality of cattle and buffalo calves. The small number of female animals which reach productive age coupled with the lou fertility rate are insufficient to allow for a quick increase in base populations; (b) Increased reliance on mechanized land preparation reduces the need for draft animals, and as a result cattle and buffalo base populations in such areas are shrinking. Beef, which is traditionally produced as a by-product from draft animals, is increasingly falling short of domestic demand; (c) There is a tendency for the rural labor force to reduce or abandon some of the less rewarding agricultural activities like the shep- herding of large ruminants in favor of more remunerative off-farm employment; and (d) Genetic properties, such as slow growth rate (coupled with low milk yield of indigenous cattle and buffaloes) and late maturity have contributed to the problem. Although in the Northeast the extensive use of Brahman bulls and their crossbred offspring has been successful in upgrading local cattle, recent research indicates that without adequate feeding and disease protection, the crossbred cattle may not be more productive. 2.13 A number of important livestock diseases are still enrdemic. Rinderpest has been eradicated, but foot-and-mouth disease, haemorrhagic septicaemia, anthrax and blackleg require regular vigilance and protective vaccination. Among the above, haemorrhagic septicaemia causes the highest mortality rate, although the decline in performance due to foot--and-mouth disease is probably more important economically. Brucellosis is also present, and no practicable control or eradication measures have been developed for draught animals. Losses attributable to internal parasites, although nor currently quantifiable, are probabLy in excess of losses from infectious diseases. 2.14 Except in the North, there are no regular village marlcets where farmers can take their animals for weighing or for information on price trends (see para. 4.02). 2.15 Milk Production. The results of bilateral dairy development projects around Bangkok (Denmark) and in the North (F.R. Germany) have laid the technical and organizational foundation for dairy development in Thailand. About 50% of all 20,000 dairy cattle are mature females. All are crossbreds between Bos indicus cowS - partly dairy type Zebu cattle of Indian origin, partly indigenous Thai cattle - and temperate zone dairy bulls. Average herd size varies between 5 and 10 adult females and farm sizes between 3 and 5 ha (20 to 30 rai). Arable land is used for forage - 119 - ANNEX 8 Page 7 production from tropical grasses. The cut and carry system is the rule and seems to allow higher forage productivity. All farms use purchased concentrates at the rate of about 1 kg for every 2 kg of daily milk production. The average lactation yield is about 2,000 kg per cow. Fertility is a problem as indicated by the long inter-calving periods of 14 to 16 months. 2.16 One important constraint to the rapid expansion of milk production in Thailand is the scarcity of domestically produced animals which are suitable for intensive dairying. Government has made the distribution of semen from dairy bulls a major objective of its artificial insemination (Al) program, but despite some improvements, progress has been slow because: (a) many owners of indigenous cattle are reluctant to accept crossbreeding, being afraid that the crossbreds are not suitable for draught; (b) AI services are not very efficient (see para. 3.05); and (c) there is insufficient attention given to raising female crossbred calves up to first parturition. Details of the AI program for dairy cattle are given in Table 4. 2.17 The diseases mentioned in para. 2.13 are also found in dairy cattle, and their prevention is much more important considering the proportion of income from cattle operations in total farm income. Biannual vaccinations against the three endemic types of foot-and-mouth disease are given, and a vaccination program against brucellosis is also practiced. Because of the potential value of dairy heifer calves, parasite treatments with anthelmintics are regularly used for protection against intestinal parasites as well as liver fluke. 2.18 Pig Production. The provinces around Bangkok are the main pig raising areas. Up to about 10 years ago, most pigs were produced by small- holders who purchased two or three weaners and raised them on by-products to 100 kg liveweight at about 12 months of age. Unimproved indigenous animals were used which are quite fertile but have limited muscular growth potential. Carcasses were consequently very fat which was desirable as long as lard was the choice cooking fat of Thai consumers. 2.19 The pattern in the consumption of pork has undergone drastic changes during recent years. Lard is now valued at only about 50% of lean pork at the retail level, and a price differential has developed in favor of lean meat type pigs. This has led to widespread upgrading of native pigs with European and American breeding stock - Large White, Landrace and Duroc Jersey are preferred. There is now little evidence of the original native types except in remote areas, and the proportion of pork production from the traditional practice of keeping a few scavenging pigs is continuously decreasing. 2.20 The pioneering work of importing and multiplying superior breeding stock has been done by commercial firms which have established large pig breeding enterprises with 600-800 sows, subjecting the animals to intensive - 120 - ANNEX 8 Page 8 progeny and performance testing for fertility, daily gain, feed efficiency and backfat thickness. The selling of boars and gilts as breeding stock has been financially attractive despite high initial investment and continuing operating expenses. Some of the firms combine the sale of breeding stock with a package of other services, like housing material, balanced feed, tech- nical advice and credit. In order to increase their capacity for breeding stock multiplication, some firms have also developed "pig villages," in which smallholders are provided with a complete array of inputs and services, including credit for initial investments and working capital, and return to the firm, at a predetermined price, all the weaner gilts and a fraction of selected weaned male piglets. These anifials are then sold by the firms to commercial pig produtcers. The male piglets unfit for breeding are castrated and raised to market weight on other contract farms. The capital requirement per contracted smallholder is about $50,000 (B 1 mil- lion) for 40 sow units. Repayments to the commercial banks are made by the firms over a 10-year period. During this period, contract pig growers are guaranteed a monthly income of between $100 and $150 (B 2,000-3,000) per family. The technical assistance requirement of this type of production is high, with one extension/supervision agent for about 30 contract growers. All pig villages started so far are still in the initial stage. 2.21 Intensive pig production in independent commercial units has developed mainly within a radius of about 70 km from Bangkok. Most of these enterprises have integrated weaner production/fattening operations. The average number of sows is about 200 which would indicate an annual production of about 3,000 pigs for marketing, although some units are considerably larger. Total annual output is about 2-2.5 million pigs. The independent commercial pig producers rely on the vertically integrated firms for the supply of essential inputs. 2.22 Average performance in the above commercial pig production is remarkably high. Between 14 and 16 piglets are raised per sow per year, and are marketed after reaching 90 kg liveweight at about 6 months of age. Carcasses are lean with good muscle development in the back, ham and shoulder. Average feed conversion varies between 3.2 kg and 3.5 kg of feed per kg liveweight gain. 2.23 Intensive pig production development has also been attempted with public sector support under the joint responsibility of the Department of Livestock Services, the Department of Cooperative Promotion, Kasetsart University and the Bank for Agriculture and Agricultural Cooperatives (BAAC). The objective of this program was to provide income oppportunities for the smaller farmers as counterbalance to the vertically integrated firms and the independent large-scale commercial producers. In 1977, 74 pig producers cooperatives were established in the country's 72 provinces; 57 cooperatives are still in existence although only 15 may be classified as performing rea- sonably well. The development of the cooperatives has been hindered by the increasing price of feedstuffs, uncontrollable fluctuations in pig prices, lack of working capital and sales of slaughter pigs to outside dealers. - 121 - ANNEX 8 Page 9 2.24 Disease prevention measures are a major input to the development of efficient commercial pig production. Foot-and-mouth disease, swine fever and brucellosis are capable of producing serious economic loss from mortality, abortions and lowered productivity. Piglet diarrhea and respiratory diseases easily occur in conditions of low hygiene. Producers are therefore conscious of the need for high management standards and regular vaccination against Foot and Mouth disease and Swine Fever. 2.25 The greatest obstacles to the development of efficient pig produc- tion have arisen from government regulations regarding the slaughtering of pigs and the marketing of pork. (Government regulations are given in Appendix 5.) All farm mammals produced in the private sector and intended for consumption have to be slaughtered in municipal abattoirs which are poorly managed and charge high fees. Consequently, a large proportion of pigs are killed illegally to avoid fees and meat inspection charges. More than 50% of all pigs consumed in greater Bangkok go through unregistered slaughter. The present situation is a matter of concern to Government and a reason for anxiety among producers and consumers alike. 2.26 Poultry Production. Traditional poultry keeping with unimproved local birds scavenging around the homestead still continues on many small- holdings for home consumption and sale in village markets. Between 40 and 50 million chickens are kept in this way in flock sizes of about 20 birds. Performance is low but does not entail cash outlay. 2.27 Poultry and poultry products are supplied to urban markets almost entirely by intensive commercial operations. Development of the egg sector began in the 1960s when a few firms imported parent stock for the production of brooder eggs to supply high-yielding birds to commercial producers. Commercial egg production is now conducted by 250-300 independent producers with more than two million laying birds in flocks averaging around 10,000 layers. Average performance is high, with about 200 eggs per bird reaching the point of laying. Some producers use credit facilities offered by their supply firms for day-old chicks and feed, but nearly all have independent marketing arrangements for the eggs they produce. 2.28 Broiler production in the provinces around Bangkok has expanded rapidly, but information about the farms is still scanty. Available data indicate that in 1973/74, only 0.5% of all poultry farms had more than 10,000 birds birds, while in 1979, 92% of all chickens raised in the Bangkok area were on farms of this size; 30% of the large operators had between 30,000 and 50,000 birds, and 12% more than 50,000. - 122 - ANNEX 8 Page 10 2.29 All poultry operations are dominated by a few firms which, through central facilities or their subsidiaries, produce day-old chicks./l With a hatching capacity of 4.5 million chicks per month, one of the firms has about 80% of the market share. ALl of these firms offer integrated services (prefabricated housing, balanced Feeds, biologicals, technical advice, credit arrangements, slaughter facilities, etc.) 2.30 About one quarter of alL broilers are reared by independent pro- ducers who buy inputs from the large firms but have sufficient experience and financial strength to operate independently. All other broiler producers are bonded in one way or the other with the vertically integrated Firms. Their contracts are either based on price guarantees, on guaranteed wage income or on credit arrangements. 2.31 Broiler production in Thailand operates at a high efficiency level. The birds reach about 1.5 kg liveweight in 40 to 50 days with a feed conversion rate of about 2.5 kg of feed per every kg liveweight produced. 2.32 Newcastle disease occurs in sporadic epidemics among poultry in the traditional sector and can decimate village flocks. Commer-cial firms operate regular vaccination programs against Newcastle disease and other endemic poultry diseases in their own and their clients flocks. They use some biologicals from domestic production but stocks of imported vaccines are also held as they are believed to be of better quality. 2.33 Thailand-s poultry production has reached market saturation. Egg production met Bangkok's demand by about 1970 and led to low egg prices at that time (Table 2). Export of eggs to Hong Kong and Singapore reached an all-time high in 1969/70 but declined in later years due to emerging domestic production there and competition from the PeopleTs Republic of China. Commercial egg production today is basically for domestic require- ments with strong competition among egg producers. Broiler production reached market saturation fairly recently. Broiler exports by integrated firms started in 1973 and have been increasing rapidly ever since, although the level of future exports of chicken meat is uncertain and a period of consolidation is likely to develop. In order to bring production more in line with domestic demand and to sustain current internal price levels, the integrated firms have recently agreed to decrease their output of day-oLd chicks on a rotational basis. Obviously, this will lead to an underuti:Li- zation of installed production capacity, and it seems likely that the integrated firms will favor those production units for which they have a /1 They are: Charoen, Phokphan, Laemthong, Betaco, Centago andl Saha Farm. ANNEX 8 - 123 - Page 11 commitment for repaying investment loans. Overall, it appears likely that the position of integrated firms will become even stronger and that commercial broiler production will survive only in very large operations. 2.34 Traditional duck raising continues as a specialized commercial enterprise in low-lying or irrigated rice-producing areas. The ducks are shepherded in flocks of about 200 birds along canals, ditches and in rice fields. Although concentrates for ducks are now offered by some feed mills, low-cost production using broken rice as feed is still widely practiced. In 1978, Thailand was struck by a major outbreak of duck plague with a disas- trous effect on duck numbers. Domestically produced and imported vaccines are now available, and the duck population has now regained its previous level. III. PRODUCTION SUPPORT A. The Public Sector The Department of Livestock Development (DLD) /1 3.01 The Department of Livestock Development is the principal government agency responsible for livestock development in Thailand. Most profes- sionals in the Department are veterinarians graduated from Kasetsart and Chulalongkorn Universities, but the number of university graduates in animal husbandry has been increasing in recent years. Technician-level staff are trained at DLD's School of Veterinary Training in Bangkok. 3.02 DLD's Director General is assisted by a Secretariat and works through 11 divisions. Two of these have administrative responsibilities, while 9 are technical divisions. The divisions tend to work in isolation from one another, and their functions are often fragmented and duplicated. A firm linkage between support and field services is also missing and there is a tendency for DLD staff to prefer assignments at Bangkok headquarters. The work of the technical divisions is field oriented or of an industry-support or regulatory nature; a description of their work programs is given in Appendix 4. The Director General is considering a restructuring of the Department with a view to sharpening the focus of routine activities on the needs of the livestock industry, reducing fragmentation and improving coordination of services. 3.03 The Department's Secretariat has two major functions. First, annual and special budgets are assembled for presentation to other government authorities. This is done in consultation with the division directors. Second, proposals for external assistance are formulated, again in consul- tation with the divisions concerned. Once approved, such projects are /1 See Appendix 2 for details. - 124 - ANNEX 8 Page 12 transferred to the divisions. Although the projects which materialized have tended to address major development tasks and deficiencies, external assis- tance planning has been project orLented so far. DLD's budget for 1981 is given in Table 3. Evaluation of DLD's Programs 3.04 DLD's animal health activities concentrate on a few important diseases: foot-and-mouth disease in cattle, buffalo and pigs; haemorrhagic septicaemia in cattle and buffalo; swine fever in pigs; and Newcastle disease in poultry. Rinderpest has been eradicated but protective vaccinations are still required in the East against possible re--invasion. The control of the Foot and Mouth Disease has the greatest allocation of resource because of its effect on export markets and (to a lesser extent) on dairy development and draft animal performance. The major thrust has been the provision of veterinary services, and in FY81 they absorbed about one-third of the Department's budget. In recent years DLD has also been successful in attracting important investments for animal disease controL. While constituting the stronger of DLD's activities (compared with anima'l production) a number of priority problems needs to be tackled: (a) quality of vaccines produced are inadequate; (b) diagnostic service is both limit-ed and deficient; and (c) other key diseases of economic importance are not emphasized (e.g. tick borne diseases). 3.05 DLD is also involved in a number of livestock upgrading programs: (a) Artificial insemination services for cattle and buffaloes provided by the AI Division achieve relatively low conception rates, i.e., about 50% for first insemination. The most significant problems are inadequate training and supervision of field technicians, difficulties with communications and deficiencies in the distribution of proper semen. The costs of AI are high because too many stations and staff serve too small animal numbers,. Under the present system, the inseminator essentially waits to be contacted by the farmer. (b) A loan-bull program (under the Breeding Division) has been relatively more successful as evidenced by the large number of Brahman crossbred cattle in areas of its implementation. Conception rates are alsc higher than for A.I. (about 65% at first insemination). However, the number of cows mated by the loan-bulls is relatively low due to: the use of undergrown and poorly maintained bulls; the withholding of the bulls from free mixing with village herds; and insistance on the time consuming (but rather futile) blood-testing of cows for brucellosis before mating. More loan-bulls should be placed in remote areas which cannot be easily reached by AI. - 125 - ANNEX 8 Page 13 (c) Livestock "banks" are Government-sponsored stock upgrading distribution schemes to smallholders. The Department has-been involved in this activity in the past, distributing pigs and poultry free of charge to farmers. During the Fifth Plan Period (FY82-86), the Department has been requested to increase such activities in the context of Government's effort at poverty alleviation. Cattle and buffaloes (usually female) procured from the Department's livestock stations or from the market are being distributed to smallholders in poverty areas on concessional terms, i.e., recipient farmers would repay (usually at about 60% of market value) either in cash without interest charges, or in kind by returning to Government the second-born calf of the cow received. Past experience, according to DLD officials, have not been encouraging, many of the pigs and poultry previously distributed had "disappeared", without any impact on smallholders' longer-term productivity. The lack of success was particularly noticeable in "poor" villages which could not afford the requisite feed. It is unlikely that the transfer of cattle and buffaloes to smallholders without the capacity to maintain the animals properly could significantly affect smallholder productivity and income. 3.06 Livestock stations absorbed another 25-30% of the Department's 1981 budget, but the impact on smallholder production is far from satis- factory. The stations are working in isolation, their management is generally weak, and the quality and performance of livestock is low due to deficiencies in fodder production and utilization, and lack of working capital for the purchase of feedstuffs. In addition, the work of livestock stations is not directed at the particular production problems of the areas served. A substantial redirection is essential if the results of applied research, for which many stations are already basically equipped, are to benefit smallholder cattle and buffalo development. 3.07 Applied research with emphasis on integrated crop-livestock pro- duction systems is the responsibility of the livestock stations. Some more sophisticated facilities to conduct research of wider applicability is being developed at Tha Pra under the World Bank-assisted Northeast livestock project, which emphasizes the testing, establishment techniques, and seed production of tropical legumes for the Northeast. Although essential facilities for research into animal production and feeding problems are available at some universities, DLD has no facilities to conduct research on topics other than those related to vaccine development and testing, and the diagnosis of livestock diseases. Also, the Department's facilities for feed quality control are inadequate to protect livestock owners from illegal fluctuations in the quality of purchased feeds. - 126 - ANNEX 8 Page 14 3.08 RTG-s animal production extension (field) service is relatively undeveloped mainly because of lack of budgetary support and jurisdictional controversy over the roles of DLD and the Department of Agricultural Extension (DOAE). DLD staff, in arty case, are not posted in the field below the district level. External Assistance 3.09 DLD has received considerable external assistance. FAO, UNDP, Japan (OECF), Belgium and France have assisted with facilities, equipment, training or fellowships for vaccine production. Regional diagnostic laboratories in the Northeast (Khon Kaen) and South (Surat Thani) are undler development with German and Japanese assistance, and disease eradication campaigns are supported by the Federal Republic of Germany and Malaysia. Initial dairy development projects were supported by Denmark and Germany, and support for the import of bulls and crossbred heifer calves is now under discussion with the EEC. The Netherlands has assisted with the production of liquid nitrogen for frozen semen, and further aid is anticipated. The People's Republic of China is considering a fellowship program to promote AI in pigs; New Zealand has assisted in testing the suitability of tropical forage legumes near Khon Kaen, and the United States is preparing a project to intensify ruminant production as an integrated smallholder farming activity in the Northeast. World Bank-Assisted Livestock Development Project 3.10 DLD's first comprehensive large-scale development project began in the Northeast in 1976 with World Bank assistance. An evaluation of the impact of the project was recently undertaken by Kasetsart University./l The achievements under the major project components may be tentatively summarized as follows: (a) Pasture Development. Suitable legume and grass species are now available for the pasture improvement work; main emphasis has quite rightly been placed on the introduction of improved legumes, but attention is now also being given to the introduction of more productive grasses. The iestablishment of forage in houisehold backyards has been the most successful subcomponent wiith 55% of seed recipients successfully establishing viable backyard forage. Despite extensive oversowing of communal pastures and roadsides, the productivity of the seeds (both grass and legumes) have been poor, particularly in the former where overgrazing has been an intractable problem. Pasture management on DLD's stat.ions is /1 Report on the Evaluation of the Northeast Livestock Development Project, Kasetsart University Research and Development Institute, 1981. - 127 - ANNEX 8 Page 15 still generally rather poor, thus limiting the number of bulls that can be raised for the loan-bull scheme. Seed production, though improving, is still faced with a number of constraints, principally a shortage of qualified staff and lack of adequate seed storage facilities at Tha Phra. (b) Animal breeding and upgrading has been reasonably successful as is evidenced by the extent of coverage per DLD staff and the low percentage of native breeds in project areas compared with nonproject areas. Performance of crossbreeds (vis-a-vis) native has been more difficult to evaluate because of the high proportion of "non-answers" to interviews. Previously hampered by the problems which have generally constrained these programs (para. 3.05), improved organization of the breeding service (especially "AI train") has resulted in considerably extending the outreach of the field officers. The project now buys about 50 cross-bred calves per month at guaranteed prices from smallholders. These are then raised on a station of the Dairy Promotion Organization for resale to dairy farmers prior to first parturition. (c) Smallholder Participation. The project has extended its field services to 1,200 village groups, instead of 640 as envisaged at appraisal. Each of the 250 project extension officers covers about 5 village groups and takes responsibility for the implemen- tation of all project activities in the area of his assignment. Farmers- response is reported to be encouraging. Difficulties with the project have arisen from its management by a unit under the Director General but separated from the Department's established units. This lack of integration has led to duplication and lack of cooperation. One important objective of continued assistance would have to be the integration of external financial assistance into the Department's operating procedures. Other Government Agencies 3.11 A number of other Government agencies have activities in support of the livestock industry. The more important ones are as follows: (a) Thailand has two veterinary faculties providing livestock-related education and training over six years (Chulalongkorn and Kasetsart in Bangkok) and four agricultural faculties with education over four years (Kasetsart, Chiang Mai, Khon Kaen and Songkhla). The agricultural faculties specialize in general agriculture and animal science. - 128 - ANNEX 8 Page 16 (b) There are several possibilities for lower level training in agri- culture. In high school, students can choose to study agriculture for one of the three years, and after high school several possibilities exist, including a two-year course in animal husbandry and veterinary subjects at the Veterinary Training School in Bangkok. (c) The National Pig Research and Training Center is jointly finance,d by DLD and Kasetsart University which contribute B 8 miLlion and B 2 million, respectively, to its current budget. The Center's director is a professor at Kasetsart University and is responsible to a broadly based, high level committee with a Deputy Minister for Agriculture as the chairman. The Center plays a pivota:L role in the development of the pig industry through research, the training of pig production specialists and farmer training. The Center is also promoting pig cooperatives (para. 2.23). (d) The Dairy Promotion Organization (DPO) was established Ln 1971. It has a board chaired by the Minister of MOAC, consisting of repre-- sentatives of departments with a major role in the dairy industry. Its first activity was to tWake over the Thai Danish Dairy Farm and Training Center at Muag Lelc, which is still run by DPO. DPO has a key role in dairy production and marketing, and its aims are: to promote the raising of dairy cattle; to produce milk, meat and other dairy products; to train and educate people in dairy husbandry; to buy, sell or exchange dairy animals and products; to operate other activities connected with dairying and to undertake processing and marketing of milk products. DPO also operates its own AI services, and in 1979, about 12,000 inseminations were carried out: with daiLry type semen. (e) The National Security Command (NSC) assists in rural develop- ment in the border areas. At the Artificial Breeding Promotion Center (ABPC) at Pranom Sarakham, NSC has bulls and facilities for deep-freezing of semen. Its Mobile Development Units (MDU) work in remote areas and their services include artificial insemination and veterinary services for livestock owners in the areas. These services overlap with similar services provided by the DLD in some districts but there is presenty no overlap among the bene- ficiaries. For animal disease control the NSC is a client of DLD. - 129 - ANNEX 8 Page 17 (f) The Department of Cooperative Promotion (MOAC) is responsible for the formation of, and giving management advice to, livestock producers cooperatives. In association with DPO and DLD, it has performed well in the dairy sector. In the pig sector, development has been less successful mainly due to the marketing constraints outlined in para. 2.25. (g) The Bank for Agriculture and Agricultural Cooperatives (BAAC) has considerable experience with credit for livestock development. Of its medium-term portfolio, livestock loans amounted to B 415 mil- lion (28% of total) in 1978 and B 475 million (31% of total) in 1979. About three quarters of this was for the purchase of draft animals. In the case of long-term loans, B 75 million (18% of total) was for livestock in 1978 and B 104 million (15% of total) in 1979. The bulk of these loans was for facilities and breeding stock for pig and cattle production. Smaller loans were for poultry and dairy development. In dairy farming development, individual loans amounted to B 50,000 to B 60,000 in 1975-77, and increased to B 80,000 per holding in 1978/79. Covernment Regulations 3.12 Different ministries have issued laws and regulations which govern various aspects of livestock industry development. The major regulations currently in force are set out in Appendix 3. The greatest impact is exerted by regulations concerning the slaughter of livestock and the movement of live animals or carcasses. These were intended to ensure draft bovine availability and to protect consumers interests but have, in fact, become obstacles to the free expression of market forces. Some other government regulations concerning feed prices or promotional privileges under the investment promotion program seem to work in favor of large firms. Finally, a regulation by the Ministry of Public Health allows only government authorities to handle disease-causing agents. This has ruled out private sector participation in vaccine production. B. The Feed Industry 3.13 Thailand-s commercial feed industry is a modern, sophisticated, efficient and highly competitive private sector enterprise. Initial development in the late 1960s was in response to the rapid expansion of commercial chicken egg and pig production in the Bangkok area. As most of these on-farm developments were supported by the private sector, the feed industry has been an integral part of private sector firms with livestock interests. - 130 - ANNEX 8 Page 18 3.14 In 1980, there were 80 feed mills of which 35 were large and medium-sized modern installations with a production capacity of 2 mil- lion tons per year; the remaining 45 smaller plants produce abouit 500,00() to 600,000 tons per year. About 65% of all production capacity is located in the provinces around Bangkok, and about two thirds of the large and medium size plants have been granted promotional privileges (Appendix 5). 3.15 Competition in the feed sector is intense. During recent years, a number of smaller mills had to give up operations and the industry is now more concentrated. NESDB estimates that the 8 largest mills now account for about 85% of annual commercial feed output. Some of these mills are owned by the same parent firms. The advantages large mills have over smali mills are: (a) cheap bulk purchase of tested ingredients; (b) sophisticated storage of ingredients and computer technology in ration formulation; (c) lower production costs per ton of feed produced;/l (d) better sales promotion and transport; (e) the provision of integrated services; and (f) the promotional privileges for some of them. 3.16 The engineering design of mills is varied. Small plants have Thai- built copies of European or American machinery. The large factories use sophisticated imported engineering designs. The Charoen Phokphan Group, for example, has an engineering consultancy to design and construct new feed mills. 3.17 The total production of feeds has increased regularly and rapidly. From about 60,000 tons in 1965, it reached 110,000 tons in 1970, 490,000 tons in 1975 and about 1.2 million tons in 1979. In recent years only about 2-3% of total mixed feeds have been exported. In 1979, production was less than 60% of installed capacity. Most large mills worked three shifts for 7 days per week, whereas small mills could sell only the production of one or two shifts. A sample survey conducted by t]he School of Economics, Thammasat University, in 1980 indicated the following feed distribution: Chicken feed Duck feed Pig feed Small mills 31% 50% 19% Medium mills 58% 9% 33% Large mills 60% 4% 36% /1 In 1975, large mills had total production costs of B 3,680 per ton, medium mills B 4,020 and small mills B 4,470. - 131 - ANNEX 8 Page 19 3.18 The domestic availability of staple feed ingredients exceeds internal demand. Corn, broken rice, rice bran, mung beans and sorghum are the major sources of energy supply. The important ingredients for protein supply are fishmeal, cakes from groundnuts, copra, sesame, soyabean, cotton and kapok cakes as well as cassava leaves and by-products from slaughtered livestock and birds. Minerals are available from local production but trace elements, vitamins and feed additives are imported. Only soyabean cake has been imported by large mills since 1974. In that year, 3,000 tons were imported and the current levels fluctuate between 60,000 tons and 80,000 tons per year. Other major feed ingredients are exported regularly and in increasing quantities (Table 6). Cassava is little used domestically for feed mixing as, on a nutritional (feeding value) basis, corn is cheaper. IV. MARKETING, PROCESSING, CONSUMPTION AND EXPORTS A. Major Features and Constraints in Livestock Marketing 4.01 The marketing of livestock and poultry in Thailand is in private hands. Government intervention is aimed at the safety of livestock consump- tion, at maintaining "reasonable" consumer prices and at ensuring the continual supply of draft bovine stock. If, in future, more emphasis is to be placed on the value of cattle and buffaloes for meat production, some of these regulations need modification. 4.n2 Except in the North, Thailand has no marketing centers for cattle and buffaloes. Stock owners sell to itinerant village buyers, often farmers themselves involved in part-time trading. Prices are determined by visual observation on a per head basis, and payments are made after village buyers have resold the stock to local butchers or prdvincial shippers. The latter are merchants with a license for interprovince shipment, connected either to Bangkok wholesalers of slaughter stock or to merchants specializing in the trade of draft animals for the Central Plain. The latter fluctuates with the season, and Saraburi is the most important center where draft animals from the Northeast are assembled before distribution in the Central Region. The wholesalers at the terminal markets in Bangkok handle cattle and buffalo for slaughter from all over the country, holding some stock for a continuous supply of animals to the abattoirs. They are the main source of market information and are in a position to affect prices right down to farm level. Incidence of collusion to depress potential inflow of slaughter stock has occurred. Just before slaughter, animals are sold to carcass wholesalers who then have fresh meat delivered to retailers immediately after slaughter. 4.03 The marketing of pigs produced in the traditional sector is similar to that of cattle and buffaloes described above. Provincial dealers are the link between small-scale buyers and wholesalers in the consumption centers - 132 - ANNEX 8 Page 20 and, as in the case of bovines, the wholesalers constitute the principal center of power. Commercial production has developed around major consumption centers and most commercial producers tend to deliver their animals there themselves. Producers have essential market infcormation, but they experience difficulties in counteracting the tendency of wholesalers to establish artificial demand-supply conditions. 4.04 In poultry marketing, producers have more influence. Commercial egg producers have direct links with city wholesalers who distribute eggs to retailers. Also, commercial broiler producers ship their birds either t:o city wholesale markets from where they are distributed killed cr alive to retailers, or to public or private sector slaughterhouses. The private sector chicken slaughterhouses are operated by the large vertically integrated firms for the dual purpose of providing chicken meat for domestic and export markets. They not only accept birds from contract growers but also from independent producers. There are, therefore, three major centers of concentration in the marketing of chicken meat: the city wholesale markets, the public sector abattoirs and the private sector slaughterhouses. Whcolesale dealers work in the first two, but their influence is restricted by the dispersion of power over the three centers. 4.05 Information on marketing. margins is incomplete. In 1975, farmgate prices were 79% of retail prices for cattle and 73% for buffaloes./l In 1980, farmgate prices for pigs represented about 65% of consumer prices./2 Profit levels as calculated by Thammasat University are reasonable and indicate rather strong competition at all levels. 4.06 In summary, the major constraints in livestock marketing are of a structural nature. Traditional producers of poultry, pigs, cattle and buffa- loes have no access to market information and marketing facilities which would induce and support objective sales negotiations. A marketing study indicates that the live-animal trade is relatively competitive./3 The study also indi- cates high profits at the retail and wholesale levels stemming from the inef- fectiveness of meat price controls and the oligopsonistic power of meat/ carcass traders. The oligopsonistic power of meat traders was derived from a number of government regulations. Until August 1980, carcasses and meat could not be transported across provinces (except under restricted special licenses) for animal health and tax collection reasons (see Appendix 5). With this regulation revoked, the oligopsonistic power of meat traders has /l World Bank Report 2771-TH. /2 Faculty of Economics, Thammasat University, 1981. /3 Nibhond Puopongsakom, Marketing and Prices of Pork and the Role of Govern- ment, Draft Background Paper for the NESDB, Agricultural Pricing and Marketing Study. - 133 - ANNEX 8 Page 21 been somewhat reduced although the persistence of restrictions on private slaughtering and their continuing control of district slaughterhouses would still lend substantial credence to their market power. B. Livestock Processing and Slaughter 4.07 There are five major commercial companies involved in the manufacture and marketing of milk products from imported raw materials. Four of these companies, the Thai Dairy Industry Co. Ltd., United Milk Co. Ltd., Alaska Milk Industry Co. Ltd. and Pranakorn Milk Industry Co. Ltd. concentrate on the production and marketing of condensed milks derived from milk powder and butter oil or vegetable oil. The fifth, Foremost Dairies (Bangkok) Ltd. makes ice cream and filled milk products. Thai Dairy Industry and United Milk have also received licenses for the manufacture of long-life milk from imported ingredients. 4.08 All provinces have municipal abattoirs which provide slaughter facilities to butchers against fees as established by the Ministry of the Interior. The facilities are subject to inspection for hygiene but are generally inadequate for efficient sanitary operations, and meat inspection suffers from lack of qualified inspectors. In general, the provincial slaughterhouses are old simple shelters with a slaughter platform and a source of water but no other facilities. All provinces also have numerous unregistered slaughterhouses of various sizes catering mainly to local markets. Meat/carcass dealers often control provincial slaughterhouses and have "moderate" monopoly powers at the district/provincial level. 4.09 Slaughter of livestock for Greater Bangkok has had a checkered history. After many years of repeated and radical changes in government policy concerning livestock trading, the Livestock Trading Corporation was established in 1955 for the purchase, slaughter and sale of all livestock to be consumed in Bangkok. It took over the management of the two existing municipal slaughterhouses and a modern, well-equipped municipal abattoir was added in 1961. The Corporation made handsome profits until 1968, i.e., as long as it had monopoly rights in livestock trading and processing for Bangkok and Thonburi. Irregularities then led to a change in the trading regulations and during the 1970s, the Corporation's activities were confined to slaughtering only, working through private sector wholesalers for 'supply and distribution. 4.10 Greater Bangkok today has five municipal abattoirs, three of which are used for cattle, buffaloes and pigs, and two for poultry. Only one of the former abattoirs has modern facilities, and it is grossly underutilized. The BOI Livestock and Meat Products study found that even for the Bangkok bovine and swine abbatoirs, the level of technology and hygienic conditions - 134 - ANNEX 8 Page 22 are very low /1 and the standards of butchering are little different between official and illegal slaughterhouses. Poor quality slaughter has also had adverse effects on the tanning and leather industries. 4.11 The situation for poultry is quite different. With a factory license from the Ministry of Industry and a business license from the Ministry of Commerce, four modern facilities for poultry slaughter have been developed by vertically integrated firms since 1973. The firms have a special agreement with the municipality, paying fees as imposed by the city administration. Three of these firms are exporting frozen chickens under permits from the Department of Livestock Development. All the install- ations are of modern design, working with semi-automatic killing, cleaning, dressing, packing and freezing lines. This situation illustrates how appro- priate institutional and regulatory arrangements, giving rise to commercial incentives, can dramatically facilitate a dynamic export industry. 4.12 Unregistered slaughter in the Bangkok area also continues unabated. It takes place in backyards or specially designed buildings under uncontrol- lable sanitary conditions. All livestock are involved. The rate of illegal slaughter is uncertain; estimates vary between 50% and 75% of aill slaughter- ings. C. Price Developments and Pricing Policies 4.13 The development of average wholesale prices of livestock and live- stock products in Bangkok during the last 20 years is given in Table 2. Considerable price increases have occurred in all items. Increase, particularly during the 1970-80 period, was highest in the wholesale and carcass prices of cattle and buffalo meat. This is symptomatic of the small base population and, with stagnating or eroding populations, a worsening scarcity situation is likely to develop. The rate of increase in wholesale prices of live cattle and buffaloes was higher than that for their carcasses. However, the rate of increase for both live bovines and carcasses was much faster in the 1970s than in the previous decade. To a lesser extent, this situation also applies to the pig sector; however, overall price increases were considerably lower. The price of chicken meat has increased at the lowest rate owing to a general oversupply. Egg production is in line with domestic demand and price increases have kept step with the general increase in retail and wholesale prices during the last ten years. /1 Deficiencies relate to: (a) poor facilities and (even for the ones with modern facilities) low standards of hygiene, including unsanitary water; (b) poor management and maintenance resulting in very chaotic conditions; (c) lack of slaughtering and meat processing codes; and (d) poor stan- dards of inspections. 135 - ANNEX 8 Page 23 4.14 There have been significant changes in the retail price relation- ship between different meats. Beef has become the most expensive meat, and the competitive position of chicken meat has strengthened vis-a-vis pork (Table 2). The demand for beef appears to remain strong but if prices accelerate too sharply, a switch in consumer demand to pork and, particularly, to poultry may result in the future. 4.15 Compared with the prices of some major agricultural crops (rice, corn, cassava, kenaf) which compete with livestock for farming resources, the average farmgate prices of cattle and buffaloes have managed to keep pace with the prices of rice and maize, and have been rising more sharply relative to cassava and kenaf prices: AVERAGE INDEX OF FARM PRICE Period Rice Corn Cattle Buffaloes Cassava Kenaf 1967-71 100 100 100 100 100 100 1972-77 180 194 184 198 93 119 4.16 The price of locally manufactured sweetened condensed milk with more than 9% butterfat, using imported milk products, increased from B 5.75 to B 6.75 per kg of fresh milk equivalent between 1971 and 1979. In 1979, locally produced pasteurized milk was selling at B 10.0 per kg. 4.17 Price development for concentrate feeds has been in line with price trends in the crop sector. Strong competition and government subsidies (see next para.) have tended to retard price increases. The application of purchased concentrate feeds in milk and pig production remains attractive financially. B 4.50/kg of feed for every 2 kg of milk produced represents only about 40% of each kg of milk sold, and present farm-gate prices for lean-type pigs (B 20-21/kg liveweight) are about four times higher than purchased fattening rations (B 5.50/kg). In hen egg production, the employment of concentrates remains attractive; however, their use in broiler production is problematic at the present concentrate:broiler price ratio of about 1:2.5/2.8 at current farmgate prices. 4.18 The effects of pricing policy on livestock and livestock products is intricately linked to that of the feed industry and to the production of feed ingredients by farmers and by other processing industries. Past con- cern of keeping meat prices (particularly pork) from rising has resulted in meat price controls. This measure has spawned the enactment of other control measures to protect the chain of industries and enterprises affected. Thus -136- ANNEX 8 Page 24 compound feed prices had to be controlled to ensure the commercial viability of pork producers and, with the outcry from the feed mills, measures were taken to reduce the cost of key feed ingredients. For instance: (a) rice bran and soybean residues have export controls but no import restrictions;/l and (b) allocation of maize export quotas by the Department of External Trade must first take into account "domestic feed needs."/2 The main result of such regulations is a financial "squeeze" on the vegetable oil processor (especially for rice bran and soybean) and the farmer (particuLarly corn and rice producers). The commercial neat producers (particularly pork) have, however, been making "healthy profits" /3 because price contro:Ls have not been effective /4 and feed is relatively cheap because of the price- depressing effect of the above distortions on feed ingredients. The maize export quota, for example, has resulted in domestic maize prices being below sorghum prices by about 10% (a situation which should be reversed from the standpoint of feeding values)./5 The feed industry is, furthermore, benefited by financial subsidies affecting their production operations. /6 D. Trends in Domestic Consumption 4.19 Estimates prepared by the Office of Agricultural Economics for 1978 indicate that total average consumnption of fish and meat amount:ed to 38.4 kg per person annually. Fish consumption was 19.4 kg (50%), pork 10 kg (26%), 11 Rice bran and its residues are prohibited from export and the export of soybean residues cannot exceed 20% of production. Import taxes on soybean seeds, however, favor the soybean farmer. /2 Given the nature of the assessment (primarily through questionnaires to mills), there is a tendency for overestimation of domestic require- ments and hence a penalization against more lucrative export earnings. Since January 1982, however, export quotas have been discontinued except for negotiated agreements with Japan and Taiwan. /3 See Nibhond, op. cit. /4 In March 1981, for example, the controlled price for pork was B 35/kg, but the actual retail price was B 50-55/kg. /5 The real feeding value of feecd ingredients is further distorted by t-he method used to calculate the control price through the aver-aging of the basic formulae for pigs, ducks and chickens without considetration of types and age of each livestock. /6 Besides the promotion benefits under the BOI, the Bank of Ihailand sub- sidizes feed producers through: (a) a rediscount facility at 80% of the promissory note value at 5% interest; and (b) allowance for commercial banks guaranteeing the notes to charge interest from borrourers at rates not to exceed 7%. - 137 - ANNEX 8 Page 25 poultry meat 4.9 kg (13%) and beef 4 kg (11%). Pork remains the most popular meat, followed by poultry and beef in that order of preference. The above statistics indicate the following total production and consumption figures: Annual Total Consumption Product slaughter consumption per head ('000 head) ( 000 t) (kg) Fish - 671 15.7 Pork 6,200 440 10.0 Poultry 180,000 216 4.9 Buffaloes 232 176 4.0 Cattle 768 } Eggs - 167 3.8 4.20 The above estimates on availability of meat in 1978 are based on Government-s assumption that, in the case of pigs, cattle and buffaloes, about 50% of all slaughterings were unregistered. The above slaughterings represent extraction rates of 4% and 18% for buffaloes and cattle, respec- tively. At present performance levels, the number of annual buffalo slaughterings would be expected to be about twice as high, and actual slaughter of cattle would probably be about 50% lower. These adjustments combined would have little impact on estimated availability of beef. The average egg consumption appears most likely to have been overestimated, even if duck eggs were included. 4.21 A recent study initiated by the Thai Board of Investment /1 agrees with the above slaughter rates of pigs. Its estimate of poultry slaughterings is lower by about 12%. Based on data of the Thai Tanning Industry Associa- tion, the 1978 slaughtering of buffaloes is estimated at 464,000, that of cattle at 1,388,000. This would correspond to a rate of unregistered slaughterings of 75%. While the above number of buffaloes slaughtered might represent a reasonable annual extraction rate of about 8%, cattle slaughter- ings appear overestimated. They would indicate an extraction rate of about 30% which is far higher than can be expected at present performance levels. The Thai tanning industry would, therefore, probably have had access to hides from outside Thailand. /1 The Livestock and Meat Products Sector, UNDP/IBRD Technical Assistance Services to the Thai Board of Investment, Vallentine Laurie & Davies Pty Ltd., 1981. - 138 - ANNEX 8 Page 26 4.22 Milk consumption has been increasing rapidly during recent ye;ars as indicated below: 1971 1974 1978 1979 1980 Milk Import value (B million) 431 602 955 1,204 1,315 Fresh milk equiv. ('000 t) 155 218 392 494 526 Domestic Production Fresh milk equiv. ('000 t) 4.2 10.6 12.6 13.8 16.3 Total consumption ('000) - 225.9 381.8 412.9 446.0 Consumption per head (kg) - 6.0 9.4 9.1 9.6 Domestic production is still below 5% of total consumption. Import of milk products is mainly in the form of milk powder. The import bil:L has exceeded B 1 billion since 1979 and continues to show an increasing trend. E. Export Performance 4.23 Cattle and buffaloes for slaughter in Hong Kong and Singapore have been the traditional livestock export from Thailand in the past. They were assembled by export merchants in the disease-free zone of Southern Thailand and shipped by sea. Exports reached a high in the late 1960s, and fluctuated between 25,000 and 45,000 animals between 1960 and 1970. The export quota still allows the export of 50,000 animals annually, but actual exports are declining and only 14,000 animals were exported in 1980 (see Table 7). This was probably due mainly to an outbreak of foot-and-mouth disease in the disease-free zone. However, rapidly increasing domestic prices for cattle and buffaloes also make export less attractive. 4.24 Live pigs have been exported for a long time to Hong Kong. Export quantities have fluctuated tremendously. More than 50,000 grown pigs were shipped in 1959, but competition from the People's Republic of China reduced pig exports rapidly in the years chat followed. During recent years, only suckling pigs have been exported and their numbers fluctuated vastly from year to year. - 139 - ANNEX 8 Page 27 4.25 In order to provide pork and pork products for Singapore, a joint venture commercial pig farm has been established in southern Thailand. Production has started but a license to operate an export slaughterhouse has not been granted so far. 4.26 Poultry exports to Hong Kong and Singapore in the form of chicken and duck eggs and ducks have been going on for many years, but the most important recent development is the export of frozen chicken meat. This started in 1973 with the export of 138 tons by one firm to Japan, but there has since been a dramatic expansion. Exports from three firms reached 4,270 tons (B 157 million) in 1977, 13,500 tons (B 500 million) in 1979, and 1980 exports are estimated at 16,800 tons. More than 90% of all exports go to Japan. However, Japanese importers have indicated recently that this rate of expansion is unlikely to be maintained as broiler production in Japan will be expanded. Since 1979, trial shipments of frozen chicken meat have been sent to Rumania. V. LIVESTOCK DEVELOPMENT STRATEGY AND PROSPECTS A. Government Strategy 5.01 The Government's agricultural development policy during the Fifth Five-Year Plan (FY82-86) proposes a two-pronged approach to livestock development: (a) Expansion of efficient commercial production to support agricultural growth and expand exports. Private sector participation would be the focal point. Government's role will be limited mainly to the necessary policy measures needed to increase incentives for improving private sector production and efficiency and, where necessary, to minimize any adverse effects on smallholders. (b) Livestock development in support of poverty alleviation programs. The key objective would be the expansion and improvement of tradi- tional integrated livestock production on smallholdings to gener- ate additional remunerative on-farm employment and to increase farm production on a sustained basis. Where possible, such devel- opment would lead to commercial production. Cattle and buffalo production for draft and beef, and pig and poultry production are identified by Government as suitable subsectors. The challenge for Government is how to strike a balance between its growth strategy (providing incentives and support services for the highly commercialized private sector) and its support of the smallholder. To do this an assessment of the opportunities and measures for these two approaches is needed. - 140 - ANNEX 8 Page 28 B. Growth Strategy and the Role of the Private Sector Opportunities 5.02 The Government's growth strategy has been well supported by a dynamic private sector which has provided important services and facilities to promote efficient livestock development. The issue is what further opportunities are there for the private sector to expand their activities and what are the incentives and complemrentary support needed from Government. 5.03 The opportunities for the private sector lie in catering for the fast increasing fresh meat market in Thailand and for selected livestock products for export./l The important commercial fresh meat markets in Thailand are essentially the large cities (Bangkok, Chiangmai, Songkhla, Korat and Khon Kaen). Pork and poultry are expected to remain the preferred meats for domestic consumption, and. potential supply and slaughter is likely to be adequate without further government assistance. 5.04 Export prospects for broilers in the traditional markets of Hong Kong, Indonesia and Malaysia are not expeced to be as dynamic as in the past largely because of domestic developments in some of the countries themselves. However, according to the industry, the prospects for live, chilled and frozen poik and for pork products are good (especially for Singapore, Hong Kong, Japan, Korea and Malaysia). The key obstacle is the unwillingness of importers to purchase meat originating from Thailand because of the unhy- gienic slaughterhouse conditions (para. 4.10). If hygienic standards were to be improved (for example, to that achieved for the broiler industry), Thailand's pork exports would be acceptable. An equally important implica- tion for improving slaughterhouse conditions is the potential access to other high potential export opportunities for processed meats (especially roasted pork slabs or pieces, sausages and hams). 5.05 The Government's growth strategy should, therefore, improve the conditions to facilitate the expansion of livestock processing industries and exports of meat and meat products. Two areas for government support are: (a) pricing, marketing and regulatory policy; and (b) disease prophylaxis and control. Pricing, Marketing and Regulatory Policy 5.06 Because pig and beef price controls are ineffective (and there is no price control for poultry meat), the key area for Government's attention is in the pricing of feed and feedstuff affecting the mixed-feed industry. The effect of pricing policy on quality distortion of mixed feed (para. /1 Much of this discussion is based on the BOI-sponsored study on "Livestock and Meat Products Sector" (op. cit.). - 141 - ANNEX 8 Page 29 4.18) should be remedied. This requires a removal of maize export quotas and the abolishment of the price controls on feed ingredients based on averaged formulae for different livestock rations. However, to ensure more effective monitoring and enforcement of quality, these measures need to be accompanied by more realistic compound feed standards and the provision of enforcement authority over the feed mills by DLD. Furthermore, regulations governing export feed and feed ingredients should be repealed (including the prohibition of export of rice bran and bran residues). 5.07 The deregulation of slaughterhouse ownership and operation should take place with safeguards to ensure that reasonable standards of hygiene are achieved. A number of proposals have been made concerning such deregulation./l The problem is complex, and particularly difficult are the political implications of the proposals. While ultimately it is up to Government to explore the alternatives in depth, it might be worthwhile to review some preconditions which would be needed to make any proposals work. First, the objectives of slaughterhouse control should be clarified (e.g., is it equally important to obtain government revenues in addition to making the meat humanly safe?). Second, unless the standards of hygiene are differentiated between export market slaughterhouses and domestic market slaughterhouses, there is the danger of a wastage of investment funds. Third, any licensing system to be instituted has to link its issuance with prior disease inspection and the disease inspection agency need not be the licensing agency./2 Fourth, concomitant safeguards against monopolistic tendencies in the establishment of slaughterhouses should be considered. This could well include linkage of slaughterhouses to livestock auction markets and to slaughterhouse zones. Disease Prophylaxis and Control 5.08 The issue, in terms of the growth strategy, is what areas of disease prophylaxis and control should Government focus its attention on? The development of animal health in Thailand must reconcile government and private activities to provide an appropriately synergistic environment for the expansion of livestock production. The major area for reconciliation is in (a) the production, quality control, and distribution of vaccines; and (b) disease control and surveillance. Government, already selling cheaper vaccines than the private sector, needs to improve its quality (the good- quality swine fever is an exception). Government has the potential to produce and sell, potent and safe vaccines which are competitive with the /1 See, for example, the BOI livestock and meat study, op. cit. (pp. 68-69) and the recommendations of the NESDB Pricing and Marketing Study. /2 Furthermore, meat inspection/enforcement can be separated from general hygienic inspection of the facilities which implies separate roles for the veterinarians of DLD and the inspection staff of the Ministry of Public Elealth. -- 142 - ANNEX 8 Page 30 private sector. The private sector, however, is a potential source of new vaccine technology; it can import vaccines not produced by government, and through its diverse international connections can respond quickly to emergency requirement for vaccines. There is, therefore, a role for both government and private sectors. Gcvernment s vaccine production strategy should, therefore, be to make maximum use of the existing production capa- city and institute quality control procedures for its products. In parallel there must be an insistence on the quality control of commercial vaccines. A success by government in the production of cost effective, quality controlled vaccines will largely determine the future government and private sector shares of the vaccine market. The present distribution of vaccines by commercial livestock producers to their own farms (and to collaborating farmers) includes government-produced swine fever vaccine. Government-s strategy should be to make greater use of the commercial system of distribution in reaching the smallholder sector wherever possible. 5.09 Another area where Government has to play a key role is in disease control and surveillance. While the enunciated priority is the establishment of Thailand-s credibility in the export markets for its disease-free zone in the South, an assessment of the economic justification and the institutional capability to meet the more stringent overseas market demands is needed, especially for cattle and buffalo./l Given the dynamic trend of buffalo and cattle meat demand in Thailand and the difficulty in penetrating overseas markets, such economic justification is unlikely to be strong. Hence a large-scale FMD eradication program would also likely be unjustifiable. The control of live-animal movement, therefore, remains the important measure (in addition to vaccination) for disease prophylaxis and control. Greater authority should be given to DLD in imposing temporary animal-movement restrictions for containing disease outbreaks. Such a move must, however, be accompanied by measures to improve DLD's capacity for surveillance. C. Reaching the Smallholders 5.10 Although the potential for smallholder livestock development is far less than that for commercial producers, some potentially viable oppor- tunities are available in cattle, buffalo and pig production by improving the forage base, animal health, and improved breeding. The prospects for reaching the smallholders (taking into account the practical opportunities for alleviating key constraints) are discussed below for the more important classes of livestock and for priority support services by RTG. /1 See Appendix 2, para. 3. - 143 - ANNEX 8 Page 31 Cattle and Buffalo 5.11 While little can be done to stem the declining demand trend for draft animals,/l bovines will continue to be an important asset for smallholders as a means of utilizing agricultural by-products or accessible off-farm roughage, preparing and cultivating fields where mechanized farm traction is not available or too costly, and providing savings for emergency cash income. Furthermore, in spite of the decreasing demand for draft animals, bovine prices are expected to remain high due to the decreasing per capita availability of beef in Thailand. Since beef cannot be produced in large commercial units and there is no room for ranching development in Thailand on a significant scale, smallholder production support by government will continue to be critical. Furthermore, increased prices for beef should facilitate the application of more costly technology in bovine husbandry on smallholdings./2 5.12 Although buffaloes are inferior to cattle in their reproductive performance, weight gain and consumer preference as beef (cattle prices are presently higher than those for buffalo by 10-15%), under typical small- holder conditions, they are expected to be preferred for use on the farm because they excel cattle in their ability to work wet paddies, to haul heavy timber, and to thrive on course roughage of high fiber content. Hence, the buffalo is less constrained by declining feeding and forage opportunities than cattle - a very important consideration for the future viability of cattle/buffalo operations. 5.13 A key constraint for the production of both cattle and buffaloes is the inadequate supply of bovine stock which has resulted from a deteriorating feed base. This has particularly affected the performance of "improved" breeds which, without improved feed/forage availability, often do not perform as well (in terms of weight gain, fertility rates and calf mortality) as local animals. The improvement of permanent grazing lands by oversowing with tropical legumes could, to only a limited extent, improve the feed base. Although cropping incursions (mainly cassava) have decreased the amount of grazing land available and would prevent any extensive forage improvement program, a limited number of areas may be still available in the /1 This trend can only be evaluated in the context of the conditions favor- ing an increasing rate of farm mechanization. An in-depth study of these conditions and their long-term impact is required. /2 For the typical smallholder, proposals for the use of agricultural wastes (from rubber and pineapple) seed meals and oilseed cake for lot feeding of cattle presently has little practical potential since the proper utilization of such products requires sophisticated technology and high-energy supplements and proteins. - 144 - ANNEX 8 Page 32 Northeast /1 and in the North. In these areas, difficult issues related to the following would have to be resoLved: (a) stockowner participation and cost recovery; (b) effective methods of voluntary grazing control or enforced grazing management in order to maintain pasture productivity after improvement; and (to a lesser extent); and (c) legislation to protect improved grazing lands from encroachment by squatters. 5.14 However, a better potential for increasing forage production exists, which complements the cropping system itself. The objecl:ives here would be to create stable, economically viable farming systems suited to the particular conditions of the ecolog:ical zones concerned, and to develop cropping patterns which not only benefit animals by supplying more and better feed, but also benefit the various crops by improving soi:L fertility. This would be equally important for cow-calf operations in the Northeast as for the fattening of oxen on smallholdings in and around the Central Plains. Among the opportunities for integration of forage into the farming system, the following are likely to be the most successful:/2 (a) establishment of farm forage and backyard fodder crops (hamata, stylo, siratro, guinea grass); (b) intercropping of upland cIrops with leguminous fodder or grains that provide useful feed residues. The best prospects are legumes (e.g., Siratro and Lablab') grown as an intercrop with cassava; (c) establishing fodder crops on uncertain residual moisture after paddy. The best prospects are likely to be forage legumes (Hamata Stylo and sun hemp); and (d) establishment of perennial. legumes on waste/idle land or dikes. The best candidate is Leucaena. These opportunities minimize three important constraints to integrating forage on the farm: (a) the labor requirement for the establishment of forage catch-crops at a time when available! family labor is needed for harvesting; (b) potential land competition with food or cash cropping needs; and (c) the need for additional smallholder cash outlay for hitherto untested practices. /1 Low, open forests in parts of Nong Khai, Udon Thani, Sakon Nakhon, Nakhon Phanom and Ubon Ratchatani provinces where poor quality soils (Phon Phisai, Nam Phong, Wang Saphung and Chiang Khan series) are found. /2 Fodder development on fallow land has the least potential for success because of increasing pressure to use land for food and cash crops. - 145 - ANNEX 8 Page 33 There is also potential for fodder conservation and straw treatment techniques suitable for small farms (e.g. straw treatment with alkali and correct preparation of cassava leaves) to be developed simultaneously so that additional feeds would not be wasted and carried over into the periods of inadequate fodder supply. The realization of these opportunities could mean the difference between having three rather than two buffalo on the typical Northeast farm which could translate into a substantial improvement of the familyTs cash income status (since cattle/buffalo operations typically contribute to nearly 50% of cash incomes). For the marginally surplus or commercial smallholder, a potentially viable opportunity exists, in addition to the above, for improving the feed base on the farm. By intercropping an oilseed like groundnut with cassava and with a farm-level oil expeller (to produce oilseed cakes) combined with an improvement in the useability of cassava roots as an energy source (and possibly limited purchase of commercial premise to balance these farm-produced feeds), homemade feed mixing is feasible. Furthermore, there may be a need for effective fencing against free-roaming village stock after the main harvesting period. 5.15 Another important prerequisite for increasing livestock productivity is the improvement of animal health. Not only are a number of diseases fatal (e.g., anthrax, haemorrhagic septicaemia, black leg, swine fever), but quite a few have debilitating effects of substantial economic importance (e.g., foot-and-mouth disease for cattle). The present disease prevention system focuses almost exclusively on vaccinations. This system is largely ineffective because it is not supported by an adequate diagnostic service, the extent of coverage is limited and other important diseases exist for which vaccination is not the preferred method of prevention/control (e.g., husbandry in relation to calf diseases or treatment in relation to trypanosomiases). To be effective in reaching the smallholder, Government has to reorientate its approach towards programs that can provide a package of advice and inputs which includes husbandry, control of animal movement, prophylaxis (by vaccines and drugs) and treatment. Animal health inputs should, therefore, be integrated with the feed/forage investment programs outlined above. Hence, in combination with the relatively limited numbers of improved local breeds available for distribution, government support can better ensure the attainment of their productivity potential. 5.16 A number of other specific programs would be required from govern- ment in support of smallholder cattle and buffalo development. These include: (a) emphasis on both natural breeding (loan-bull program) and artificial insemination with the emphasis of the latter in accessible areas of high livestock concentration; (b) the establishment of upcountry markets or livestock holding yards for cattle and buffaloes to improve market efficiency and strengthen the bargaining position of stock owners and allow the movement of stock as draft, or, as is increasingly the case, for direct sale for beef; - 146 - ANNEX 8 Page 34 (c) opportunities for increasing cow-calf (breeding) operations should be explored in depth. A pricing policy which differentiates according to beef quality is needed to bring about a stratification of beef production, with cow-calf operations predominating in areas where a satisfactory forage base exists, and fattening operations in areas where byproducts (from arable farming) can form the basis for the regular feeding of a few animals up to slaughter weights; and (d) smallholder cattle and buffalo development will still need to depend on public sector support. The institutional structure as well as the arrangements for farm level support need strengthening (see paras. 5.22-5.25 below). 5.17 Hence, a minimum inputs package approach combining animal upgrad- ing, vaccine distribution, and extension support to improve feed/forage availabilty will have a significant impact on the smallholder, if organized and implemented properly. DLD would be responsible for package formulation and evaluation and the training of subject matter specialists. While the choice of what animals to target for improvement would depend on the location of the program, cattle and buffalo should be prominent features. Dairy 5.18 The long-term expansion p:Lan proposed by Government /1 for the dairy industry is overambitious: it calls for the introduction of dairying to 20,000 "smallholders" (each with two cows) in 12 years. Government, through its Dairy Promotion Organization (and supported by DLD and BAAC) has, in its 10 years of existence, been able to reach only about 2,400 producers (average 5 cows each) with average farm sizes of 3-5 ha (much of which is good corn land) - hardly smallholders by Central Region standards. 5.19 The biggest problem with the plan is that it is essentially imbued with import substitution for its ownI sake (i.e., to increase self-sufficiency in all milk products from 4% of total consumption to almost 20% in the early 1990s) when the only relevant consumption it should be concerned with is the liquid milk market. Although this miarket (especially the ultra heat-trealted or UHT milk) is very dynamic (UHT milk demand is expected to expand at 20%' per year to 1988 and at 10% later on), the problem is that MIT milk processors prefer to use imported raw materials (skim milk powder and anhydrous milk fat) presently costing B 5.7/1 of UHT milk produced (ex-processing plant) rather than the local dairy farmers' milk (equivalent to about B 6.6/1). A reduction of the EEC surplus mountain of milk powder stocks has occurred in the past: few years, but further reductions of supply are unlikely to continue. A general levelling off in world market prices of skim milk powder may, /1 "A Plan for the Development of the Dairy Industry in Thailand," New Zealand Bilateral Aid, December 1980. - 147 - ANNEX 8 Page 35 therefore, be expected. At present (1981/82) prices for domestically-produced and imported dairy imgredients, reduction in the price of domestically- produced milk by about 10% would make raw milk from the dairy farmers acceptable to the private dairy processors. This would reduce returns, but dairy farming would remain financially attractive. A moderate expansion of milk production for the liquid milk market and geared to the processing capacities of existing UHT plants would, therefore, appear feasible. In any case, dairy development can only proceed on a limited scale, given that (a) likely areas proposed for dairy development (the southwest portion of sugar/pineapple areas of the Central Region) are not the Government's poverty districts, and (b) animals suitable for dairying are in scarce supply./l Pig and Poultry 5.20 Our preliminary assessment indicates that it is too late to develop commercially viable poultry production by smallholders since all important market outlets are saturated by large-scale private sector production. In the pig sector,' however, some opportunity still exists. Some private firms have indicated an interest in providing management assistance to self-sustained cooperative sector pig production on a contract basis. On the farmers' side, the feed base and basic skills are available to produce pork of uniformly good quality which would be acceptable in domestic and overseas markets. At this point, the complementary roles of public and private sector support to cooperative pig production need to be defined in greater detail, but it seems likely that the role of the private sector would be to provide production management (and marketing) through cooperatives and Government's role, besides supporting the cooperatives, would be of a catalytic, regulatory and intervening nature for which the institutional and legal base would need to be strengthened. 5.21 In contrast, the economic viability of pig production by individual smallholder units is still unclear. Smaller units would require higher recurrent costs for technical guidance and input supply, which private firms are unwilling to incur under their usual contractual arrangements. Such additional expenditure would need to be borne by Government. Furthermore, in comparison with the rigid control over contract growers which is exerted by vertically integrated firms, pig production in smaller units may work at somewhat reduced efficiency levels. The higher recurrent costs plus the potential losses due to reduced efficiency would need to be weighed against the benefits derived from the increased smallholder participation. At this stage, it may be prudent for Government to focus its resources primarily on potentially commercial smallholders producing pigs and chicken for smaller urban markets. /1 Imported heifers would be too expensive for large-scale smallholder dairy development particularly because of feeding requirements and animal health effects. Hence crossbreds have first to be produced domestically. - 148 - ANNEX 8 Page 36 Implications for the Expansion of Government Support Services 5.22 Government services are likely to have the biggest and most widespread impact on smallholder production if production support is focused on beef cattle and buffalo (see paras. 5.11 and 5.19). Such support services should be formulated to integrate as far as possible: (a) the upgrading of bovine breeds; (b) improving disease prevention and control; and (c) improved feed/forage availability. The key to their success is improved planning, organization, and coordinated implementation of field services to the farmer. Hence, the institutional development of the Department of Livestock Development (DLD) and the strengthening of its links with other agencies are critical. 5.23 With respect to animal health, the major components of a modern animal health service exist but they are not all operating as viable and efficient units, and they are not adequately integrated into national disease control policies. There is overall need to strengthen the diagnostic and disease investigation capability of DLD and the quality control of both domestic and imported vaccines. Integration of activities can be improved through (a) the establishment of a central unit for epidemiology and economics linked with the work of DLD-s planning and evaluation unit, and (b) the streamlining of animal health field services. 5.24 Hience, in order to face the changing needs of the livestock subsector in Thailand, the DLD has to: (a) increase its ability to plan and program for orderly and cost effective development of the subsector and to effectively monitor priority developmental activities; (b) identify priority areas for program emphasis and increase the effectiveness of livestock services by rationalizing divisional functions and the role of livestock stations; (c) increase its own capability to provide coordinated technical support for relevant smallholder production packages and programs to increase livestock production in priority areas; and (d) improve its coordination with other support service agencies (particularly BAAC, DOAE, DPO)/l to facilitate the sccessful adoption of improved practices. /1 BAAC: Bank for Agriculture and Agricultural Cooperatives; DOAE: Department of Agricultural Extension; DPO: Dairy Promotion Organi- zation. - 149 - ANNEX 8 Page 37 D. Livestock Sector Performance and the Fifth Plan Targets 5.25 Livestock GDP for 1975-80 and the targets for 1986 and 1990 are presented below: Bovines /a Pigs Poultry Eggs Total /b A. Livestock GDP (Billion 1972 Baht) 1975 1.78 1.81 2.07 1.67 7.38 1976 1.93 1.71 2.13 1.82 7.62 1977 2.09 1.89 2.18 1.89 8.10 1978 2.10 1.83 2.47 2.06 8.52 1979 2.08 2.00 2.62 2.19 8.93 1980 2.19 2.16 2.85 2.44 9.70 1981 2.2 2.2 2.9 2.5 10.0 1986 NESDB 2.4 2.5 3.6 3.7 12.3 Mission 2.5 2.8 3.7 3.7 12.8 1990 2.8 3.4 4.5 4.7 15.7 B. Annual Growth Rate (in %) 1975-80 3.7 3.8 6.9 7.5 5.4 1981-86 NESDB 1.8 2.2 4.6 7.4 4.2 Mission 2.5 4.9 5.0 7.4 5.0 1986-90 2.5 4.0 5.1 7.4 5.2 /a Cattle and buffaloes. lb Includes livestock products other than categories shown. Source: NESDB 5.26 NESDB's projections appear to be conservative, despite the fact that the livestock sector was the only one to grow faster in the late 1970s than in 1960-75. Duriong the Fifth Plan Period (1981-86), NESDB projects a growth rate for livestock GDP of only 4.2% per annum (compared with 5.4% in 1975-80) with the slowdown in growth particularly adverse for bovines (cattle and buffaloes), pigs and poultry. 5.27 The mission's assessment is more optimistic, with a livestock GDP growth rate of 5.0% p.a. in 1981-86. Bovine production growth (2.5% p.a.) will be substantially below that achieved in the latter half of the 1970s (3.7% p.a.) with the feed base and long-term nature of improved breeding constituting the primary constraints. We also anticipate a slower growth for poultry production in the future because of the saturation of overseas markets for frozen chicken and poultry products. The most dynamic subsector - 150 - ANDIEX 8 Page 38 will be pork and pork products. With the anticipated liberalization of slaughterhouse regulations to permit private sector slaughter (and processing) for exports, we expect the commercial sector in Thailand to respond accordingly, and supply is unlikely to be a constraint. 5.28 Because livestock products face high income elasticities of demand, domestic consumption increases will be the main impetus for the livestock sector. In line with historic trends, bovine meat prices are expected to increase the most as this is the subsector that faces severe supply constraints. Pork prices may well fall in real terms as its large-scale commercialization expands further. E. Impact of Future Livestock Production on Regional Development 5.29 Private sector pig and poultry development will continue to be con- centrated around large consumption centers and in areas where staple feed ingredients are freely available. The existing concentration in the provinces around Bangkok will persist and some expansion towards the corn-growing areas of the southern Northeast might develop. Production in this center will cater for the Bangkok market and for export. Commercial production will also expand around the cities of Chiang Mai in the North and Songkhla in the South to serve smaller markets in outlying provinces. 5.30 Other livestock developments also have implications for regional development. The improvement of cattle and buffalo raising in the Northeast would strengthen the economic position of the areas selected. Dairy development would have a similar effect, although the areas benefitted would be more limited geographically (primarily around large urban centers) in order to keep down the cost in extension and milk collection. The ecologically favorable conditions for dairying in the North may also allow some compact zones of milk production in that region. Although the Malaysian example of milk production from forage grown under stands of old coconut palms has been cited as an example of promoting dairying in the South, the scarcity of suitable animals and the area's remoteness from the major fresh milk consumption center around Bangkok are key limiting factors. VI. PROGRAMS FOR EXTERNAL ASSISTANCE 6.01 At the national policy level, the Government's Fifth Five-Year Plan includes the following broad measures and programs for livestock: (a) Assistance to smallholders in the major cattle and buffalo raising areas to arrest the decline in stock numbers and to make the pro- duction of bovines financially more attractive by the application of improved technology. This development would be supported by intensified veterinary service, advice on fodder production and distribution of stock under cattle and buffalo "bank" schemes. Government is also considering a ban on buffalo export to conserve animals for domestic use as draft and for beef requirements; - 151 - ANNEX 8 Page 39 (b) Expansion of livestock disease surveillance, prophylaxis, and control services; (c) Expansion of domestic vaccine production. Where possible, vaccines produced by the public sector would be sold to recover the cost of production; and (d) Amendment of various government regulations - particularly of the Slaughter Control and Meat Distribution Act of 1959, and of the Livestock Breeds Improvement Act of 1966 - to allow the free move- ment of live animals and meat, and private sector investments in slaughter and meat processing facilities. These are very appropriate for the problems and constraints identified earlier. 6.02 Following discussions with the Government, the following programs are proposed as deserving further consideration for external assistance: A. Cattle, Buffalo and Forage Development 6.03 External assistance is likely to include the following key components: (a) Improving the feed base. In the Northeast, through increasing use of farm backyard, fallow land and intercropping opportunities with upland crops for forage production and, to a more limited extent, the improvement of rangelands for communal grazing. In the Central Plain, through cultivation of quick-growing legume forage on residual soil moisture after paddy, and use of treated straw for stock feeding; (b) Intensification of veterinary and extension services in priority areas; and (c) Development of simple decentralized cattle and buffalo markets in strategic locations to improve the marketing position and prices received by stock owners. Sufficient information is available for the preparation of investment proposals concerning the above activities. - 152 - ANNEX 8 Page 40 B. Dairy Development 6.04 Dairy development activities would likely be limited., Four components may be considered for foreign assistance: (a) The expansion of efficieznt artificial insemination services in the Northeast to produce domestically crossbred cattle suitable for intensive dairying; (b) The systematic retrieval of crossbred calves at guaranteed prices. (Groups of heifer calves would be raised to first parturition, male calves could be raised by contract smallholders on a cost and profit-sharing basis, either for draught or for slaughter); (c) A pilot smallholder on-farm development program supported by input supply, extension and long-term credit; and (d) Some expansion of milk ,zollection and processing facilities in the dairy production areas. C. Smallholder Cooperative Pig Production 6.05 The development of cooperative pig production (private sector managed) would possibly entail thez following major components: (a) The establishment of pig breeding units on a subprovincial basis in order to produce boars and gilts for specialized weaner producers; (b) The establishment of feed mills to provide quality concentrates for all cooperative members; and (c) A supporting system of input supply, credit and extension. Cooperative marketing and processing would be envisaged for a later stage. The integration of private sector technical and managerial advisory services (on a contract basis) is the key factor and the agreement of all parties concerned would be required before details of an investment program could be worked out. This condition may not now be obtained since pig slaughter and processing is deregulated for the export market. - 153 - ANNEX 8 Page 41 D. Disease Control and Surveillance Support 6.06 These actvities would entail the following main components: (a) improving diagnostic investigation services; (b) improving quality control of vaccines including sub-typing of F&M field strains; (c) improvement in the transport of vaccines to the field and the maintenance of their integrity; (d) program in consultancies and fellowships; (e) establishment of a veterinary epidemiology and animal health economics component within the DLD planning and surveillance unit; and (f) improvement of training of veterinary assistants. Issues of private sector participation in vaccine production and of cost recovery for vaccine produced in the public sector need to be resolved before detailed proposals concerning vaccine production can be worked out. Also the roles of various foreign donors should be rationalized./1 Investment proposals for disease surveillance and control services can, however, be established independently. E. Manpower and Research Development 6.07 These activities would probably be concentrated around: (a) The establishment of training programs in DLD's specific field activities (diagnostic, vaccination or artificial insemination services); /1 Vaccine production is being assisted under the Bank's Northeast Live- stock Development Project. The FMD Vaccine Production Center has been funded by a grant-in-aid project by Japan which also provides technical assistance. French aid contributed one million doses of FMD vaccines for cattle and 0.3 million doses of FMD for pigs. In addition, Govern- ment has made a special budget allocation of B 10 million for disease control and have allocated B 6 million to set up a revolving fund. Despite these valuable contributions which were piecemeal, a more comprehensive approach is needed. - 154 - ANNEX 8 Page 42 (b) The development of a training program and other support for DLD-s subject matter specialists (from its technical divisions) to advise field staff on matters of forage production, :Livestock husbandry and feeding; and (c) A study concerning the research requirements in support of smallholder livestock production (and its link to the cropping system) and the subsequent financing of essential facilities in central units and field stations. 6.08 Details of the above development programs can be worked out oln the basis of a large amount of information already available (see the Biblio- graphy in Appendix 4 for relevant background material) and on the basis of further assistance from the key government agencies involved in livestock development. - 155 - ANNEX 8 Table 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Livestock in Thailand's Agriculture 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 GDP from livestock (B billion in current prices) 4.8 5.5 5.9 6.3 10.6 11.5 12.4 14.4 12.7 16.9 Rate of growth (% in 1972 constant prices) 4.8 6.7 6.7 10.1 3.3 6.3 1.2 4.7 Contribution of livestock to 9.7 11.6 total GDP from agriculture (%) 12.5 13.5 11.8 8.6 12.5 12.2 11.9 13.0 Rate of growth in agricultural sector (% in 19_ constant prices) -1.2 12.7 1.3 9.0 6.1 -0.5 14.5 -1.9 Share of production from: (a) Cattle and buffaloes (%) NA NA 30 32 31 33 32 28 33 26 (b) Pigs (%) NA NA 21 13 22 22 17 32 16 29 (c) Poultry meat (%) NA NA 29 30 26 27 27 23 27 22 (d) Eggs and milk (%) NA NA 20 25 21 19 23 17 24 23 Export performances: (a) Agriculture sector (B billion) 45.7 52.2 54.4 69.3 (b) Live cattle & buffaloes (B billion) 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 (c) Frozen poultry (B billion) 0.0 0.0 0.1 0.1 0.2 0.3 0.5 Source: NESDB, OAE, Bank of Thailand, Dept. of Customs. - 156 - INNEX 8 Table 2 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Average Wholesale Prices in Bangkok Average Average Average 1959/61 1969/71 1979/80 % Increase % Increase Baht . Baht above 59/61 Baht above 59/61 Live buffaloes (head) 1,150 100 2,251 196 5,460 475 Live cattle (head) 1,110 100 1,718/b 155 5,148 464 Live pigs (kg) 6.31 100 8.28 131 20.33 322 Bull carcass (kg) 5.48 100 8.13 148 19.58 357 Beef carcass (kg) 5.89 100 9.86 167 22.79 387 Pork carcass (kg) 7.53 100 6.81 90 23.33 309 Chicken meat (kg) 11.08 100 12.19 110 22.62 204 Chicken eggs (100) 52.06/a 100 44.45 85 119.48 230 Duck eggs (100) 53.03 100 46.18 87 127.23 240 /a Average 1960/61. /b 1969 only. Source: OAE. TIAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES DLD Budget for 1981 Permanent Temporary Com- Pardiem Water Land con- Name of the programs Salary employee employee pensation allowance electric Material Equipment struction Subsidy Others Total General Administration Admin. Section 5,435,700 2,002,800 298,200 309,900 2,018,800 421,000 2,612,000 259,400 2,000,000 655,000 - 16,012,800 Feed Quality Control 963,800 229,000 239,000 39,000 493,400 - 230,000 2,100,000 - - - 4,294,300 Animal Treatment Section 198,400 82,800 - 38,000 - 383,100 Livestock Breeding & Extension Cattle breeding stations 10,319,400 17,477,400 3,859,000 588,900 3,259,900 1,573,600 22,035,200 5,561,700 9,967,000 - 350,000 75,992,100 Buffalo breeding stations 1,129,300 3,115,000 777,800 630,100 630,100 130,900 2,337,600 1,055,000 3,267,000 - - 12,558,300 Small animal breeding stations 1,028,900 1,684,700 82,100 111,300 418,000 54,500 5,000,000 262,900 1,800,000 36,000 - 10,478,400 Poultry breeding stations 639,300 1,111,000 77,800 135,100 304,100 119,500 4,208,500 359,400 800,000 - - 7,754,600 Livestock extension work 3,849,400 3,552,900 666,100 83,400 2,469,500 78,100 2,181,600 1,282,500 3,404,000 - 2,923,800 20,491,300 Artificial insemination 5,762,300 2,606,000 91,000 407,700 1,764,300 520,000 6,826,100 4,380,000 4,107,000 - - 26,524,400 Animal feed 4,680,500 6,153,500 1,800,300 150,400 1,555,400 358,700 4,383,200 2,075,600 5,274,000 - - 26,441,600 Development of livestock areas 1,098,900 2,321,000 1,049,800 - 704,400 93,700 1,102,000 828,500 2,084,000 - - 9,282,300 Livestock dev. project 7,630,500 3,326,400 1,739,300 250,000 4,943,000 471,902 6,897,500 84,300 6,105,900 - 2,466,500 33,915,300 Nongwai irrig. & agri dev. - - - - - - - - - - 191,700 191,700 Land dev. in Prachinburi & in Chachoengsao provinces - 59,000 278,300 2,800 83,000 - 539,700 432,000 1,072,000 - - 2,466,800 Livestock projects for ex- portation in S. Thailand - - - - - - - - - - 3,500,000 3,500,000 Land development project in Thung Kula Rong hai - - 634,400 12,000 394,000 3Z,000 995,000 1,906,500 3,300,000 - - 7,282,900 Research Works Animal health & veterinary research 6,513,800 1,810,000 - 55,000 1,520,200 475,500 1,520,000 1,320,700 1,980,000 - - 15,155,700 Animal feed research 2,219,500 1,291,100 243,000 66,200 305,800 52,600 840,000 375,700 891,000 - - 6,284,900 Research on pig breeding & sultiplicst8on 315,600 781,900 160,l00 23,000 495,700 - 4,164,600 378,600 1,520,000 - - 7,839,500 Disease Control & Eradication Vaccine production 4,999,400 6,159,900 - 93,200 407,500 1,045,800 10,477,900 10,477,900 4,800,000 - - 31,735,100 Disenae eradication & treatment 64,715,300 8,636,300 - 4,075,400 23,891,200 690,600 5,165,500 5,165,500 6,936,000 500,000 - 119,973,300 Total 121,500,000 62,460,700 12,005,300 6,567,300 46,683,700 6,125,400 75,018,900 38,306,200 59,207,900 1,191,000 9,432,000 438,558,400 Source: DLD ztl ANNEX 8 - 158 - Table 4 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Artificial Insemination for Dairy Cattle No. of No. of Conception Number Number Per cent Per cent Total no. cows in- calves rate 1st ins. AI/calf AI/calf calvings/ cows Year of AI seminated born per cent born born/year AIL calving 1973 14,264 1974 13,113 7,024 3,937 34 3.0 1.9 28 59 1975 12,407 6,084 4,170 32 3.1 2.0 32 61 1976 12,984 6,349 3,710 40 3.3 2.0 30 74 1977 16,002 7,409 4,726 40 2.7 2.2 36 66 1978 18,364 8,435 4,917 45 3.3 2.2 29 63 1979 8,610 5,346 3.4 Source: Artificial Insemination Division, DLD. - 159 - ANNEX 8 Table 5 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Present Production, Sales and Targets of Vaccine Production Sales to Target after Present private 5-year production sector development (000) FMD for cattle and buffaloes 6,000 4,960 30,000 FMD for pigs 600 200 10,000 Haemorrhagic septicaemia 4,000 2 10,000 Anthrax 220 1 10,000 Blackleg 55 0 500 Brucellosis 250 1 1,000 Rinderpest 600 - 600 Swine fever 1,500 78 6,000 Newcastle disease 100,000 34,100 200,000 Fowl pox 10,000 1,900 20,000 Fowl cholera 4,000 1,900 15,000 Infectious bronchitis 10,000 2,300 20,000 Duck plague 24,000 - 50,000 Source: DLD. - 160- ANNEX 8 Table 6 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Export of Selected Feed Ingredients (Quantity in thousand tons, f.o.b. value in million Baht) Broken Rice Rice-bran Corn Fish-meal Tapioca /a Year Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value 1971 - - - - 1,806,035 2,185 - - 1,123,684 1,240 1972 33.74 30.56 - - 1,757,579 1,980 - - 1,311,038 1,547 1973 9.21 13.88 - - 1,386,374 2,969 - - 1,836,453 2,537 1974 0.08 0.10 - - 2,291,478 6,047 21.95 129.36 2,395,704 3,836 1975 - - 0.011 0.47 2,104,733 5,705 26.92 135.72 2,385,443 4,597 1976 8.18 16.03 0.716 3.35 2,419,186 5,676 49.08 248,58 3,720,710 7,527 1977 5.71 11.78 0.591 2.68 1,534,297 3,329 75.62 534.66 3,954,366 7,720 1978 0.02 0.07 0.851 2.82 1,972,446 4,275 132.96 725,73 6,285,213 10,887 /a Tapioca flour & tapioca starch. Source: Department of Customs. ANNEX 8 - 161 - Table 7 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Cattle and Buffalo Exports Value (million Baht) Total as x Quantity ('000 head) Agriculture Year Cattle Buffalo Cattle Buffalo Total Exports 1967 11.0 40.0 17.1 76.1 93.2 0.8 1968 8.0 23.0 12.6 49.1 61.7 0.6 1969 9.0 26.0 15.1 49.7 64.8 0.6 1970 9.0 26.0 15.6 57.2 72.8 0.7 1971 12.0 25.0 22.7 68.4 91.1 0.7 1972 18.0 25.0 39.3 76.2 115.5 0.7 1973 26.0 20.0 58.4 80.2 138.6 0.6 1974 18.0 11.0 57.8 57.2 115.0 0.3 1975 12.0 12.0 45.8 73.0 118.8 0.4 1976 12.8 16.1 47.9 99.3 147.2 0.3 1977 24.4 17.4 106.0 108.5 214.5 0.4 1978 27.7 22.8 113.6 137.8 259.4 1979 24.7 18.1 104.8 102.4 207.2 1980 8.5 5.0 49.6 30.9 80.5 Source: Office of Agricultural Economics, Ministry of Agriculture and Cooperatives. - 1152 - ANNEX 8 Appendix 1 PELge 1 TIAILAND AGRICULTURAL PROGRIM AND POLICY PRIORITIES Northeast: Farm Production Profile for Livestock A. Distribution and Holding Size 1. The findings of the 1978 Agricultural Census /1 concerning the distribution of livestock on farm holdings in the Northeast are summarized in Table 1. The following picture emerges: Percentage of agricultural Number of animals reported Farm households reporting per agricultural household animal Range Mean Range Mean Buffaloes 48-85 75 2.2-3.4 2.7 Cattle 10-32 23 3.4-7.1 4.7 Pigs 13-52 26 2.3-4.1 3.2 Chicken & ducks 70-98 83 9-14 11.6 2. Buffaloes were kept by about three quarters of farmers. Their distribution is very similar to that: calculated from the Village Surveys of NSO in 1974. The average number of buffaloes was 2.7 in 1978, up from 2.3 in 1974. About two thirds of all buffaloes are three years and older, and 40% of them were females of breeding age. Three quarters of all breedable females were used for work. 3. Cattle ownership was reported by 23% of all smallholders. This distribution corresponds again closely to that reported in 1974. The average number of cattle in 1978 was 4.7 compared with 4.1 in 1974. There is considerable concentration in the class of 5-19 head per farm holding. About two thirds of all cattle were two years of age or older, and about 50% of cattle represented females of breeding age. Only about 15% of all breedable cows were used for work. 4. Pigs were kept on about one quarter of all smallholdings. Distri- bution seems to have shrunk since 1974, possibly as a result of expanding commercial production and reduced demand for fat-type pigs in the market. /1 NSO, 1978 Agricultural Census Report for Chaiyapum, Buriram, Sisaket, Surin, Yasothon, Kalasin, Khon Kaen, Mahasarakam, Loei, and Sakon Nakcrn. The census for the other provinces (Ubon Ratchatani, Nakorn Ratchasima, Nakon Phanom and Udon Thani) was not yet available for analysis. - 163 - ANNEX 8 Appendix 1 Page 2 The number of pigs per holding has increased, but at 3.2 pigs on the average holding, methods of commercial production still remain unapplicable. 5. Poultry is kept by the majority of smallholders in the Northeast. The flock size remains small at about 12 birds per holding, but small amounts of cash are derived regularly from backyard poultry keeping involving vir- tually no cash outlay. B. Husbandry and Feeding 6. The Northeast remains Thailand's most important region for cattle and buffalo raising. Of a total land area of 159,300 sq km, in 1975/76 101,440 sq km was in agricultural holdings, 47,050 sq km was classifie2 as forest, 5,400 sq km as idle scrub land and 5,410 sq km as waterways, urban and swamp lands./l The latter three-categories.of land are the major source of off-farm roughage for cattle and buffalo raising. The extent of these lands is decreasing, but the increase of cattle and buffaloes in the Northeast between 1973 and 1979 indicates that smallholders have been in a position to obtain the fodder required for feeding their bovine stock during the time when agricultural lands for growing crops were also expanding. 7. About 75% of the agricultural land is bunded for rice cultivation, but on average, only two thirds of these lands are actually cropped due primarily to the concentration of production on better watered fields when rainfall is delayed. Most of the remaining areas are uplands used for field crops - the three important ones being maize, cassava and kenaf. Smaller areas are under sugarcane, groundnuts, cotton and mungbeans. All crops are grown in the wet season and after harvest most land lies fallow through the dry season. 8. During the cropping season, cattle and buffaloes have no access to the land under crops. They subsist on any feed available on land left fallow, on waste areas, waterways, roadsides, etc., and on grazing lands in forests which are within reach of villages. This concentration of all stock on limited areas leads to intense grazing pressure. The animals may receive a little additional feed in the form of weeds removed from the rice or other crops, but feed is often in critically short supply towards the end of the wet season. 9. After crop harvest, livestock are allowed to roam at large over virtually all village agricultural land. A second crop on remaining soil moisture is often not possible without elaborate fencing. For a brief period, the level of nutrition improves as the animals graze stubble fields. /1 World Bank, Thailand: Toward a Development Strategy of Full Participa- tion, Working Paper No. 4, Land Utilization and Development, Nov. 1978. - 164 - ANNEX 8 Appendix 1 Page 3 As the dry season advances, feeding depends on agricultural by--products. Rice straw of low nutritive value is the staple, maize stover and hay from groundnuts and mungbeans have higher feeding value, but are of limited availability. Also sugarcane tops and boiled cassava leaves are used whereas kenaf yields no by-products for feeding. By-products from grain milling are normally not fed to any class of bovines, but are reserved for pigs and poultry. The limited supply of feed and its poor quality restricts the number of animals that may be carried and profoundly affects their productivity. The low level of nutrition impairs reproductive performance, results in poor growth rates and renders the animals more susceptible to parasitic infections and other diseases which, combined primarily with nutritional deficiencies, lead to high mortality rates in young stock. 10. The main advantage of the present system of cattle and buffalo husbandry is its low cost (with virtually no cash outlay other than perhaps a fee for having the females mated). 'Shepherding during the day provides employment to adolescents and the elderly. The system also al:Lows farmers to use virtually all their land for food and cash crop production; the animals are largely fed on resources that have no economic value. Finally, the traditional system ensures that all farmers -- even those farming small areas -- have the opportunity to maintain bovines as everybody is entitled to use the nonagricultural lands in the vicinity throughout the year and agricultural lands after the crops have been harvested. 11. The system has serious disadvantages, too. First, there is no incentive for stockowners to limit stock numbers in order to increase the productivity of communal grazing lands and to obtain better overall stock performance. As a result, most communally used grazing lands have lost the palatable, nutritious forage species they once had. Second, the practice of penning livestock at the homestead overnight to avoid theft, limits grazing time and nutrient intake, and results in the transfer of nutrients away from the grazing lands. Third, the free grazing on all agricultural lands after the harvest impedes the introduction of a catch-crop after the main crops. Fourth, as all classes of stock are grazed together, it is difficult to differentially feed for different age groups and calving and weaning (at appropriate seasons) is not practiced. Sixth, the practice of castrating the biggest and fastest growing males for draught purposes tends to leave inferior sires for breeding. C. Present Livestock Performances 12. Present livestock performances are estimated as follows: - 165- ANNEX8 Appendix 1 Page 4 Weaning rate Mature weight Age of maturity Buffaloes 45% Females 450 kg 3 years Males 550 kg 3 1/2 years Cattle 55% Cows 290 kg 2 1/2 years Bulls 400 kg 3 years Native pigs 10 /a 100 kg 1 year 1.5 kg 8 months Native chicken 30 /b /a Piglets weaned per sow per year. /b Eggs collected per bird per year. D. Income from Livestock 13. The typical smallholding of the Northeast has 2.7 buffaloes and 12 chickens. The 1978 Agricultural Census indicates that 40% of the buffaloes were females of breeding age. This sets one mature female per holding and, at present rates of reproductive performance, one 3-year old animal can be sold every other year. 50% of all birds would be hens with an annual produc- tion of 180 eggs. The birds on hand would be slaughtered during a year's period at liveweights of 1.5 kg, replacement being procured from own brooding. 14. The value of the above livestock production on the typical Northeast farmholding is as follows: Annual production Unit price Value ------ Baht ------ Buffaloes 0.5 animals, sold at the 10.20/kg 2,550 age of three years with an average weight of 500 kg Poultry Eggs 180 eggs 0.90 162 Meat 18 kg 16.00 288 Total value of annual production 3,000 - 166 - ANNEX 8 Appendix I Page 5 15. About 25% of smallholdings in the Northeast have cattle. They keep an average 4.7 head, of which 50% are females of breeding age. The annual value of cattle production would be as follows: Annual prodluction Unit price Value …-- Baht ------ Cattle 1.3 animals, sold at the 11.80/kg 5,369 age of three years with an average we:ight of 350 kg 16. About 25% of all smallholdings in the Northeast also keep an average of 3.2 pigs which are raised to 100 kg market weight during a year period. The resulting value of annual production would be as follows: Annual production Unit price Value ----- Baht -----… Pigs 320 kg 18.80/kg 5,760 17. In all above cases, sma:Llholders would not incur extra cash outlays for the purchase of feeds or other inputs. They would, however, have been able to sell in the local market the rice bran which they received back from the village millers after the processing of their paddy. The value of these commodities for a farm family of six persons is estimated at B 620 per year./1 E. Emerging Problems and Development Prospects Availability of Grazing 18. Permanent grazing lands which allow cow-calf operations on off-farm (communal) forage resources are generally unsuitable for cropping since they consist largely of scrubland abandoned after periods of cultivation or open /1 Two tons of paddy per family per year, yielding 140 kg of fine bran ($2.84/kg) plus 100 kg of coarse bran ($1.25/kg). - 167 - ANNEX 8 Appendix 1 Page 6 forest areas abandoned after logging. Regularly used grazing areas are confined to a relatively short radius from the villages because work animals need to be kept near the farms and the danger of stock theft requires night housing. Decreasing Demand for Draft Animals 19. The sale of draft animals to farmers in and around the Central plains has been the major motive for cattle and buffalo raising in the Northeast. The demand for draft oxen is diminishing, and an increasing proportion of the animals raised in the Northeast is slaughtered soon after reaching maturity instead of being used for work prior to slaughter. Where- as in the past good quality draft animals fetched prices considerably above their current beef value, present farmgate prices for cattle and buffaloes are approximately at their slaughter value (the farmgate price of trained buffaloes, 3-4 years of age and weighing about 500 kg, varied between B 5,500 and B 6,000 in March 1981, their current slaughter value was about B 5,500 per head). It is expected that the demand for buffalo primarily for beef will be an even stronger determinant in the future. Production of Buffaloes versus Cattle 20. Although they are inferior to cattle in respect of reproductive performance, weight gain and consumer preference as beef (cattle prices are presently higher than buffalo by 10-15%), under typical smallholder conditions of increasingly limited feeding and forage opportunities, the buffalo is expected to have an edge over cattle in terms of preference for keeping on the farm. Buffaloes excel cattle in their ability to work wet paddies and to thrive on coarse roughage of high fiber content. Only if the nutrition problem is overcome will significant expansion of cattle production be feasible. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Livestock in Selected Northeast Provinces Buffaloes Cattle Pigs Poultry (chickens & ducks) Percentage Average Percentage Average Percentage Average Percentage Average of holdings no. per of holdings no. per of holdings no. per of holdings no. per reporting holding reporting holding reporting holding reporting holding Chalyapum 64 3.3 19 7.1 31 3.7 70 13 Buriram 77 3.1 10 6.3 44 2.7 97 12 Sisaket 79 2.5 21 3.5 29 2.8 86 12 Surin 82 2.7 18 4.1 52 2.3 98 14 Yasothon 85 2.2 32 3.4 13 3.7 91 9 Kalasin 76 3.2 23 3.9 14 3.8 71 10 X Khonkaen 76 3.2 25 4.9 17 4.1 76 12 Mahasarakam 84 2.8 30 4.1 24 3.1 95 10 Loei 48 3.4 19 4.3 22 3.0 70 12 Sakon Nakorn 79 3.3 32 5.3 18 3.1 74 12 Source: 1978 Agricultural Census. 1* ANNEX 8 - 169 - Appendix 2 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Work Program of Technical Divisions in the Livestock Development Department 1. The Veterinary Service Division (B 80 million in FY 1980/81, B 131 million requested for FY 1982) is responsible for the Department's provincial services. In February 1981, the Division had 1,748 approved positions in regional and provincial offices, of which 1,323 were filled. Most of the field staff's time is spent on vaccination against the endemic infectious diseases, but advice is also given on animal feeding and husbandry. All services are free of charge. Operating funds for the procurement of vaccines, and equipment for the safe storage of biologicals and for its transport to the villages are serious problems. Provincial staff are also operating 31 veterinary clinics where farmers can take their diseased animals for treatment. Further duties of the Division include the licensing of private veterinarians and the collection of fees for imported and exported animals. 2. During the next Five-Year Plan, the Division plans to get involved in schemes concerned with the distribution of pigs and poultry in poverty areas. The Division has distributed these animals in disaster-affected areas in the past. Adopting the example of "cattle and buffalo banks," under which draft animals have been donated to poor smallholders, livestock distribution would be stepped up as a measure to alleviate rural poverty. In 1982, a start would be made with the distribution of about 450 pigs, 10,000 day-old chicks and 10,000 ducklings in the areas earmarked for poverty alleviation during the Five-Year Plan. 3. The Division of Veterinary Biologicals (B 74 million in FY 1980/81, B 142 million requested for FY 1981/82) is responsible for the production of vaccines, sera and antigenes. Total staff consists of about 40 veteri- narians, 40 technicians and 250 laborers. The Division has two major facilities: the bacterial and viral vaccine production center at Pakchong and a center for the production of vaccines against foot-and-mouth disease at Nong Sarai. Both stations have received considerable external assistance in the past and are adequately equipped. However, equipment repair, supply of laboratory animals and water supply create problems. Current production and sales, and targets of vaccine production are listed in Table 5. LDD places high priority on disease control and about one third of the 1981 ANNEX 8 - 170 - Appendlx 2 Page 2 budget is allocated for this (Table 3). Additional vaccines needed by t-he commercial pig and poultry sectors are imported under licenses issued by the Ministry of Public Health. 4. During the next Five-Year Plan, the Division envisages an expansion of vaccine production to cover Thailand's need, qualitatively and quantita- tively, and to expand the existing laboratory facilities for vaccine quality control. 5. The Disease Control Division (B 37 million in FY 1981, B 210 miil- lion requested for FY 1982) is responsible for disease eradication, inspection of meat for export and quarantine services. It has a total staff of 457 professionals and technicians, of which about 70% are members of six mobile disease eradication teams. The mobile teams assist provincial staff in large-scale campaigns against rajor livestock diseases. They maintaiin a 50 km buffer zone along the northern borders in which cattle and buffaloes are vaccinated against rinderpest, Most of the remaining time is spent in combatting foot-and-mouth disease. The foot-and-mouth disease--free zone south of Bangkok had an outbreak of this disease during 1979/80 which irmpeded the export of live cattle and buffaloes. Consequently, about 50% of all mobile teams are now working there to restore the zone to its previous disease-free situation. The mobile teams are also called in to assist with vaccination against haemorrhagic septicaemia. Final decision on the use of mobile teams rests with the Director General. The inspection of meat for domestic consumption is under the Ministry of Public Health through veterinarians employed by municipalities. The Disease Control Division operates meat inspection in abattoirs from which meat is export-ed. This is presently restricted to two abattoirs for pigs and three for broilers. The Division also operates quarantine stations for imported and exported live animals and establishes quotas under which licensed merchants can exporlt certain numbers of live cattle and buffaloes. 6. The eradication of economically important livestock diseases is given high priority in the next Five-Year Plan and the Division plans a considerble expansion and intensif-ication of its work with mobile veterinary units. 7. The Veterinary Research Division (B 17 million in FY 1980/81, B 35 million requested for FY 1981/82) is responsible for disease sur- veillance and veterinary diagnostic services. It has a staff of 154 professionals and technicians, and work is conducted mainly at the national diagnostic laboratory at Bangkok. Regional centers in the South and Northeast are under development with bilateral assistance. The Division is also involved in research to improve the quality of locally produced vaccines. 8. During the next Five-Year Plan, the Division plans to improve its disease surveillance and diagnostic services. ANNEX 8 - 171 - Appendix 2 Page 3 9. The Animal Husbandry (Breeding) Division (B 125 million in FY 1980/81, B 185 million requested for FY 1981/82) is responsible for the Department's livestock stations, for cattle and buffalo distribution schemes, and for farmer training. The Division has a total staff of about 500 professionals and technicians and 1,000 laborers in 17 livestock breeding stations and 11.substations. All stations have the basic function of multiplying superior breeding stock for distribution to smallholder communities. Emphasis is on cattle and buffalo promotion, but most stations have also limited pig and poultry operations. Livestock stations were always intended to be centers of extension and farmer training, and this concept has been developed further under the World Bank-assisted Livestock Development Project. During 1980, the Division distributed about 100 Brahman and Brahman-crossbred bulls, and 700 buffalo bulls to villages under the loan-bull program. This scheme is part of the Department's national activities to improve the genetic properties of smallholders' livestock. Farmers' response has been favorable but a number of constraints have emerged. As charges for mating are generally low, there is insufficient incentive to become bull-keeper for the community, and as loan bulls are considered Government property, some of them are not maintained adequately. Some bulls are performing poorly and the Department was slow in replacing them. Insufficient use has also been made of developing the loan-bull program as a complement to artificial insemination by placing them in more remote areas. The loan-bull program has had considerable impact on cattle. However, the number of bulls is small relative to the number of cows to be served and consideration needs to be given to the placement and rotation of bulls available from the Department's stations, and of developing breeding herds in selected villages for the procurement of additional bulls. 10. During the Fifth Five-Year Plan, the Animal Husbandry Division intends to intensify the operations of livestock stations with particular emphasis on improving the feeding systems for large ruminants, to continue the loan bull program correcting its recognized weaknesses, and to initiate a "cattle and buffalo bank" program in poverty areas. Some of the cattle and buffaloes would be purchased from smallholders. 11. The Division of Artificial Insemination (B 27 million in FY 1980/81, B 51 million requested for FY 1981/82) is the Department's arm for the genetic improvement of farm mammals, with emphasis on the upgrading of cattle. It has 65 professionals and technicians working at three bull stations near Bangkok, Khon Kaen and Chiangmai. The Pathum Thani center, north of Bangkok, is fully equipped for frozen semen and concentrates on upgrading with dairy bulls; the center at Khon Kaen has a major role in upgrading with Brahman bulls. At present, 12 Holstein Friesian bulls are used for semen collection at Pathum Thani. Friesian semen is also imported. Six Brahman and 3 buffalo bulls are used for semen collection at Khon Kaen. Semen is distributed through about 120 inseminators workinig out of 41 AI stations and substations. In 1979, the total number of inseminations was 27,815 in cattle, two thirds being with semen from dairy bulls. ANNEX 8 -- 172 - Appendix 2 Page 4 The Division has also been providing AI for pigs since the early 1960s and for buffaloes since 1978; the number of inseminations in 1979 was 8,672 and 373, respectively. 12. AI services have expandecd at a moderate pace, and a number of problems persist. The cost per callf born from insemination is a[bout B 3,000 and too high relative to the impact on livestock production development. The major problems are high overhead costs, low number of inseminations and low conception rates. With minor amendments, the available bull centers have large semen production reserves; however, problems are encountered with farmer acceptance, semen distribution and insemination techniques. 13. The Division plans a large-scale expansion of AI for the Fifth Five- Year Plan. Major emphasis would be on the domestic generation of crossbred cattle suitable for dairying and, clependent on the projected rate of milk production expansion, between 100,000 and 200,000 inseminations would be required annually. 14. The Division of Animal Nutrition and Pasture Development (B 45 mil- lion in FY 1980/81, B 116 million requested for FY 1981/82) is responsible for research on the feeding value of agricultural by-products, aLnd for the multiplication and distribution of forage seeds. It has a total staff of 217 professionals and technicians and employs about 540 people as clerical staff and laborers. Nutritional research concentrates on the value of staple f-eed ingredients in smallholder livestock feeding systems, and leads to papers for distribution to provincial staff. The Division's pasture develcpment work is conducted at 15 forage stations in the Northeast, where tropical legumes and grasses are tested and forage seed and planting material is produced for free distribution to smallholders. Most of the seed is used for improving communal grazing, but the Division has little opportunity to assist livestock owners with the controlled use of r angelands after their improvement. Some research is also carried out to improve the productivity of grazing land under old stands of coconut. 15. The Division plans a considerable expansion of its pasture development work for the purpose of multiplying seed which can be used for increasing forage production on communal grazing lands and on individuall-y owned fallows. 16. The Feed Quality Control Division (B 4 million in FY 1980/81, B 12 million requested for FY 1981/81) is responsible for the Department's licencing and inspection services in respect of the private sector feed industry. It has a total staff of 27, of which 11 are inspectors. A partly equipped laboratory is available at the Department's headquarters site. The Division has licensed 35 feed mills with 1,500 authorized rations, 182 pro- ducers of fishmeal and various oil cakes, and 2,330 feed merchants. Under ANNEX 8 - 173 - Appendix 2 Page 5 its mandate of the 1963 feed quality control law, its inspectors take samples about fortnightly from feed mills, about thrice a year from ingredient producers and once per year from merchants. This would imply a total of about 35,000-40,000 samples per year. However, during 1980 only 600 samples could be analyzed and these analyses did not include investi- gations for minerals, micro-elements or toxic substances. Results are available one month after sampling, and reclamations (almost exclusively in respect of ingredient producers) were found in about 50% of the samples. The system of admonition is protracted and rather meaningless leading to minor fines only. 17. The Division plans an expansion of its services particularly of its laboratory capacity. 18. The Division of Livestock Extension was established during 1980. It is not yet functional, and an agreement has still to be reached on a number of policy issues concerning the future development of livestock extension services in Thailand. There seems to be agreement that the field staff of the Ministry's Department of Agricultural Extension will take responsibility for livestock extension through its multipurpose village level extension agents and that the Department of Livestock Services would guide these agents through subject matter specialists. The outstanding issues relate to future responsibility for specialized services for DLD, such as disease surveil- lance, vaccination campaigns, veterinary assistance to livestock owners or artificial insemination, which will have to remain services of the public sector but which cannot be conducted by a general agricultural extension service. The Department will, therefore, also in future need a certain degree of regular field presence, probably through its provincial staff, and decisions are required on how to reinforce provincial services through national or regional task forces, and in which sectors this should be done. 1- - ANNEX 8 Appendix 3 THAILAND Page 1 AGRICULTURAL PROGRAM AND POLICY PRIORITIES Government Regulations Affecting the Livestock and Commercial Feed Industry 1. (a) Production/Slaughter (i) Since 1959, minimum age for slaughter of cattle and buffaloes is prescribed by regulations (which vary in different areas). In general, the slaughter of cattle and buffalo males under the age of eight and females under the age of fifteen are prohibited (the females may be exempted only if certified by the government veterinarian to be sterile, maimed or diseased). The main purpose is to ensure the availability of draft stock. (ii) All bovines crossing provincial boundaries must be accompanied by veterinary permits. (iii) Animals can be slaughtered only in abattoirs operated by municipalities or by persons/parties authorized by municipalities. Privately operated slaughterhouses obtain authorization only if they are intended for the export of certain meats (Animal Trade Control Act, 1960). (iv) The Ministry of Public Health is responsible for meat inspection for doTnestic consumption. Inspection of meat for export and quarantine services for live an:Lmal export is under the control of the Department of Livestock Services. (b) Marketing and Pricing (i) Carcasses and meat cannot be transported into the area of Bangkok and Thonburi (animal Trade Control Act, 1960), and subsequent acts prohibited their interprovincial transport. These regulations were revoked in August 1980 but uncertainty exists as to the permanence of the counterorder. ANNEX 8 - 175 - Appendix 3 Page 2 (ii) Feed and meat prices /1 are controlled (Anti-Profiteering Act, 1974). The Internal Trade Department, Ministry of Commerce, calculates production costs on a routine basis and submits its recommendations to a Central Committee for price announcement. Also, feed ingredients are subjected to this control system. In practice, retail prices of meat do not follow the price regulations but there is much closer enforcement for feeds./2 (c) Exports and Imports (i) Export quotas of live animals are established annually by the Department of Livestock Services. In order to become eligible as licensed exporters, merchants have to operate livestock farms or ranches with at least 100 mature females for breeding in order to be entitled to the export of 30 castrates per month. (ii) Export of mixed feeds was prohibited in 1973 (Decree of Export Control on some Merchandises). Since 1975, export permission is issued again, on request, if exports do not affect domestic availability and prices of concentrate feeds. Rice bran and rice bran residues (from oil processing) are prohibited from being exported. Similarly the export of soybean residues cannot exceed 20% of production. (iii) The Livestock Development Department issues licenses for the import of breeding stock and livestock semen. (d) Other (i) The Livestock Development Department, authorized by the Act of Animal Feed Control of 1963, issues licenses for feed mills, feed ingredient producers, merchants and for ready-mixed livestock rations. The proportions of nutrients and other properties of various concentrate feeds are also fixed by DLD. DLD is required to undertake random samplings of feed to ensure quality of feeds but there is no enforcement authority. /1 In the case of pork, retail and wholesale prices are now controlled under Anti Monopoly Price Setting Act of 1979. /2 In March 1981, for example, the retail price for pork was fixed at B 35/kg, but the actual retail price was about B 53-55/kg. ANNEX 8 - 176 - Appendix 3 Page 3 (ii) A number of commercial livestock operations, like feed mills, hatcheries, export slaughterhouses, etc., qualify for promotional privileges under the investment promotion program of the Board of Investment. The most important incentive in this Act is that promoted firms are exempted from income tax for 3-8 years and from import tax on essential equipment and operating ingredients. (iii) A regulation of the Ministry of Public Health stipulates that only Government authorities can handle disease causing agents needed for the production of biologicals. Import licenses for biologicals are issued by the same Ministry. ANNEX 8 - 177 - Appendix 4 Page 1 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Bibliography 1. Agricultural Sector Survey (four volumes), World Bank, 1972. 2. Northeast Thailand preparation mission, Mancha Khiri, Dryland Farming Pilot Project, FAO, 1970. 3. Thailand - Appraisal of the Livestock Development Project, Report No. 800-TH, World Bank, 1975. 4. Bank for Agriculture and Agricultural Cooperatives, Annual Report, Various Issues. 5. Thailand/New Zealand/World Bank, Joint Livestock Sector Review - Cattle and Buffalo, World Bank, January 1980. 6. The Dairy Industry of Thailand, A Report by the New Zealand Dairying Development Mission to Thailand, 1979. 7. Dairy Development Plan for Thailand, New Zealand Embassy, 1980/81, Internal document, not printed. 8. The Cattle Production Acceleration and Development Project, Government Proposal, 1980. 9. Marketing, Prices of Young Chickens, and the Future of Small Independent Breeders, N. Pmapongsakorh, August 1980, Thammasat University. 10. The Livestock Trading Corporation: Role and Evaluation, R. Thanapornpar, 1980, Thammasat University. 11. The Animal Feed Industry in Thailand. N. Pon Poapongsatorn, Seminar on ASEAN Comparative Study of the Development of Labor Intensive Industry, 1980. 12. Vaccine Production Project - Department of Livestock Development, 1980. 13. Artificial Insemination and Breeding Development Program. Report, Review of and Plans for Artificial Insemination, Recording and Breeding of Dairy Cattle, FAO, June 1980. 14. The Livestock and Meat Products Sector, UNDP/World Bank Technical Assistance Services to the Thai Board of Investments, Vallentine Laurie and Davies Pty Ltd., 1981. 15. Thailand - The Economics of Dairying, FAO/World Bank, Cooperative Program, Report No. 14/82-THA 26, March 29, 1982. - 178 - ANNEX 8 Appendix 4 Page 2 budget is allocated for this (Table 3). Additional vaccines needed by the commercial pig and poultry sectors are imported under licenses issued by the Ministry of Public Health. 4. During the next Five-Year Plan, the Division envisages an expansion of vaccine production to cover Thailand's need, qualitatively and quantita- tively, and to expand the existing laboratory facilities for vaccine quality control. 5. The Disease Control Division (B 37 million in FY 1981, B 210 mil- lion requested for FY 1982) is responsible for disease eradication, inspection of meat for export and quarantine services. It has a total staff of 457 professionals and technicians, of which about 70% are members of six mobile disease eradication teams. T'he mobile teams assist provincial staf'f in large-scale campaigns against major livestock diseases. They maintain a 50 km buffer zone along the northerrn borders in which cattle and buffaloes are vaccinated against rinderpest. Most of the remaining time is spent in combatting foot-and-mouth disease. The foot-and-mouth disease-free zone south of Bangkok had an outbreak of this disease during 1979/80 which impeded the export of live cattle and buffaloes. Consequently, about 50% of all mobile teams are now working thetre to restore the zone to its previous disease-free situation. The mobile teams are also called in to assist with vaccination against haemorrhagic serpticaemia. Final decision on the use of mobile teams rests with the Director General. The inspection cf meat for domestic consumption is under the Ministry of Public Health through veterinarians employed by municipalities. The Disease Control Division operates meat inspection in abattoirs from which meat is exported. This is presently restricted to two abattoirs for pigs and three for broilers. The Division also operates quarantine stations for imported and exported live animals and establishes quotas under which licensed merchants can export certain numbers of live cattle and buffaloes. 6. The eradication of economically important livestock diseases is given high priority in the next Five-Year Plan and the Division plans a considerble expansion and intensification of its work with mobile veterinary units. 7. The Veterinary Research Division (B 17 million in FY 1980/81, B 35 million requested for FY 1981/82) is responsible for disease sur- veillance and veterinary diagnostic services. It has a staff of 154 professionals and technicians, and work is conducted mainly at the national diagnostic laboratory at Bangkok. Regional centers in the South and Northeast are under development with bilateral assistance. T'he Division is also involved in research to improve the quality of locally produced vaccines. 8. During the next Five-Year Plan, the Division plans to improve its disease surveillance and diagnostic services. - 179 - ANNEX 8 Appendix 4 Page 3 9. The Animal Husbandry Division (B 125 million in FY 1980/81, B 185 million requested for FY 1981/82) is responsible for the Department's livestock stations, for cattle and buffalo distribution schemes, and for farmer training. The Division has a total staff of about 500 professionals and technicians and 1,000 laborers in 17 livestock breeding stations and 11 substations. All stations have the basic function of multiplying superior breeding stock for distribution to smallholder communities. Emphasis is on cattle and buffalo promotion, but most stations have also limited pig and poultry operations. Livestock stations were always intended to be centers of extension and farmer training, and this concept has been developed further under the World Bank-assisted Livestock Development Project. During 1980, the Division distributed about 100 Brahman and Brahman-crossbred bulls, and 700 buffalo bulls to villages under the loan-bull program. This scheme is part of the Department's national activities to improve the genetic properties of smallholders' livestock. Farmers' response has been favorable but a number of constraints have emerged. As charges for mating are generally low, there is insufficient incentive to become bull-keeper for the community, and as loan bulls are considered Government property, some of them are not maintained adequately. Some bulls are performing poorly and the Department was slow in replacing them. Insufficient use has also been made of developing the loan-bull program as a complement to artificial insemination by placing them in more remote areas. The loan-bull program has had considerable impact on cattle. However, the number of bulls is small relative to the number of cows to be served and consideration needs to be given to the placement and rotation of bulls available from the Department's stations, and of developing breeding herds in selected villages for the procurement of additional bulls. 10. During the Fifth Five-Year Plan, the Animal Husbandry Division intends to intensify the operations of livestock stations with particular emphasis on improving the feeding systems for large ruminants, to continue the loan bull program correcting its recognized weaknesses, and to initiate a "cattle and buffalo bank" program in poverty areas. Some of the cattle and buffaloes would be purchased from smallholders. 11. The Division of Artificial Insemination (B 27 million in FY 1980/81, B 51 million requested for FY 1981/82) is the Department's arm for the genetic improvement of farm mammals, with emphasis on the upgrading of cattle. It has 65 professionals and technicians working at three bull stations near Bangkok, Khon Kaen and Chiangmai. The Pathum Thani center, north of Bangkok, is fully equipped for frozen semen and concentrates on upgrading with dairy bulls; the center at Khon Kaen has a major role in upgrading with Brahman bulls. At present, 12 Holstein Friesian bulls are used for semen collection at Pathum Thani. Friesian semen is also imported. Six Brahman and 3 buffalo bulls are used for semen collection at Khon Kaen. Semen is distributed through about 120 inseminators working out of 41 AI stations and substations. In 1979, the total number of inseminations was 27,815 in cattle, two thirds being with semen from dairy bulls. ANNEX 8 - 180 - Appendix 4 Page 4 The Division has also been providing AI for pigs since the early 1960s and for buffaloes since 1978; the number of inseminations in 1979 was 8,672 and 373, respectively. 12. Al services have expanded at a moderate pace, and a number of problems persist. The cost per ca:Lf born from insemination is about B 3,000 and too high relative to the impact on livestock production development. The major problems are high overhead costs, low number of insemiinations and low conception rates. With minor amendments, the available bulL centers have large semen production reserves; however, problems are encountered with farmer acceptance, semen distribution and insemination techniques. 13. The Division plans a large-scale expansion of AI for lhe Fifth Five- Year Plan. Major emphasis would be on the domestic generation of crossbred cattle suitable for dairying and, dependent on the projected rate of milk production expansion, between 100,000 and 200,000 inseminations would be required annually. 14. The Division of Animal Nutrition and Pasture Development (B 45 mil- lion in FY 1980/81, B 116 million requested for FY 1981/82) is responsible for research on the feeding value of agricultural by-products, and for the multiplication and distribution of forage seeds. It has a total staff of 217 professionals and technicians and employs about 540 people as c:Lerical staff and laborers. Nutritional research concentrates on the value of staple feed ingredients in smallholder livestock feeding systems, and leads to papers for distribution to provincial staff. The Division's pasture development work is conducted at 15 forage stations in the Northeast, where tropical' legumes and grasses are tested and forage seed and planting material is produced for free distribution to smallholders. Mosi: of the seed is used for improving communal grazing, but the Division has little opportunity to assist livestock owners with the controlled use of rangelands after their improvement. Some research is also carried out to improve the productivity of grazing land under old stands of coconut. 15. The Division plans a considerable expansion of its pasture development work for the purpose of multiplying seed which can be used for increasing forage production on communal grazing lands and on individually owned fallows. 16. The Feed Quality Control Division (B 4 million in FY 1980/81, B 12 million requested for FY 1981/81) is responsible for the Department's licencing and inspection services in respect of the private sector feed industry. It has a total staff of 27, of which 11 are inspectors. A partly equipped laboratory is available at the Department's headquarters site. The Division has licensed 35 feed mills with 1,500 authorized rations, 182 pro- ducers of fishmeal and various oil cakes, and 2,330 feed merchants. Under - 181 - ANNEX 8 Appendix 4 Page 5 its mandate of the 1963 feed quality control law, its inspectors take samples about fortnightly from feed mills, about thrice a year from ingredient producers and once per year from merchants. This would imply a total of about 35,000-40,000 samples per year. However, during 1980 only 600 samples could be analyzed and these analyses did not include investi- gations for minerals, micro-elements or toxic substances. Results are available one month after sampling, and reclamations (almost exclusively in respect of ingredient producers) were found in about 50% of the samples. The system of admonition is protracted and rather meaningless leading to minor fines only. 17. The Division plans an expansion of its services, particularly of its laboratory capacity. 18. The Division of Livestock Extension was established during 1980. It is not yet functional, and an agreement has still to be reached on a number of policy issues concerning the future development of livestock extension services in Thailand. There seems to be agreement that the field staff of the Ministry's Department of Agricultural Extension will take responsibility for livestock extension through its multipurpose village level extension agents and that the Department of Livestock Services would guide these agents through subject matter specialists. The outstanding issues relate to future responsibility for specialized services for DLD, such as disease surveil- lance, vaccination campaigns, veterinary assistance to livestock owners or artificial insemination, which will have to remain services of the public sector but which cannot be conducted by a general agricultural extension service. The Department will, therefore, also in future need a certain degree of regular field presence, probably through its provincial staff, and decisions are required on how to reinforce provincial services through national or regional task forces, and in which sectors this should be done. ANNEX 8 Appendix 5 - 182 - Page L THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Government Regulations Affecting the Livestock and Commercial Feed Industry 1. (a) Production/Slaughter (i) Since 1959, mininium age for slaughter of cattle and buffaloes is prescribed by regulations (which vary in different areas). In general, the slaughter cf cattle and buffalo males under the age of eight and females under the age of fifteen are prohibited (the females may be exempted only if certified by the government veterinarian to be sterile, maimed or diseased). The main purpose is to ensure the availability of draft stock. (ii) All bovines crossing provincial boundaries must be accompanied by veterinary permits. (iii) Animals can be slaughtered only in abattoirs operated by municipalities or by persons/parties authorized by municipalities. Privately operated slaughterhouses obtain authorization only if they are intended for the export of certain meats (Animal Trade Control Act, 1960). (iv) The Ministry of Public Health is responsible for meat inspection for domestic consumption. Inspection of meat for export and quarantine services for live animal export is under the control of the Department of Livestock Services. (b) Marketing and Pricing (i) Carcasses and meat cannot be transported into the area of Bangkok and Thonburi (animal Trade Control Act, 1960), and subsequent acts prohibited their interprovincial transport. These regulations were revoked in August 1980 but uncertainty exists as to the permanence of the counterorder. - 183 - ANNEX 8 Appendix 5 page 2 (ii) Feed and meat prices /1 are controlled (Anti-Profiteering Act, 1974). The Internal Trade Department, Ministry of Commerce, calculates production costs on a routine basis and submits its recommendations to a Central Committee for price announcement. Also, feed ingredients are subjected to this control system. In practice, retail prices of meat do not follow the price regulations but there is much closer enforcement for feeds./2 (c) Exports and Imports (i) Export quotas of live animals are established annually by the Department of Livestock Services. In order to become eligible as licensed exporters, merchants have to operate livestock farms or ranches with at least 100 mature females for breeding in order to be entitled to the export of 30 castrates per month. (ii) Export of mixed feeds was prohibited in 1973 (Decree of Export Control on some Merchandises). Since 1975, export permission is issued again, on request, if exports do not affect domestic availability and prices of concentrate feeds. Rice bran and rice bran residues (from oil processing) are prohibited from being exported. Similarly the export of soybean residues cannot exceed 20% of production. (iii) The Livestock Development Department issues licenses for the import of breeding stock and livestock semen. (d) Other (i) The Livestock Development Department, authorized by the Act of Animal Feed Control of 1963, issues licenses for feed mills, feed ingredient producers, merchants and for ready-mixed livestock rations. The proportions of nutrients and other properties of various concentrate feeds are also fixed by DLD. DLD is required to undertake random samplings of feed to ensure quality of feeds but there is no enforcement authority. /1 In the case of pork, retail and wholesale prices are now controlled under Anti Monopoly Price Setting Act of 1979. /2 In March 1981, for example, the retail price for pork was fixed at B 35/kg, but the actual retail price was about B 53-55/kg. ANNEX 8 - 184 - Appendix 5 Page 3 (ii) A number of commercial livestock operations, like feed mills, hatcheries, export slaughterhouses, elc., qualify for promotional privileges under the investmtent promotion program of the Board of Investment. The most important incentive in this Act is that promoted firms are exempted from income tax for 3-8 years and from importL tax on essential equipiment and operating ingredients. (iii) A regulation of the Ministry of Public Health stipulates that only Government authorities can handle disease causing agents needed for the production of biologic.als. Import licenses for biologicals are issued by the same Ministry. - 185 - ANNEX 9 THAILAND PROGRAM AND POLICY PRIORITIES FOR AN AGRICULTURAL ECONOMY IN TRANSITION Statistical Annex Table of Contents Table No. Page No, SECTION I - GROSS DOMESTIC PRODUCT 1.01 Agricultural GDP (1960-80) at Current and Constant Price 187 1.02 Gross Regional Agricultural Product in Current Baht 188 1.03 Gross Regional Agricultural Product in Constant Baht 189 1.04 Gross Domestic Product Originating From Crops at 1972 Market Prices 190 SECTION II - PRODUCTION, AREA AND YIELDS Note on Crop Production Statistics 191 2.01 Area Planted, Yield and Production of Major Crops, 1959-75, Whole Kingdom 192 2.02 Area Planted, Yield and Production of Major Crops, 1959-75, Central Region 193 2.03 Area Planted, Yield and Production of Major Crops, 1959-75, Northern Region 194 2.04 Area Planted, Yield and Production of Major Crops, 1959-75, Northeastern Region 195 2.05 Area Planted, Yield and Production of Major Crops, 1959-75, Southern Region 196 2.06 Area Planted, Yield and Production of Major Crops, 1972-80, Kingdom 197 2.07 Area Planted, Yield and Production of Major Crops, 1972-80, Central 198 2.08 Area Planted, Yield and Production of Major Crops, 1972-80, North 199 2.09 Area Planted, Yield and Production of Major Crops, 1972-80, Northeast 200 2.10 Area Planted, Yield and Production of Major Crops, 1972-80, South 201 2.11 Paddy and Rice Supply and Utilization, 1967-80 by Glutinuous and Nonglutinous Varieties 202 SECTION III - INPUT USE 3.01 Fertilizer Use, By Crop and By Region 203 3.02 Apparent Fertilizer Consumption, 1966-78 204 3.03 Value of Insecticides Used for Crop Production in Thailand 205 3.04 Imports and Domestic Production of Agricultural Machinery 206 - 186 - Table No. Page No. SECTION IV - TRADE 4.01 Principal Merchandise Exports 207 4.02 Principal Merchandise Exports by Countries 208 4.03 Minor Agricultural Exports, Average 1966-68, 1974-80 209 4.04 Volume of Rice Exports by Grades, 1965-80 210 4.05 Rice Export Premium 211 4.06 Cattle and Buffalo Exports 212 4.07 Cotton*- Imports and Exports, 1960-80 2:13 4.08 Vegetable Oil Imports and Exports, 1957-80 214 SECT-ION V - PRICES 5.01 Consumer Price Index for Whole Kingdom 215 5.02 Consumer Price Indices by Region 216 5.03 Price Indices (Annual) 217 5.04 Average Whole Prices (Bangkok) of Selected Agricultural Commodities, 1960-80 218 5.05 Average Wholesale Prices of Livestock and Livestock Products, Bangkok, 1960-80 219 5.06 Average Wholesale Prices of Fish, Bangkok, 1971-81 220 5.07 Development of Producer Prices of Major Commodities in Thailand, 1967-81 2:21 5.08 Fertilizer Nutrient Prices 2:22 SECTION VI - LAND USE 6.01 Land Utilization, Whole Kingdom, 1959-80 223 6.02 Land Utilization, Central Region, 1959-80 224 6.03 Land Utilization, Northern Region, 1959-80 225 6.04 Land Utilization, Northeast Region, 1959-80 226 6.05 Land Utilization, Southern Region, 1959-80 227 6.06 Forest Encroachment and Suitability for Agriculture 228 6.07 Forest Areas and Encroachment by Types of Forest, 1972, 79/80 229 6.08 Thailand: Land Use, by Regions 230 6.09 Total Area under Holdings, Number of Holdings and Average Size of Holdings, 1963 and 1978 231 SECTION VII - MISCELLANEOUS 7.01 Population 232 7.02 Employment Estimates 233 7.03 Average Annual Income by Source - Village Households (1975) 234 THAILANI) AGRICULTURAL PROGRAM AND POLICY PRI(RITIES Agricultural GDP (1960-80) at Current and Constant Price (Billions of baht) 196rJ 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980/b ---- (at 1962 conistant price) ---------------- -----…--------- (at l972 constant price) -------- … A. At constant market prices Crops 15.9 16.3 17.7 19.3 19.1 19.6 23.1 21.0 22.9 24.5 35.5 37..0 36.0 41.7 41.8 45.6 49.0 46.8 53.6 51.8 53.9 ~ Livestock 2.9 3.0 3.1 3.2 3.3 3.3 3.5 3.8 3.8 4.0 5.0 5.6 5.9 6.3 6.7 7.4 7.6 8.1 8.5 8.9 9.7 09 Fisheries 0.7 0.8 1.0 1.2 1.5 1.7 2.0 2.6 3.4 4.0 5.0 5.D 5.2 5.4 5.3 5.7 5.9 7.5 7.4 7.3 6.8 Forestry 1.9 1.9 1.9 2.1 2.2 2.5 2.3 2.4 2.8 2.7 2.8 3.0 2.9 2.9 3.2 3.3 3.4 3.1 3.( 3.4 3.4 Total Agriculture /a 21.4 22.1 23.7 25.8 26.1 27.1 30.8 29.9 32.8 35.3 48.3 50.5 49.9 56.2 57.0 62.1 65.9 65.5 72.5 71.4 73.8 B. At current mnarket prices Crops 15.7 17.2 17.7 18.u 17.9 21.6 28.8 24.8 25.0 28.2 26.8 28.1 36.0 56.4 62.2 69.7 77.5 79.1 96.2 108.0 128.5 Livestock 3.0 3.1) 3.1 3.2 3.4 3.7 3.9 4.5 5.2 5.3 4.8 5.5 5.9 6.3 10.6 11.5 12.3 14.4 13.5 17.0 23.5 Fisheries 1.0 1.0 1.0 1.2 1.6 1.6 2.( 2.6 3.3 3.9 4.1 4.5 5.2 7.0 7.3 8.4 9.8 12.5 13.1 13.0 13.7 Forestry 1.8 2.( 1.9 2.1 2.2 2.5 2.4 2.7 3.1 2.9 2.8 2.7 2.9 3.5 4.6 4.5 5.1 5.1 6.3 9.1 10.6 Total Agriculture /a 21.5 23.1 23.7 24.6 25.0 29.4 37.(J 34.6 36.6 40.3 38.5 40.8 49.9 73.2 84.7 94.1 104.7 111.() 129.1 147.1 176.3 /a Due to rounding, totdls may not add up. F- /b Estimate. o Source: NESI)K. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Gross Regional Agricultural Product in Current Baht (Million) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980/b Central Region /a Agriculture 11,917 13,236 16,850 26,026 29,814 30,420 35,904 39,306 44,268 47,303 57,571 Crops 7,427 8,914 11,966 20,219 22,145 21,740 26,686 26,979 31,001 31,496 42,108 Livestock 1,440 1,452 1,483 1,942 3,357 3,300 3,506 4,837 4,637 5,677 7,192 Fisheries 1,975 2,045 2,498 3,170 3,348 4,532 4,381 6,563 7,247 6,874 6,335 Forestry 1,075 825 903 695 964 848 899 927 1,383 3,256 1,936 North Region Agriculture 9,418 10,535 13,223 16,008 20,219 25,208 26,703 25,678 31,650 35,670 40,534 Crops 7,410 7,984 10,778 13,019 15,722 20,738 21,640 20,433 26,531 29,115 32,858 X Livestock 1,038 1,376 1,495 1,447 2,516 2,683 2,966 3,778 3,271 4,132 5,367 Fisheries 134 192 85 189 302 411 373 398 482 384 452 Forestry 836 983 865 1,353 1,679 1,376 1,724 1,069 1,366 2,039 1,857 Northeast Region Agriculture 9,809 9,984 10,808 17,720 20,740 24,271 23,931 24,269 29,091 35,848 42,398 Crops 7,415 7,448 8,037 14,317 15,522 18,469 17,444 18,190 23,603 28,743 33,961 Livestock 1,592 1,833 1,966 2,145 3,443 3,882 4,397 4,148 3,871 5,082 6,482 Fisheries 251 246 369 671 910 1,126 865 568 842 920 1,083 Forestry 551 457 436 587 865 794 1,225 1,363 775 1,103 872 South Region Agriculture 6,912 6,631 8,598 12,345 12,706 13,590 17,430 20,704 23,289 27,133 32,000 Crops 4,344 3,550 4,969 7,765 7,604 8,171 11,078 12,589 14,314 17,607 20,265 Livestock 519 602 709 735 1,249 1,586 1,459 1,619 1,700 2,028 2,633 Fisheries 1,711 2,005 2,253 2,943 2,711 2,381 3,739 4,860 4,474 4,771 4,034 Forestry 338 474 667 902 1,142 1,452 1,154 1,636 2,801 2,727 5,068 In Fxaxiuding Bangkok. (f 7b Estimate. Source: NESDB. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Gross Regional Agricultural Product in Constant Baht (Millions, in 1972 prices) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980/b Central Region /a Agriculture 10,947 11,694 12,154 19,632 19,840 20,642 23,324 24,236 26,568 23,605 24,264 Crops 6,677 7,518 7,615 14,642 14,397 14,618 17,122 16,467 18,537 15,319 17,129 Livestock 1,213 1,240 1,286 1,960 2,168 2,104 2,211 2,577 2,937 2,837 2,838 Fisheries 2,064 2,119 2,439 2,399 2,589 3,330 3,282 4,479 4,376 4,124 3,543 Forestry 993 817 814 631 686 590 709 713 718 1,325 754 North Region Agriculture 8,799 9,144 8,328 12,301 13,251 15,174 15,591 14,285 16,635 16,687 16,138 Crops 7,004 6,809 6,257 9,687 10,473 12,371 12,607 11,340 13,818 13,635 13,217 Livestock 874 1,164 1,237 1,445 1,538 1,642 1,698 2,159 2,066 2,191 2,231 Fisheries 140 196 83 170 234 268 212 192 194 150 163 Forestry 781 975 751 999 1,006 893 1,074 594 557 711 527 Northeast Region Agriculture 9,193 9,470 9,006 14,421 14,544 16,269 16,259 15,017 17,057 18,533 19,493 Crops 7,156 7,347 6,711 11,233 11,086 12,499 12,303 11,468 13,963 15,017 16,015 Livestock 1,262 1,430 1,542 2,134 2,179 2,521 2,672 2,457 2,416 2,779 2,802 Fisheries 247 233 357 629 749 734 492 273 340 360 391 Forestry 528 460 396 425 530 515 792 819 338 377 285 South Region Agriculture 6,872 7,497 8,036 8,890 8,244 9,588 10,266 11,436 11,810 12,030 12,340 Crops 4,211 4,449 4,765 5,178 4,726 5,761 6,540 7,006 6,852 7,324 7,318 Livestock 459 508 538 730 801 1,095 1,025 891 1,083 1,107 1,120 Fisheries 1,876 2,051 2,110 2,160 1,722 1,399 1,911 2,523 2,487 2,620 2,150 Forestry 326 489 623 822 995 1,333 790 1,016 1,388 979 1,752 /a Excluding Bangkok. /b Estimate. Source: NESDB. o - 19Q - ANNEX 9 Table 1.04 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Gross Domestic Product Originating From Crops at 1972 Market Prices GDP (in million baht) Annual change (in %) 1976 1977 1978 1979 1980 1976/77 1977/78 1978/79 1979/80 Paddy 19,508 18,181 21,362 21,614 20,952 -6.8 17.5 1.2 -1.5 Rubber 1,779 1,940 2,128 2,497 2,208 9.1 9.7 17.3 7.5 Coconut 274 237 260 312 362 -13.5 9.7 20.0 14.1 Sugarcane 4,104 2,768 3,150 1,883 2,956 -32.6 13.8 -40.2 39.0 Maize I Sorghum } 2,690 1,719 2,871 2,944 3,088 -50.7 134.4 -8.3 10.8 Groundnut 523 353 431 583 342 -32.5 22.1 35.3 7.5 Mung bean 503 524 665 613 633 4.2 26.9 -7.8 1.5 Castor bean 65 52 62 59 79 -20.0 19.2 -4.8 13.6 Soy bean 585 490 817 896 241 16.2 66.7 9.7 0.2 Cassava 3,587 4,368 5,327 3,915 5,825 21.8 22.0 -26.5 26.2 Tobacco 1,662 1,580 1,684 1,720 1,743 4.9 6.6 2.1 3.7 Cotton 207 400 328 650 853 93.2 -1L8.0 98.2 14.9 Kenaf } Jute } 492 655 923 633 603 1(03.0 -22.2 2.2 Kapok 216 199 137 128 156 -7.9 -31.2 -6.6 2.3 Sesame 93 178 210 201 151 91.4 18.0 -4.3 -63.8 Garlic } Onion } 996 1,314 1,180 1,003 2,433 -47.0 -27.2 12.4 Shallot } Bell pepper 827 783 788 718 - -5.3 0.6 -8.9 1.4 Bird pepper 1,051 799 725 761 - -24.0 --9.3 5.0 5.1 Vegetables 1,675 1,752 1,761 1,746 1,784 4.6 0.5 -0.9 12.5 Fruits 7,892 8,160 8,445 8,589 9,394 3.4 3.5 1.7 4.1 Other crops 284 302 329 339 386 6.3 8.9 3.0 8.3 Total Crops 49,013 46,794 53,583 51,804 54,179 -4.5 14.5 -3.3 4.7 Source: NESDB. - 191 - ANNEX 9 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Note on Crop Production Statistics Agricultural data on crop production, area planted, and yield levels in Thailand are available in the form of two series from the Ministry of Agriculture and Cooperatives, one running from 1959-75 (originating from the Department of Agricultural Extension, DOAE), and the other from 1969 onwards (originating from the Office of Agricultural Economics, OAE). A comparison of the two series in the overlapping period, 1969-75, indicates significant divergencies for the levels of crop production, area planted and yields. The differences may be summarized as follows: (a) for maize, sorghum, cassava, kenaf and sugarcane: production tend to be lower in the DOAE series, but area planted levels tend to be higher in the DOAE series; (b) for other crops (primarily cotton, groundnuts, soybeans, mungbeans, and castorbeans): production, yield and area planted levels tend to be higher in the DOAE series. In view of the above differences, the construction of a single series running from 1959-1980 by combining the above two sources is not advisable. The method advocated for analysis is that for the period 1959-75, DOAE figures should be used; for the period 1975-current, OAE figures should be used. However, to obtain a longer continuous series for the 1970s, OAE data from 1972 can also be used since only then did OAE have their own surveys operating, and year-to-year changes in the overlapping years after 1972 are not critical. It should be noted that tree crop data (rubber and coconut) are not very reliable. THAILAND AGRICULTURAL PROGRAMI AND POLICY PRIORITIES Area Planted, Yield and Production of Mlajor Crops, 1959-75, Whole Kingdom 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 area Planted (000 rai) Paddy 37,906 37,013 38,619 41,168 41,229 40,872 40,961 46,454 41,612 45,173 47,400 46,840 47,043 44,620 49,736 47,821 53,244 Rubber 2,931 3,006 3,081 3,450 3,400 3,625 3,675 3,638 3,844 3,844 4,644 5,075 5,769 5,844 6,125 6,206 6,206 I1aize 1,249 1,785 1,916 2,050 2,612 3,449 3,605 4,084 4,651 4,763 4,799 4,824 6,640 6,819 7,526 7,929 10,176 Sorghum - - - - - 13 196 359 415 200 225 254 523 359 555 1,262 1,452 Kenaf 278 877 1,720 712 957 1,365 2,401 3,314 2,468 1,585 1,931 2,777 2,236 2,893 3,635 2,964 2,363 Cass-va 391 447 621 767 875 656 637 814 881 1,067 1,042 1,01( 1,314 1,923 3,235 3,899 4,657 Sugarcane 925 986 776 636 932 1,014 883 778 936 1,137 877 917 1,035 1,311 1,878 2,080 2,995 Tobacco (Virginia) 113 113 100 94 94 106 100 106 125 138 138 156 200 206 263 288 294 Coconut 838 1,031 1,156 1,325 1,400 1,400 1,550 1,544 1,700 1,788 1,856 1,969 2,025 2,113 2,206 2,300 2,406 Cotton 300 347 358 371 456 419 471 523 703 1,000 726 496 583 830 264 281 248 Crouiidnuts 624 736 521 544 520 546 621 983 673 741 826 797 818 918 1,011 1,021 1,072 Soybeans 137 139 149 174 210 213 117 285 399 329 450 467 724 985 1,136 1,102 1,365 Hunqg beanis 289 327 229 310 630 632 753 840 830 1,250 1,297 1,543 1,471 1,907 1,687 1,933 1,617 Castor beans 176 197 229 289 282 242 225 271 157 240 186 148 135 129 159 210 231 Yield (kg/rai) Paddy 223 256 256 267 281 254 268 257 231 229 283 290 292 262 276 260 265 Rubber 55 57 60 57 58 58 59 60 57 67 61 57 55 58 60 62 56 1 tiaize 254 305 312 325 328 271 283 275 261 280 303 289 300 182 275 266 288 Sorghum - - - - - 586 376 317 331 284 276 183 278 283 252 198 214 Kenaf 181 207 197 188 221 222 220 200 200 200 211 211 197 206 189 185 192 Cassava 2,773 2,734 2,780 2,708 2,413 2,375 2,314 2,323 2,343 2,449 2,374 2,409 2,796 2,307 2,402 2,437 2,500 Sugarcane 5,417 5,457 5,134 4,959 5,079 5,003 5,071 4,921 4,837 5,169 5,563 6,129 5,719 6,647 7,547 7,605 7,430 Tobacco (Virginia) 71 80 90 117 128 123 120 132 136 116 145 141 130 117 118 128 146 Coconut (fruits per bearing tree) 51 48 46 43 40 37 34 31 29 26 23 23 23 23 23 23 23 Cottorn 126 131 107 ill 107 117 127 170 115 156 174 114 168 100 95 148 190 Groundnuts 198 207 207 206 217 220 210 224 196 213 221 218 221 207 228 201 213 Soybeans 215 184 162 173 157 151 164 133 132 136 154 175 217 153 145 172 178 llung beaTns 159 185 178 173 184 174 166 157 148 147 131 149 155 141 134 123 112 Castor beanis 194 218 143 151 188 161 141 154 130 161 166 166 198 150 163 149 166 Prouuction (000 ton) Paddy 8,454 9,475 9,886 10,992 11,585 10,362 10,978 11,947 9,625 10,348 13,410 13,570 13,744 11,669 13,748 12,447 14,092 Rubber 161 172 186 195 198 211 217 218 219 258 282 287 316 337 368 382 349 Maize 317 544 598 665 858 935 1,021 1,122 1,212 1,331 1,454 1,393 1,995 1,239 2,066 2,105 2,928 Sorghltm - - - - - 7 73 114 137 57 62 46 146 102 140 250) 310 IKenaf 5( 181 339 134 212 303 529 661 492 317 407 586 441 595 686 549 454 a.ssava 05n83 !,229 1,726 2,077 2,111 1,557 1,475 1,892 2,063 2,611 2, 47 4 2,,432 3,673 4(I3,6 7,770 9,503 11,641 Sugarcane 5,012 5,382 3,984 3,155 4,733 5,074 4,480 3,829 4,526 5,878 4,876 5,618 5,920 8,712 14,173 15,818 22,253 31 Tobacco (Virginia) 8 9 9 11 12 13 12 14 17 16 20 22 26 24 31 37 43 5 Z Coconut (mln fruits) 724 808 816 838 816 760 713 656 637 580 577 574 571 568 565 562 560 Cotton 38 45 38 41 49 49 60 89 81 156 126 56 98 83 25 41 47 Croundnuts 124 152 108 112 113 120 131 220 132 158 183 174 181 190 230 205 228 Soybeans 29 26 24 30 33 32 19 38 53 45 69 82 157 150 164 190 243 Itng beans 46 60 41 54 116 110 125 132 123 184 170 229 228 269 225 237 181 Castor beans 34 43 33 44 53 39 32 42 20 39 31 24 27 19 26 31 38 Source: Department of Agricultural Extension, MOAC. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1959-75, Central Region 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Area Planted (000 rai) Paddy 12,588 12,563 12,825 12,525 13,225 13,475 13,575 13,938 13,788 14,154 13,410 13,040 13,170 13,204 13,275 13,238 13,156 Rubber n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Maize 412 762 1,011 1,015 1,088 1,545 1,494 1,694 1,699 1,837 1,436 1,250 2,102 1,739 2,228 2,439 2,986 Sorghum - - - - - 9 123 211 172 74 119 126 197 159 349 550 615 Kensf - 12 24 2 - 2 - 22 7 3 8 6 17 20 31 12 9 Cassava 342 376 547 659 738 525 451 618 679 883 815 762 942 1,310 1,928 2,114 2,367 Sugarcane 376 462 301 306 564 552 521 458 622 753 581 637 718 978 1,467 1,559 2,268 Tobacco (Virginia) - - - - - - - - - - - - - - - - _ Coconut n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 33 46 92 86 103 45 55 64 101 97 58 37 51 85 23 29 37 Groundouts 209 311 141 127 93 97 105 146 125 118 123 163 118 134 191 179 187 Soybeans 11 16 19 17 31 25 42 46 23 21 37 38 49 119 157 162 119 Mung beans 74 99 96 75 72 77 144 225 207 166 220 273 196 302 373 339 354 Castor beans 78 92 73 118 122 57 76 99 49 154 126 74 77 60 71 83 80 Yield (kg/rai) Paddy 226 277 286 294 322 308 305 288 277 252 299 285 296 288 335 304 278 Rubber n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Maize 257 314 320 344 335 296 326 247 277 302 380 330 334 232 339 270 279 Sorghum - - - - - 580 402 305 371 314 287 294 284 229 216 256 254 Kenaf 183 173 169 190 274 200 155 149 145 285 258 320 307 222 189 207 219 Cassava 2,971 2,933 2,939 2,907 2,542 2,511 2,521 2,528 2,516 2,583 2,464 2,499 3,118 2,298 2,510 2,537 2,509 1 Sugarcane 6,816 6,593 6,118 6,048 5,556 5,762 5,810 5,722 5,323 5,838 6,371 6,922 6,578 7,614 8,361 8,215 7,835 Tobacco (Virginia) - - - - - - - - - - - - - - - - - Coconut (fruits per bearing tree) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 118 126 88 106 70 169 138 189 64 190 217 195 200 167 134 183 200 Groundnuts 216 218 215 215 202 215 197 196 180 203 197 263 232 172 225 214 199 Soybeans 126 129 135 142 156 165 157 155 144 147 156 159 145 148 166 159 160 Mung beans 159 178 168 174 158 155 158 160 131 171 129 156 178 137 130 137 124 Castor beans 188 210 167 184 193 148 150 158 127 174 146 116 228 161 154 159 171 Production (000 ton) Paddy 2,845 3,476 3,668 3,681 4,265 4,145 4,141 4,010 3,818 3,570 4,010 3,720 3,895 3,808 4,450 4,029 3,663 Rubber n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0.a. n.a. n.a. n.a. n.a. n.a. Maize 106 239 323 349 364 457 487 419 471 555 546 413 703 404 755 659 834 Sorghum - - - - - 5 - 64 64 23 34 37 56 36 76 141 156 Kenaf - 2 4 - - - 50 3 - 1 2 2 5 4 6 2 2 Cassava 1,016 1,104 1,607 1,914 1,877 1,317 1,137 1,563 1,709 2,282 2,008 1,905 2,939 3,009 4,840 5,364 5,939 Sugarcane 2,565 3,047 1,838 1,847 3,132 3,178 3,025 2,619 3,309 4,392 3,700 4,407 4,725 7,449 12,263 12,803 17,769 & z Tobacco (Virginia) - - - - - - - - - - - - - - - - - MX Coconut (sln fruits) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.8. a0 Cotton 4 6 8 9 7 8 7 12 6 18 13 7 10 14 3 5 7 0 Groundnuts 44 69 30 27 19 21 21 29 22 24 24 43 28 23 43 38 37 Soybeans 1 2 3 2 5 4 7 7 3 3 6 6 7 18 26 26 19 Mung beans 12 18 16 13 11 12 23 36 27 28 28 43. 35 41 49 47 44 Castor beans 15 19 12 22 24 8 11 L[6 6 27 L: 9 l d LO L 3 . Source: Department of Agricultural Extension, MOAC. THAI l.AND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield anid ProductLion of Major Crops, 1959-75, Northerri RegIon 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Area Planted (000 ral) Paddy 7,050 7,081 7,394 7,673 7,906 8,775 8,714 9,446 9,085 9,569 10,030 9,980 9,203 9,379 11,316 1(,181 11,649 Rubber - - - - - - - - - - - - - Maize 308 399 535 732 1,248 1,616 1,749 1,875 2,329 2,157 2,496 2,795 3,364 3,789 3,626 3,625 4,550 Sorghum - - - - - 4 46 112 208 100 90 114 314 193 185 701 820 Kenaf 5 16 65 18 33 26 33 50 33 153 14 25 22 32 48 19 7 Cassava 3 7 11 17 19 19 18 34 32 22 24 21 33 84 186 120 162 Sugarcane 233 197 222 121 125 151 105 120 147 145 118 149 145 566 206 2S2 379 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 106 l15 135 156 236 251 294 333 401 554 451 328 360 503 196 201 157 Groundnuts 220 199 181 271 248 282 327 638 336 372 427 364 460 499 487 462 479 Soybeans 517 5l8 127 154 175 186 71 233 373 301 409 422 663 844 955 917 1,213 Mung beans 163 572 98 205 532 503 578 579 563 1,004 992 1,184 1,170 1,483 1,104 1,294 1,041 Castor beans 44 48 35 57 73 99 60 84 60 32 24 26 25 33 41 65 74 Yield (kg/rat) Paddy 323 346 345 360 366 252 368 353 30i 267 383 4u8 387 284 345 37i 354 Rubber - - - - - - - - - - - - - - - Maize 253 296 351 331 337 251 258 306 257 283 279 279 292 170 245 257 298 Sorghum - - - - - 500 326 339 298 270 267 61 274 326 314 153 183 H Kenaf 200 188 169 167 212 592 212 180 212 550 214 238 182 588 229 211 286 Cassava 1,333 1,857 1,818 1,412 1,895 1,632 2,000 1,794 1,844 2,227 1,917 2,000 2,182 2,179 2,613 2,850 2,932 Sugarcane 4,657 5,294 5,347 4,372 4,304 4,305 4,119 4,208 3,879 4,531 4,000 4,188 3,897 4,416 6,165 7,746 7,280 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut (fruits per bearing tree) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 123 122 111 109 119 104 122 177 132 164 151 82 189 85 82 149 185 Groundnuts 195 201 210 207 210 223 217 238 217 226 248 212 230 200 225 219 225 Soybeans 222 186 165 175 160 145 169 129 131 136 154 178 225 154 143 174 180 Mung beans 160 198 194 176 188 181 166 157 156 142 130 148 149 143 142 123 117 Castor beans 227 208 171 140 164 131 150 155 123 156 250 154 160 152 171 154 149 Production (000 toni) Paddy 2,280 2,450 2,554 2,761 2,897 1,?13 3,21o 3,335 2, 738 2,559 3,840 4,070 3,557 2,665 3,899 3,781) 4,125 Rtubber - - -- - - - - - - - - - - - - - - Maize 78 118 188 242 421 406 451 574 598 610 696 779 981 644 888 933 1,356 Sorghn - - - - - 2 5 38 2 27 24 7 86 63 58 1 150 Kenaf 1 3 11 3 7 5 7 9 7 23 3 5 4 6 11 4 2 Cassava 4 13 20 24 36 31 36 61 59 49 46 42 72 183 483 342 475 Sugarcane 1,085 1,043 1,187 529 538 650 416 505 578 657 472 624 565 733 1,270 1,952 2,759 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut (mln fruits) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 13 l4 15 17 28 26 36 59 53 91 68 27 68 43 56 30 29 Groundnuts j 43 40 38 56 52 63 71 152 73 84 106 77 106 100 1I0 101 108 < Soybeans 26 22 21 27 28 27 12 30 49 41 63 75 149 130 137 160 218 z Mung beaas 26 34 19 36 100 91 96 91 88 143 529 175 174 212 557 159 122 x Castor beans 50 10 6 8 12 13 9 13 8 5 6 4 4 5 7 10 11 Source: Department of Agricultural Extension, MOAC. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1959-75, Northeastern Region 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Area Planted (000 rai) Paddy 15,419 14,556 15,406 17,820 16,970 15,471 15,332 19,630 15,160 17,860 20,240 20,460 21,471 18,223 22,139 20,635 24,990 Rubber - - - - - - - - - - - - - - - - - Maitze 440 506 329 277 247 25:3 296 436 524 647 821 750 1,132 1,269 1,624 1,797 2,547 Sorghum - - - - - - 21 29 26 17 13 9 7 6 19 8 13 Kenaf 273 849 1,632 692 925 1,337 2,366 3,243 2,428 1,429 1,910 2,750 2,198 2,841 3,556 2,934 2,347 Cassava 26 34 32 39 53 51 79 71 81 57 105 127 211 428 969 1,540 1,987 Sugarcane 275 283 229 187 230 296 244 169 149 211 176 137 172 164 204 269 347 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 161 186 130 130 116 122 122 125 200 349 217 131 171 242 45 50 55 Groundnuts 179 208 179 131 161 142 164 170 184 214 212 214 174 230 274 324 331 Soybeans 9 5 4 3 3 2 4 5 3 7 4 4 11 20 27 31 31 Mung beans 51 55 33 27 20 24 24 20 35 31 30 28 42 35 31 33 34 Castor beans 52 56 119 112 83 83 87 88 47 54 36 48 33 35 46 61 60 Yield (kg/rai) Paddy 163 191 182 206 207 152 178 193 155 179 226 240 253 230 208 183 213 Rubber - - - - - - - - - - - - - - - - - Maize 255 304 230 246 261 251 234 254 234 200 245 258 265 145 252 274 279 Sorghum - - - - - - 346 350 343 248 266 167 170 247 298 265 265 Kenaf 180 208 199 187 221 222 220 200 200 205 211 211 196 206 188 185 192 Cassava 1,537 1,780 1,776 1,578 1,755 1,953 2,131 1,788 1,955 1,934 2,438 2,693 2,300 2,479 2,227 2,308 2,517 Sugarcane 4,405 4,006 3,820 3,724 4,447 4,054 4,038 3,699 3,975 3,586 3,985 4,285 3,661 3,209 3,114 3,950 4,969 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut (fruits per bearing tree) n.a. n.a. n.a. n.a. n.a. n.a. ni.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 129 138 116 113 117 127 130 138 102 135 208 171 115 107 129 127 207 Groundnuts 189 197 197 199 233 226 214 200 176 197 186 198 196 236 239 167 195 Soybeans 178 176 158 163 170 164 154 155 125 91 154 142 114 125 181 179 182 Mung beans 154 167 175 176 162 149 187 153 127 161 146 161 164 136 133 120 134 Castor beans 195 237 121 121 194 198 130 146 124 132 169 247 156 136 171 127 146 Production (000 ton) Paddy 2,521 2,775 2,809 3,666 3,516 3,302 2,734 3,796 2,350 3,192 4,580 4,920 5,432 4,188 4,611 3,773 5,323 Rubber - - - - - - - - - - - - - - - - - Maize 112 154 76 68 64 63 69 111 123 129 201 194 300 184 410 493 712 Sorghum - - - - - - 7 10 9 4 3 1 1 1 5 2 3 Kenaf 49 176 324 130 204 297 521 649 485 293 402 579 432 584 670 541 450 Cassava 40 60 57 61 92 100 167 126 158 109 256 342 485 1,061 2,158 3,556 5,000 Sugarcane 1,211 1,134 873 698 1,022 1,201 986 627 592 757 701 587 628 527 636 1,062 1,723 Tobacco (Virginia) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coconut (mln fruits) n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton 21 26 15 15 14 15 16 17 20 47 45 22 20 26 6 6 11 Groundnuts 32 41 35 26 38 32 35 34 32 42 39 42 34 54 65 54 65 . M Soybeans 2 1 1 - 1 - 1 1 - 1 1 1 1 2 4 4 6 c Mung beans 8 9 6 5 3 4 4 3 4 5 4 4 7 5 5 4 5 m Castor beans 10 13 14 14 16 16 11 13 6 7 6 12 5 5 8 8 9 Source: Department of Agricultural Extenision, MOAC. THAILAND AGRICt3LTURAL PROGRAII AND POLICY PRIORITIES Area Planted, Yield and Production of l-ajor Crops, 1959-75, Southern Region 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 Area Planted (000 rai) Paddy 2,850 2,813 2,994 3,150 3,131 3,150 3,344 3,444 3,575 3,590 3,720 3,361) 3,199 3,814 3,006 3,767 3,449 Rubber i.a. TI.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. II.a. n.a. n.a. Maize 89 119 42 26 29 36 66 79 99 120 46 29 41 22 49 65 93 Sorghutn - - - - - - 5 8 9 9 4 4 5 2 2 3 4 1 enaf - - - - - - - - - - - - - - - - - Cassava 20 30 32 52 65 61 9() 92 89 104 98 99 128 101 152 124 141 Sugarcane 41 44 25 23 14 16 18 31 18 29 2 - 1 2 1 - - Tobacco (Virginia) - - - - - - - - - - - - - - Coconut ll.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. in.a. n.a. Cotton - - - - - - - - - - - - - - - - Groundiiuts 17 18 21 15 18 24 24 29 28 38 64 55 66 55 57 56 75 Soybeans - - - - - - - - - - - 2 1 1 3 2 2 'lung beans - - 2 3 5 27 8 15 26 48 55 59 63 87 179 267 188 Castor beans 1 1 2 2 4 3 - - - - - - - - - - 17 Yield (kg/rai) Paddy 284 275 286 281 290 223 267 234 201 286 263 256 268 264 262 230 284 Rubber n.a. n.a. n.a. n.a. n.a n.. 0.a. u.a. n.a. n.a. n.a. n.a. n. n.a. n.a. n. n.a. Itaize 239 276 264 242 258 223 225 234 204 303 244 268 288 287 281 299 285 Sorghuri - - - - - - 291 260 258 239 214 260 274 242 150 151 164 Kenaf - - - - - - - - - - - - - - - - - Cassava 1,192 1,516 1,367 1,468 1,655 1,778 1,492 1,530 1,539 1,650 1,664 1,443 1,393 1,802 1,874 1,945 1,608 Sugarcane 3,629 3,625 3,418 3,476 3,001 2,856 2,907 2,522 2,589 2,451 1,785 1,598 2,073 1,714 2,415 2,042 2,012 1 Tobacco (Virginia) - - - - - - - - - - - - - - - - - Coconut (fruits per bearinIg tree) u. . r. n. n.a. n.a. n.a. n.a .a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Cotton - - - - - - - - - - - - - - - - - Oroundaiuts 189 226 212 204 199 172 172 183 162 196 203 193 202 233 212 222 234 Soybeans 156 153 148 148 152 141 92 114 104 153 124 153 158 76 262 134 124 flung beans 149 160 158 166 146 147 113 117 119 154 151 1(9 188 122 86 101 58 Castor beans 100 119 132 134 140 143 143 134 146 186 147 117 136 46 146 112 285 ProdUCtion (00(0 ton) Paddy 8(8 774 355 884 907 702 893 806 719 1,027 98() 860 358 1,00)8 788 865 981 &ubber ll.a. n.a. n.a. n.a . n.a. u.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. L1 a ize 2 1 33 11 f, 7 8 15 1 9'l 2() 3G6 11 o 126 14 20 2(. Sorglum - - - - - - 2 2 2 2 1 1 1 - - - 1 Renaf - - - - - - - - - - - - - - - - Cassava 24 45 43 76 107 109 134 141 136 172 164 143 178 183 285 242 227 Sugarcane 149 159 85 80 41 45 52 79 47 71 4 - 2 3 3 1 2 Tobacco (Virginia) - - - - - - - - - - - - - - - - Cocon1ut (imin fruits) n.a. n.a. n.a. n.a,. n.a. n.a. n .ai,. n.a. n.a. n.a,. n.a,. n.a. n.a. n.a. n. a. n.a n.a. Cottoni - - - - - - - - - - - - - - - Grounid outs 3 4 4 3 4 4 4 5 5 7 13 11 13 13 12 12 18 Soybeans - - - - - - - - - - - - - - 1 - - :tung beants - - - - 1 4 1 2 3 7 8 6 12 11 15 27 11 Castor beans - - - - 1 - - - - - - - - - - - 5 Source: Department of Agricultural Extension, I4OAC. - 197 - ANNEX 9 Table 2.06 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1972-80, Kingdom 1972/a 1973 1974 1975 1976 1977 1978 1979 1980 Area Planted (-000 rai) Paddy 45,931 52,269 49,889 55,602 53,594 56,444 62,485 58,971 60,110 Rubber 8,312 8,404 8,497 8,589 8,682 8,774 8,867 8,959 9,052(F) Maize 6,231 7,172 7,749 8,200 8,029 7,534 8,661 9,529 8,960 Sorghum 359 555 1,262 1,226 892 1,062 1,098 1,182 1,546 Kenaf 2,951 2,714 2,524 2,039 1,023 1,603 2,003 1,418 1,068 Cassava root 2,069 2,595 3,108 2,969 4,327 5,293 7,282 5,286 7,250 Sugarcane 1,133 1,616 1,935 2,444 3,119 3,541 3,190 2,730 2,927 Tobacco /b n.a. 197.7 230.6 286 284.6 273 293.6 314.9 220.3 Coconut 2,398 2,425 2,453 2,467 2,447 2,560 2,574 2,591(F) 2,602(F) Cotton 384 181 323 188 154 528 429 750 949 Groundnuts 743 774 814 736 761 641 660 609 658 Soybeans 525 766 823 738 635 958 1,010 679 788 Mung beans 1,418 1,596 1,293 1,022 1,392 2,720 2,638 2,652 2,796 Castor beans 279 282 198 231 281 241 271 312(F) 236(F) Sesame 184 217 164 161 175 220 289 228(F) 245(F) Yield (kg/rai) Paddy 270 285 268 275 281 247 280 265 289 Rubber /c 49 53 54 48 53 57 61 68 63 Maize 211 326 323 349 333 223 322 300 334 Sorghum 283 252 198 188 166 118 197 169 153 Kenaf 145 173 152 151 182 153 169 156 198 Cassava root 1,921 2,097 2,177 2,389 2,364 2,237 2,246 2,100 2,281 Sugarcane 8,400 8,300 7,540 8,148 8,367 5,349 6,445 4,698 6,783 Tobacco n.a. 150 150 150 150 150 150 150 170 Coconut 625 650 650 667 665 665 544 462(F) 491(F) Cotton 129 157 175 153 175 172 174 190 203 Groundnuts 206 189 198 193 199 165 193 179 196 Soybeans 138 136 134 154 179 101 157 150 127 Mung beans 144 131 143 118 90 76 98 94 93 Castor beans 148 139 163 163 154 154 137 114(F) 126(F) Sesame 116 108 190 130 118 106 104 95(F) 111(F) Produiction ('000 ton) Paddy 12,413 14,896 13,386 15,300 15,068 13,920 17,447 15,758 17,368 Rubber 337 368 382 349 393 431 467 534 499.4 Maize 1,315 2,339 2,500 2,863 2,675 1,677 2,791 2,863 2,998 Sorghum 102 140 250 231 148 126 216 199 237 Kenaf 428 469 384 308 186 246 338 222 211 Cassava root 3,974 5,443 6,765 7,094 10,230 11,840 16,358 11,101 16,540 Sugarcane 9,513 13,339 14,592 19,910 26,094 18,941 20,561 12,827 19,854 Tobacco n.a. 30 35 43 43 41 44 47 37 Coconut 699 691 684 842 901 927 860 688(F) 735(F) Cotton 49 28 56 29 27 91 74 143 193 Groundnuts 153 147 161 142 152 106 128 109 129 Soybeans 72 104 110 114 114 96 159 102 100 Mung beans 204 209 188 121 125 207 260 251 261 Castor beans 41 39 32 38 43 37 37 36(F) 30(F) Sesame 21 24 31 21 21 23 30 22(F) 27(F) F = Forecast /a Including crop year beginning April 1 to March 31 of next year. 7b Tobacco, Virginia. 7 Yield is on the basis of harvested area. Source: Office of Agricultural Economics, MOAC. - 198 - ANNEX 9 Table 2.07 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1972-80, Central 1972/a 1973 1974 1975 1976 1977 1978 1979 1980 Area Planted ( 000 rai) Paddy 14,363 15,494 14,980 15,056 15,149 15,277 17,276 13,689 14,685 Rubber - - - - - - - - - Maize 2,057 1,903 2,C1l 2,024 1,857 1,581 1,796 2,055 2,016 Sorghum 159 349 550 601 495 656 537 564 792 Kenaf 19 51 36 28 - 5 30 17 13 Cassava - 1,503 1,768 1,555 2,133 2,138 2,493 1,770 2,500 Sugarcane 1,003 1,381 1,568 2,029 2,365 2,803 2,397 2,061 2,266 Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton 40 37 32 28 27 171 130 248 343 Groundnuts 104 146 142 128 138 87 130 97 104 Soybeans 38 86 118 52 15 142 133 84 69 Mung beans 329 302 227 202 184 624 503 447 463 Castor beans 131 126 78 80 87 94 101 - - Sesame 31 45 23 23 14 18 29 - - Yield (kg/rai) Paddy 312 352 322 309 337 350 351 337 377 Rubber - - - - - - - - - Maize 179 341 334 355 376 179 332 311 305 Sorghum 228 216 257 217 193 123 L30 147 179 Kenaf 193 161 148 167 - 163 188 176 224 Cassava - 2,153 2,320 2,447 2,417 2,361 2,455 2,190 2,418 Sugarcane 8,738 8,477 7,711 8,513 8,688 5,494 6,911 4,393 6,660 Tobacco - - - - - - - - Coconut - - - - - - - - - Cotton 129 157 202 t44 201 167 192 181 218 Groundnuts 180 187 211 180 191 161 190 172 202 Soybeans 175 143 107 157 161 113 151 134 132 Mung beans 105 129 163 102 70 76 92 84 68 Castor beans 158 132 173 163 175 147 146 - - Sesame 105 111 194 129 143 60 125 - - Productton ( 000 ton) Paddy 4,483 5,451 4,829 4,647 5,103 5,352 6,059 4,671 5,543 Rubber - - - - - - - - - Maize 369 648 671 718 698 284 596 639 615 Sorghum 36 76 141 131 96 80 102 84 142 Kenaf 4 8 5 5 - 1 6 3 3 Cassava - 3,230 4,102 3,803 5,155 5,048 6,119 3,876 6,043 Sugarcane 8,763 11,714 12,094 17,274 20,550 15,399 16,563 9,053 15,093 Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton 5 6 6 4 5 29 25 45 75 Groundnuts 19 27 30 23 26 14 25 17 21 Soybeans 7 12 13 8 2 16 20 11 9 Mung beans 35 39 37 21 13 47 46 38 31 Castor beans 21 17 14 13 15 14 15 - - Sesame 3 5 5 3 2 1 4 n.a. - /a Crop beginning April 1 to March 31 of next year. Source: Office of Agricultural Economics, MOAC. - 199 - ANNEX 9 Table 2.08 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1972-80, North 1972/a 1973 1974 1975 1976 1977 1978 1979 1980 Area Planted (-000 rai) Paddy 9,471 11,496 10,390 12,004 10,795 11,952 13,212 12,485 12,902 Rubber - - - - - - - - Maize 2,815 3,503 3,624 4,032 3,502 3,757 4,795 5,008 4,658 Sorghum 193 185 702 615 387 382 545 596 719 Kenaf 8 21 1 3 - 13 11 - Cassava - 124 136 114 142 134 186 118 215 Sugarcane 57 144 225 243 439 462 392 369 366 Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton 231 86 205 77 66 214 158 297 442 Groundnuts 383 374 369 329 374 416 360 360 369 Soybeans 477 669 687 674 558 796 837 567 683 Mung beans 973 1,105 866 738 1,173 2,030 2,019 2,106 2,217 Castor beans 70 74 60 - - - - - - Sesame 91 116 59 - - - - - - Yield (kg/rai) Paddy 286 347 373 360 381 309 379 351 377 Rubber - - - - - - - - Maize 233 329 333 357 346 244 341 308 354 Sorghum 330 316 152 161 132 104 202 189 124 Kenaf 188 173 152 118 - 128 147 - - Cassava - 2,066 2,325 2,393 2,444 2,308 2,494 2,270 2,266 Sugarcane 6,359 8,456 7,128 6,649 8,146 5,099 5,365 6,247 7,024 Tobacco - - - - - - - - Coconut - - - - - - - - Cotton 115 149 171 139 136 164 165 180 178 Groundnuts 374 186 213 206 211 164 203 184 206 Soybeans 135 135 139 155 182 98 159 151 125 Mung beans 160 138 146 123 93 76 100 96 93 Castor beans 146 142 172 - - - - - - Sesame 127 112 181 - - - - - - Production ('000 ton) Paddy 2,710 3,984 3,872 4,322 4,111 3,692 5,012 4,385 4,860 Rubber - - - - - - - - - Maize 656 1,154 1,207 1,441 1,212 917 1,633 1,541 1,648 Sorghum 63 58 107 99 51 40 110 113 89 Kenaf 1 4 - - - 2 2 - - Cassava - 257 317 273 346 309 463 267 488 Sugarcane 361 1,216 1,604 1,619 3,575 2,355 2,102 2,302 2,572 Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton 27 13 35 11 9 35 26 54 78 Groundnuts 80 70 79 68 79 68 73 66 76 Soybeans 64 90 95 104 102 78 133 86 86 Mung beans 156 153 126 91 109 153 202 203 218 Castor beans 10 10 11 - - - - - - Sesame 11,537 13,013 10,620 - - - - - - /a Crop year beginning April 1 to March 31 of next year. Source: Office of Agricultural Economics, MOAC. _200 - ANNEX 9 Table 2.09 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1972-80, Northeast 1972/a 1973 1974 1975 1976 1977 1978 1979 1980 Area Planted ('000 rai) Paddy 18,241 22,199 20,633 25,016 23,760 24,794 27,979 29,158 28,372 Rubber - - - - - - - - - Maize 1,110 1,536 1,874 2,143 2,587 1,860 2,048 2,437 2,267 Sorghum 6 19 8 10 10 24 17 21 30 Kenaf 2,925 2,642 2,486 2,007 1,023 1,585 1,962 1,401 1,055 Cassava - 844 1,082 1,210 1,985 3,021 4,584 3,896 4,535 Sugarcane 74 91 1.42 171 314 276 289 301 294 Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton 112 58 86 83 61 141 140 206 105 Groundnuts 215 210 259 227 196 106 142 125 151 Soybeans 9 10 17 12 62 20 40 28 36 Mung beans 34 28 22 21 35 55 73 75 88 Castor beans 76 82 57 60 98 43 62 - - Sesame 62 56 80 64 54 62 80 - - Yield (kg/rai) Paddy 230 209 183 213 197 143 190 194 205 Rubber - - - - - - - - - Maize 194 297 295 329 288 212 272 276 322 Sorghum 247 292 264 133 152 227 256 143 169 Kenaf 145 173 L52 151 182 154 169 156 197 Cassava - 2,089 1,984 2,362 2,332 2,146 2,116 2,047 2,207 Sugarcane 5,269 4,510 6,307 5,947 6,261 4,298 4,806 4,894 7,439 Tobacco - - - - - - - - - Coconut - - - - - - - - Cotton 157 168 L74 169 205 190 167 215 241 Groundnuts 114 198 L65 178 183 158 164 166 164 Soybeans 124 133 L43 116 154 117 140 180 149 Mung beans 141 138 L37 126 93 93 112 106 113 Castor beans 133 146 139 146 148 134 128 - - Sesame 105 98 195 128 109 129 100 - Production (-000 ton) Paddy 4,198 4,635 3,795 5,327 4,686 3,555 5,325 5,661 5,811 Rubber - - - - - - - - - Maize 216 456 553 704 744 394 557 674 730 Sorghum 1 5 2 1 1 5 4 3 5 Kenaf 423 457 379 303 186 243 331 219 208 Cassava - 1,764 2,146 2,859 4,629 6,483 9,699 6,952 10,009 Sugarcane 389 409 894 1,016 1,969 1,187 1,388 1,471 2,187 Tobacco - - - - - - - - Coconut - - - - - - - - - Cotton 18 10 15 14 12 27 23 44 40 Groundnuts 44 42 43 40 36 17 23 21 25 Soybeans 1 1 2 1 9 2 6 5 5 Mung beans 5 4 3 3 3 5 8 8 10 Castor beans 10 12 8 9 15 6 8 - - Sesame 6 5 16 8 6 8 8 - /a Crop year beginning April 1 to March 31 of next year. Source: Office of Agricultural Economics, MOAC. - 201 - ANNEX 9 Table 2.10 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Area Planted, Yield and Production of Major Crops, 1972-80, South 1972/a 1973 1974 1975 1976 1977 1978 1979 1980 Area Planted ( 000 rai) Paddy 3,856 3,081 3,836 3,526 3,891 4,421 4,020 3,638 4,150 Rubber - - - - - - - - - Maize - - - - 83 86 23 30 19 Sorghum 2 2 3 - - 1 - - - Kenaf - - - - - - - - Cassava - 124 122 90 68 - 19 3 - Sugarcane - - - - - - - - - Tobacco - - - - - - - - - Coconut - - - - - - - - - Cotton - - - - - 1 - - - Groundnuts 42 44 44 52 52 32 29 26 34 Soybeans 1 2 1 - - - - - - Mung beans 82 160 178 60 - 10 43 24 28 Castor beans 2 1 1 17 2 - - - - Sesame - - 2 3 2 2 3 - - Yield (kg/rai) Paddy 265 268 232 285 300 299 267 301 278 Rubber - - - - - - - - - Maize - - - - 252 334 196 300 260 Sorghum 242 150 151 164 - 115 - - - Kenaf - - - - - 175 - - - Cassava - 1,556 1,638 1,759 1,464 - 4,033 2,097 - Sugarcane 1,714 - - - - - - - 5,595 Tobacco - - Coconut - - - - - - - - - Cotton - - - - - 200 - - - Groundnuts 244 176 219 213 194 206 222 205 208 Soybeans 135 132 94 - - - - - - Mung beans 107 85 120 106 - 92 73 94 71 Castor beans 45 105 123 285 93 119 118 - - Sesame 95 85 141 132 163 65 130 - - Production ('000 ton) Paddy 1,022 825 890 1,004 1,167 1,322 1,073 1,095 1,154 Rubber - - - - - - - - - Maize 6 - - 21 29 5 9 5 Sorghum .5 .3 .4 1 .13 - - - - Kenaf - - - - - - - Cassava - 193 201 159 100 - 77 6 - Sugarcane 3 - - - - - - - 2 Tobacco - - - - Coconut - - - - - - - - Cotton - - - - - - - - - Groundnuts 10 8 10 11 10 7 6 5 7 Soybeans 0.12 0.20 0.12 - - - - - - Mung beans 9 14 21 6 - 1 3 2 2 Castor beans 11 6 90 0.50 0.16 0.20 0.04 - - Sesame - - 0.20 0.30 0.40 0.14 0.40 - - /a Crop year beginning April 1 to March 31 of next year. Source: Office of Agricultural Economics, MOAC. THAILAND AGRICULTURAL "ROGRAM AND POLICY PRIORITIES Paddy and Rice Supply and Utilization, 1967-81 by Glutinous and Nonglutinous Varieties (million metric tons) Apparent domestic rice Milled Stock Exports Id Seed-feed-loss Popul. Rice available for utilization for food + Crop Paddy Production rice equivalent /b change/c milled rice (15% milled product) mid-year/e food & industry use industry (kilos per year /a Total N gl. G1. Total N gl. GI. Total Total N gl. GC. Total N gl. Gl. millions Total N gl. 1. capita) N gl. + Gl. 1967/68 9,625 6.80 2.80 6.25 4.05 2.20 -0.10 1.10 1.00 0.10 0.95 0.60 0.35 34.0 4.10 2.35 1.75 120 1968/69 10,430 6.85 3.55 6.80 4.45 2.35 -0.25 1.05 0.95 0.10 1.00 0.65 0.35 35.1 4.50 2.60 1.90 128 1Q69/70 13;410 8.60 4.85 8.70 5.60 3.10 -0.35 1.10 1.00 0.10 1.30 0.85 0.45 36.4 5.9S 3.40 2.55 163 1970/71 13,570 8.40 5.15 8.80 5.45 3.35 +0.30 1.60 1.45 0.15 1.30 0.80 0.50 37.5 6.20 3.50 2.70 165 1971/72 13,744 8.90 4.85 8.95 5.80 3.15 +0.25 2.15 1.95 0.20 1.35 0.85 0.50 38.5 5.70 3.25 2.45 148 1972/73 12,413 8.35 4.05 8.05 5.40 2.65 +0.50 0.90 0.80 0.10 1.20 0.80 0.40 39.7 6.45 4.30 2.15 162 1973/74 14,898 10.10 4.80 9.70 6.55 3.15 -0.60 1.05 0.95 0.10 1.45 1.00 0.45 40.8 6.60 4.00 2.60 162 1974/75 13,386 9.00 4.40 8.70 5.85 2.85 -0.15 1.00 0.90 0.10 1.30 0.90 0.40 41.9 6.25 3.90 2.35 149 1975/76 15,300 10.10 5.20 9.95 6.55 3.40 +0.35 2.10 1.90 0.20 1.50 1.00 0.50 43.0 6.70 4.00 2.70 156 1976/77 t5,070 10.30 4.80 9.80 6.70 3.10 +0.10 3.00 2.80 0.20 1.45 1.00 0.45 44.0 5.45 3.00 2.45 124 1977/78 14,010 10.10 3.90 9.10 6.55 2.55 - 1.60 1.45 0.15 1.35 1.00 0.35 45.1 6.15 4.10 2.05 136 1978/79 17,470 11.85 5.60 11.35 7.70 3.65 -0.10 2.80 2.70 0.10 1.70 1.15 0.55 46.1 6.75 3.85 2.90 146 1979/80 15,758 10.06 5.70 10.24 6.54 3.70 +0.36 2.80 2.70 0.10 1.54 0.98 0.56 47.3 6.26 3.22 3.04 132 1980/81 17,368 11.87 5.50 11.29 7.72 3.58 -0.20 3.04 2.90 0.14 1.69 1.15 0.54 48.4 6.36 3.47 2.89 131 /a Crop year begins July and ends June 30. T Paddy converted to rice at 0.65 x paddy production. /7c A minus change means a stock build-up during the CY; c plus change means . srock drawdowTI non-glutinous (rice only). 7T Exports are for calendar year; i.e., 1967/68 = 1968 CY exports; Clot. rice normally is less than 10% of total exports. 7e National Economic and Social Development Board. Source: Ministry of Agriculture, Office of Agricultural Economics w t> ANNEX 9 - 203 - Table 3.01 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Fertilizer Use, By Crop and By Region ('000 tons) Central % of North Northeast Plain/a South Kingdom Kingdom Rice 1971 4.12 80.61 61.60 16.28 180.25 69 1975 6.87 86.81 136.91 12.18 242.77 - 51 1976 10.621 113.212 186.511 12.988 323.332 49 1978 13.800 147.060 242.270 16.870 420.000 54 1979 15.742 167.523 276.000 19.235 478.500 60 1980 13.807 147.371 242.840 16.922 420.940 53 Field Crops /b 1971 7.24 7.09 29.57 2.08 51.33 20 1975 27.71 15.61 73.51 2.06 118.89 25 1976 26.371 23.054 139.082 1.916 190.423 29 1978 25.815 22.568 136.150 1.876 186.409 24 1979 19.376 16.941 102.183 1.400 139.900 18 1980 20.221 17,680 106.636 1,460 145.997 23 Others /c 1971 2.84 0.89 10.03 16.28 29.04 11 1975 1.94 3.57 56.88 53.97 116.36 24 1976 6.931 7.141 104.616 39.089 150.636 23 1978 7.157 7.148 109.576 50.688 174.569 22 1979 7.725 7.891 111.319 46.667 173.602 22 1980 7.085 7.337 97.736 37.805 149.963 24 Total 1971 14.20 88.59 123.20 34.64 260.62 100 1975 36.52 105.99 267.30 68.21 478.02 100 1976 43.923 143.407 423.068 53.993 664.391 100 1978 46.772 176.776 487.996 69.434 780.978 100 1979 42.843 192.355 489.502 67.302 792.002 100 1980 41.113 172.388 447.212 56.187 716.900 100 % of Kingdom 1971 5.4 34.0 47.3 13.3 100.0 1975 7.6 22.2 55.9 14.3 100.0 1976 6.6 21.5 63.7 8.1 100.0 1978 6.0 22.6 62.5 8.9 100.0 1979 5.4 24.3 61.8 8.5 100.0 1980 6.1 22.4 63.1 8.4 100.0 /a Includes Lower North. Th Cassava, corn, sorghum, sugarcane, kenaf, cotton, tobacco, mung beans, soy beans, peanuts, watermelon, pineapple, yam, sweet potato, potato. /c Coconut, rubber, oil palm, fruit trees and flowering plants. Source: Office of Agricultural Economics, MOAC THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Apparent Fertilizer Consumption, 1966-78 (tons) Opening Domestic Industrial Closing Apparent Nutrient Content Year inventory /a Imports production /b use inventory /a consumption /c N P205 K20 1966 n.a. 141,428 20,275 1,383 n.a. 160,320 24,595 16,235 7,748 1967 " 218,244 36,187 1,696 " 252,738 44,485 28,056 13,152 1968 " 265,686 28,635 2,939 " 291,382 47,962 39,010 15,652 1969 " 265,830 20,049 3,965 " 281,914 42,839 41,480 20,272 1970 " 249,641 43,522 5,029 " 288,134 44,097 37,741 27,990 1971 " 226,544 39,568 7,189 " 258,923 44,242 26,933 21,728 1972 383,303 40,762 6,300 " 417,765 66,617 ou6,4J L2,2L7 1973 " 398,863 34,351 7,246 425,968 67,914 62,870 23,732 1974 " 342,934 44,804 8,300 " 379,438 60,012 52,746 17,433 1975 50,000 465,958 54,695 12,300 125,000 433,353 70,394 56,916 18,996 1976 125,000 679,484 74,192 13,250 250,000 615,426 105,541 73,650 21,565 1977 250,000 952,476 74,211 13,020 400,000 863,667 149,553 110,547 30,402 1978 400,000 846,366 70,558 15,380 337,000 964,544 167,940 134,304 37,423 /a For 1975-78, opening inventory and closing inventory are IFDC estimates. /b Data include Mae Moh, Bureau of Bangkok Municipal Fertilizer and estimated phosphate rock production. The years 1975, 1976, 1977 and 1978 include filler (clay) used in granulation plants - estimated at 20,000; 26,000; 25,000; and 33,000 tons, respectively. /c No provision is made for product losses in handling in calculating apparent consumption. Source: Ministry of Agriculture, Office of Agricultural Economics and IFDC estimates. I I4 X X o0 C ANNEX 9 - 205 - Table 3.03 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Value of Insecticides Used for Crop Production in Thailand Type of Value of Insecticides used in million B Crops 1975 1976 1977 1978 %/a Rice 34.3 60.9 89.6 134.4 26.9 Vegetable 20.0 60.7 92.7 116.8 23.2 Cotton 15.0 17.5 76.6 55.0 11.0 Citrus 14.7 25.9 29.1 33.5 6.7 Onion/Garlic 14.0 23.2 25.2 29.0 5.8 Fruit Trees 10.3 14.0 24.7 27.7 5.5 Tobacco 12.9 19.2 23.6 26.0 5.2 Water Melon 4.5 12.1 13.3 17.3 3.5 Bean/Pea 8.8 10.1 12.5 17.5 3.5 Grapes 6.0 9.3 12.4 15.0 3.0 Ornamentals 3.2 6.9 8.8 10.5 2.1 Orchid 3.5 4.6 5.7 6.6 1.3 Rubber 0.1 0.1 0.2 0.2 0.6 Oil Palm - - 0.2 1.0 Total 176.4 294.6 429.0 499.7 100 /a Based on 1978 values. - 206 - ANNEX 9 Ta,ble 3.04 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Imports and Domestic Production of Agricultural Machinery Imports Domestic production Water Two-wheel lb Four-wheel /b Year Tractors ia pumps /a power tillers power tillers Tractors /b 1951 - 2,598 1952 - 4,466 1953 - 14,319 1954 - 9,464 1955 262 11,294 1956 404 93,485 1957 267 20,811 1958 384 13,482 1959 445 9,409 1960 855 11,166 1961 1,487 12,059 1962 1,353 11,861 1963 1,922 19,741 1964 3,446 26,931 1965 3,047 39,099 1966 3,872 60,923 1967 4,305 82,125 1968 3,610 151,343 1969 2,614 106,666 1970 1,763 136,686 (688) 1971 2,414 105,109 (1,367) 1972 1,612 90,092 (109) 1973 1,715 150,095 n.a. n.a. n.a. (274) 1974 3,318 168,524 24,808 2,324 n.a. (1,112) 1975 6,877 149,021 27,860 2,582 2,426 (4,231) 1976 n.a. - 31,766 2,914 2,332 (5,257) 1977 n.a. - 35,465 3,258 2,380 (6,161) 1978 n.a. - 39,568 3,808 2,158 (4,298) n.a. = not available. /a Imports relate to all tractors, including those for industrial units and consist mainly of 4-wheel tractors. Source: Jongsuwat, 1980, assembled from the Customs Department's "Annual Statement of Foreign Trade Statis- tics." Figures in brackets relate to farm tractors as reported by Loohawenchit, 1980, Table 7. In later years, imports consisted of about 50% of 2-wheel tractors. /b Loohawenchit, 1980, Table 8. Source: World Bank Nonfarm Employment Study, April 1982. - 207 - ANNEX 9 Table 4.01 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Principal Merchandise Exports 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1. Rice Value (million of baht) 2,517 2,909 4,437 3,594 9,778 5,852 8,603 13,382 10,425 15,592 19,508 26,364 Voltume (thousands of tons) 1,064 1,576 2,112 849 1,029 951 1,973 2,946 1,607 2,797 2,800 3,036 Unit value (baht per ton) 2,366 1,846 2,101 4,235 9,500 6,152 4,359 4,542 6,488 5,575 6,967 8,684 2. Rubber Valuie (million of baht) 2,232 1,905 1,862 4,573 5,035 3,474 5,297 6,164 8,030 12,351 12,351 10,840 Volume (thousands of tons) 276 308 318 391 363 332 373 402 442 521 455 474 Unit value (haht per ton) 8,098 6,188 5,861 11,710 13,887 10,458 14,184 15,339 18,160 23,706 27,145 22,869 3. Maize /a Value (million of baht) 1,969 2,286 2,085 2,969 6,078 5,705 5,676 3,345 4,275 5,643 7,299 8,341 Volume (thousands of tons) 1,448 1,873 1,844 1,386 2,302 2,105 2,419 1,542 1,972 2,014 2,203 2,541 Unit value (baht per ton) 1,360 1,220 1,131 2,142 2,641 2,711 2,346 2,169 2,167 2,802 3,313 3,283 4. Tin (metal) Valule (million of baht) 1,618 1,569 1,664 2,035 3,096 2,247 2,972 4,541 7,229 9,253 11,347 9,115 Volume (thotusands of tons) 22.2 21.9 21.8 22.7 20.8 16.7 20.0 21.4 28.9 31.3 33.9 30.1 Unit value (haht per ton) 72,732 71.738 76,190 89,762 149,083 134,842 148,244 211,830 249,767 295,623 334,720 302,824 5. Tapioca Products Value (million of baht) 1,223 1,240 1,547 2,537 3,836 4,597 7,527 7,720 10,892 9,891 14,887 16,439 Volume (thousands of tons) 1,327 1,123 1,311 1,836 2,396 2,385 3,721 3,954 6,288 3,961 5,218 6,264 UJnit value (baht per ton) 922 1,104 1,180 1,381 1,601 1,927 2,023 1,952 1,732 2,497 2,853 2,624 6. Kenaf and Jute Value (million of baht) 719 935 1,087 1,054 845 643 579 418 448 391 154 78 Volume (thousands of tons) 258 272 255 264 247 158 138 81 91 79 30 21 Usit value (baht per ton) 2,790 3,442 4,261 3,991 3,421 4,080 4,185 5,146 4,920 4,949 5,133 3,714 7. Sugar Value (million of baht) 94 382 1,264 1,161 3,757 5,696 6,843 7,445 3,969 4,797 2,975 9,571 Volume (thousands of tons) 56 175 408 275 444 595 1 ,124 1,655 1,040 1,190 452 1,119 Unit value (baht per ton) 1,671 2,188 3,102 4,216 8,462 9,566 6,088 4,500 3,816 4,031 6,582 8,553 8. Shrimp Value (million of baht) 224 247 340 804 602 891 1,347 1,170 1,500 2,372 1,961 2,133 Voluime (thousands of tons) 6.4 5.6 6.7 14.9 10.3 13.5 15.2 13.7 15.4 18.6 17.9 18.8 Unit value (baht per ton) 34,886 44,162 50,558 54,050 58,726 65,800 88,514 85,645 97,542 127,527 109,553 113,457 9. Teak Value (million of baht) 156 183 208 422 402 445 749 545 253 118 - 46 Volume (thousands of cu m) 29 40 52 35 43 72 39 15 6 - 5 Unit value (Baht per cu m) 5,424 4,868 5,161 8,168 11,434 10,344 10,380 13,842 16,432 19,667 - 9,200 10. Tobacco Leaves Value (million of baht) 197 236 284 309 445 596 699 924 1,160 1,243 1,371 1,738 Volume (thousands of tons) 11 13 18 16 15 17 22 28 35 34 39 37 Unit value (baht per ton) 18,266 17,936 15,689 18,761 30,454 32,359 31,735 33,072 33,323 36,559 35,154 46,973 Value of principal exports 10,949 11,892 14,778 19,458 33,874 30,146 40,292 45,654 48,181 61,651 71,853 84,665 Other exports 3,823 5,383 7,713 12,768 15,925 14,861 20,505 25,544 34,884 46,528 61,344 68,365 Total merchandise exports 14,772 17,275 22,491 32,226 49,799 45,007 60,797 71,198 83,065 108, 179 133, 197 153, 030 Adjustments for B/P -502 -583 -741 -974 -797 -642 -800 -735 -814 -1, 300 -1, 156 -2,844 Merchandise exports, f.o.b. 14,270 16,692 21,750 31,252 49,002 44,365 60,361 70,463 82,251 106,879 132,041 150,186 /a Including maize groat and meal. Source: Bank of Thailand - 208 - ANNEX 9 Table 4.02 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Principal Merchandise Exports by Countries (Millions of baht) 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 198(0 1981/a Rice 2,516 2,909 4,437 3,594 9,778 5,852 8,603 13,382 10,425 1.5,592 19,508 26,353 Hong Kong 552 482 627 52 -, 1,153 900 654 600 660 723 1,65'7 1,172 Singapore 392 432 839 438 867 716 906 1,082 1,017 1,324 1,436 1,722 Malaysia 300 210 274 172 748 121 524 881 891 667 1,169 2,147 Indonesia 277 175 371 794 1,168 74 2,243 3,683 813 3,056 3,627 1,719 Saudi Arabia 296 171 61 324 601 317 479 155 298 274 388 886 India 54 138 184 - - 679 1 - 2 - - 470 Philippines - 328 519 91 383 405 278 61 - - 8 - Sri Lanka 50 89 - - - 615 328 529 - 2 - 74 Japan 66 45 30 78 224 45 20 147 134 69 71 740 Other 529 839 1,532 1,168 4,634 1,980 3,170 6,244 6,610 9,477 11,52:1 17,423 Rubber 2,232 1,905 1,862 4,573 5,035 3,474 5,297 6,164 8,030 12,351 12,351 10,839 .Japan 1,153 996 1,091 2,464 2,354 1,923 2,805 3,271 4,391 7,220 8,109 7,650 United States 210 216 162 250 342 312 842 854 910 1,123 9931 950 Singapore 134 138 235 707 1,031 446 619 800 1,515 1,816 1,234 717 Malaysia 140 127 190 65:) 508 296 396 423 501 622 5835 354 Italy 207 124 32 9t6 118 17 2 10 - - - - Other 388 304 152 406 682 480 633 806 713 1,570 1,432 1,168 Maize 1,969 2,286 2,085 2,969 6,078 5,705 5,676 3,345 4,275 5,643 7,299 8,328 Japan 878 1, 109 899 9615 2,653 2,252 2,226 754 1,068 1,140 310 65 Taiwan 599 398 570 69L 1,339 355 1,076 804 - 203 550 340 Singapore 152 204 278 366 722 1,337 839 420 686 778 956 1,074 Hong Kong 160 178 155 31'3 384 355 342 382 411 666 501 431 Malaysia 130 116 132 2448 377 433 296 484 773 1,217 1,457 1,504 Other 50 281 51 350t 603 973 897 501 1,337 1,634 3,525 4,914 Tin (Metal) 1,618 1,569 1,664 2,035 3,096 2,247 2,972 4,541 7,229 9,253 11,347 9,099 United States 1,104 1,119 1,003 653 775 1,044 1,064 1,491 1,832 3,185 4,350 2,940 Netherlands 445 405 380 681 1,217 330 983 1,760 3,857 4,341 5,018 4,471 Japan 69 45 281 49Z 774 780 925 1,290 1,530 1,727 1,979 1,361 Other - - - 212 330 93 0 0 10 - - 327 Tapioca Products 1,223 1,240 1,547 2,537 3,836 4,597 7,527 7,720 10,892 9,891 14,887 16,434 Netherlands 723 827 1,190 1,753 2,483 3,664 6,140 6,216 7,053 6,464 9,767 12,222 Germany, Fed. Rep. 267 126 81 145 167 181 188 345 750 546 982 605 United States 113 114 89 102 142 115 121 126 117 97 163 219 Japan 78 93 77 183 538 256 293 313 267 243 313 354 Other 42 80 110 354 506 381 785 720 2,705 2,541 3,662 3,034 Kenaf and Jute 719 935 1,087 1,054 845 643 579 418 448 391 154 78 Japan 207 188 163 116 103 25 66 78 15 24 3 2 Belgium 71 126 90 71 58 34 25 5 8 3 - 1 France 56 72 70 56 65 50 37 1 - - - - United Kingdom 54 68 64 25 37 9 10 6 - 4 - 1 Germany, Fed. Rep. 23 58 40 21 22 13 12 6 5 7 - 6 United States 21 23 19 42 37 34 48 25 40 29 - 22 Italy 36 40 10 16 21 8 10 1 2 1 - - Portugal 21 28 32 21 6 6 4 - - - - Spain 42 7 51 53 4 2 17 14 13 9 2 Poland 20 24 25 22 18 33 19 19 20 9 - - Other 168 301 523 611 474 429 331 263 345 305 149 46 Sugar 94 382 1,264 1,161 3,757 5,696 6,843 7,445 3,969 4,797 2,975 9,571 Malaysia - 11 240 481 131 633 634 695 413 456 112 362 Viet Nam - 111 178 247 - - - - - 1 - - Japan 62 69 85 - 2,120 3,098 4,243 2,753 1,532 2,740 807 872 United States 32 59 93 60 156 1,041 427 - 267 129 559 2,548 Hong Kong - - 43 - 9 1 1 1 - 38 - 12 Other - 76 625 373 1,341 923 1,538 3,996 1,752 1,433 1,497 5,777 /a Preliminary. Source: Bank of Thailand. - 209 - ANNEX 9 Table 4.03 THAILAND A(GRICULTURAL PROCRAM AND POLICY PRIORITIES Minor Agricultural Exports, Average 1966-68, 1974-80 Mung Kopok Castor Raw Ground Soya Fresh Cotton Kopok beans fibers seeds Sorghum cotton nuits beans eggs seeds seeds Sesame Average 1966-68 Volume (tons) 49,629 56,420 104,268 249,830 4,773 30,465 19,057 4,219 95,409 49,643 13,824 Valuie (5-000) 128,434 232,331 261,927 277,744 50,406 128,229 39,218 34,311 130,0?9 73,682 63,775 Unit value (B/kg) 2.59 4.18 2.51 1.11 10.56 4.21 2.6n 8.13 1.36 1.48 4.61 1974 Volume (tons) 90,308 2n,031 27,887 188,562 2,681 4,532 8,612 963 7,017 13,411 13,418 Valtie (B'000) 453,606 195,695 215,385 426,268 21,098 41,772 46,9Q9 15,976 22,938 42,110 95,037 Unit value (B/kg) 5.02 9.77 7.72 2.26 7.87 9.22 5.46 16.59 3.27 3.14 7.08 1975 Volume (tons) 83,222 14,770 23,219 200,059 1,732 5,179 24,055 3,236 10,222 13,946 6,239 Value (B-000) 465,014 170,053 103,149 481,672 21,264 47,954 133,758 52,302 31,189 33,964 60,770 Unit value (B/kg) 5.59 11.51 4.44 2.41 12.2R 9.26 5.56 16.16 3.05 2.44 9.74 1976 Voltnrie (tons) 88,078 20,783 43,430 181,253 2,627 6,662 8,131 1,479 4,346 16,587 8,42/4 'Taloe (8ln000) 945,832 271,313 250,791 373,933 41,347 64,851 47,633 21,327 10,015 39,993 88,088 Unit valuie (R/kg) 1n.74 13.n0 5.77 2.06 15.74 9.73 5.Rf 14.42 2.30 2.41 10.46 1977 Volume (tons) 107,776 15,447 68,568 135,464 2,506 13,946 11,506 4,661 5,789 8,339 11,799 Valuie (B-OOO) 1,058,705 244,308 516,436 298,714 37,883 147,083 82,559 74,729 13,936 25,138 116,611 Unit value (B/kg) 9.82 15.82 7.53 2.21 15.12 10.55 7.18 16.03 2.43 3.01 q.88 1978 Voluime (tons) 16n,608 16,826 36,925 198,065 4,945 20,371 R,098 2,470 19,068 3,258 17,229 Value (B-00) 1,160,743 237,305 2R1,127 371,702 99,941 192,384 51,295 37,195 L1,496 ln,155 204 363 Unit value (B/kg) 7.23 14.10 7.61 2.35 20.21 9.44 6.33 15.06 2.18 4.Al 11.86 1979 Volume (tons) 177,554 18,720 "5,421 167,034 4,540 15,978 9,715 1,302 24,661 2,10n 14,639 Value (Bo000) 1,375,205 263,583 204,574 494,801 88,151 197,404 68,26n 21,646 62,573 5,693 252,082 IJnit valtue (B/kg) 7.75 14.08 8.05 2.96 19.42 12.35 7.03 16.63 2.54 2.70 17.22 1980 /a Volume (tons) 185,822 14,546 - l8n,592 11,266 3,028 3,379 709 40,749 - 9,990 Value (R'OOO) 1,447,070 240,419 - 659,882 353,476 60,658 27,260 11,474 99,697 - 160,990 Unit value (8/kg) 7.79 17.15 - 6.65 31.38 20.03 R.07 16.18 2.45 - 16.12 /a Preliminary. Source: lepartment of Customs. THAIL rAND AGRICILTIURAL PROGRA-I AND POLICY PRIORITIES Volume of Rice F.xports by Grades, 1965-80 (metric tons) 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1979 1979 1980/a Rice, cargo, 10% 47,835 35,223 1,435 6,975 2,450 4,170 11,720 20,382 22,879 1,538 6,114 9,389 11,911 11,186 13,799 26,975 Rice, cargo, broken 38,843 9,411 3,664 2,129 3,020 960 10,632 4,996 583 - - 210 - - - - Rice, white, 100% 275,024 214,076 198,531 77,528 216,804 253,665 293,718 332,914 114,981 182,481 172,899 278,403 42S,839 326,333 486,263 763,888 Rice, white, 5% 93,277 80,001 29,181 15,264 13,569 12,704 8,535 8,697 207 14,187 4,635 43,Sn4 0,341 72,112 72,099 177,943 Rice, white, 10% 70,279 16,411 19,770 3,053 6,543 7,908 125,956 209,467 36,909 211,682 67,075 103,018 333,393 190,206 566,797 315,665 Rice, white, 15% 72,254 6,248 17,319 41,252 19,158 90,526 48,077 35,144 119,917 62,046 49,105 278,739 157,532 3,880 29,235 49,413 Rice, white, 25X 90,524 91,473 sq,057 40,041 24,191 143,215 126,251 447,223 121,502 160,312 39,303 419,057 726,391 122,975 532,279 481,927 Rice, broken, Al Super 241,339 244,402 277,732 166,324 147,126 85,735 83,424 89,048 76,336 56,966 121,858 100,922 288,042 107,705 174,160 o Rice, hroken, Al Special 42,226 53,077 60,362 33,073 40,163 79,745 164,979 219,981 132,674 95,524 29,056 140,170 81,433 92,417 253,383 Rice, hroken, Cl Special 9,845 3,956 7,153 6,961 6,969 4,730 4,446 2,950 - - - - - - - 504,653 Rice, broken, Al Extra SRper - 18,748 22,851 12,271 16,672 9,818 12,509 32,879 14,817 19,349 8,464 8,623 9,593 8,634 15,012 Rice, glutinous, 10% 29,378 29,340 55,595 47,165 80,823 59,208 75,956 76,247 20,8?1 31,491 44,792 99,466 137,068 34,020 74,670 82,267 Rice, glutinous, broken 14,015 11,983 28,272 12,253 36,181 18,608 26,771 19,719 6,361 3,51S 2,962 4,551 3,892 1,448 2,975 Rice, parboiled 492,989 198,303 342,5n0 266,601 323,551 266,709 366,475 346,678 144,R70 147,417 338,070 318,361 600,395 593,(59 467,569 292,282 Other 427,495 294,899 359,050 230,293 85,944 27,118 225,697 272,989 35,940 42,864 67,927 169,559 162,604 42,752 108,628 21,684 Total 1,895,223 1,507,550 1,482,372 1,068,195 1,023,064 1,063,616 1,576,142 2,112,114 849,717 1,029,273 951,260 1,973,391 1,946,434 1,606,732 2,796,969 2,716,702 /a Prexininary. Source- Rank of Thailand based on C-,stoxs Department Statistics (1965-1973). Bank of Thailand based on Foreign Trade lepart.ent (1980). 5 . 0 4 00 0-4-44004+4+0+0 oOO4+000007700-4+0+- 444+7-,440400004-,,'0--oaaoOoOO-o0o0 5 4 o4000074'1D+40C1C4 0404040 4-4444444444444 Cl 4'-o4'1444-44-44+000444 CD 00 4'ICD '0-…-o 04074-4-04-4 a',0o-D4-14-D * - CO -' 44CD4404'4 444740 44444CD44D4 4 00,,-'C40'+.-o,- 044004 C-'04-'4+ C000 4½,- 4- '4 -C, CD4-040+ CD - 44 4044100+00 4 4 4 Cool 0 4 -4-1'--C0--; '-I 4 0 '+-+ - 10C4C4I44 -44000'0 +04 44+4C4400440 1 4 04 -C-oS-A 040+40o0o 0 0 00 - 4 +4 0 04 040404D +D4+CI 04044-OCD4 444044 C' 0 -- 44 0 0+ 0 4 Coo- - 04+144.4. -l 7o4tC - - 004 4 0+ 14-4 COO DO"- OCOC4D+ DC 4+744 44C404400D0++-4+00 7C-D-14 0 000 = 70,- '440 DO -C CDD440'00+0440 4 'C ,D,0- oo-,-00- 440.1 4 4 4. 0 4-CD40-C04+-' 0'I0CD- 4-14+104+004-4 4 CC +4 0 4-00 0 0+4+004- Ct 0 4 0740.404+ 44444 Ct 0+440 -00 CD >o4+,-4 -14 0 00+74444 0 4+ -1 0474+4+40 4+44 Cot 74'-ooa4 - 4+ -CO 44+ -4+ - 4+0CDD444+44+CD4CCDCD4 4 - 0 -o+0 14+4 4+ '014+4 40 41' C4 - 4+ 4 04+4+ CD 0-10-C 4-+--14+0 4 - 0 4+ CD C4CCt .04000404'- 4+ 4 4+4 000-D- -+00 - 4 7 4 00 4 0-0'1004+000 0 CD 40+4+'44o0a7oo-+ 4 4 4 4 404+4 4-40.4 0 C0 4+4+4C4+-O4+0000 0 COCO 4+ CO +0000000 CO 0+ -04044444044 4 4 a-- 0 0070 0---4+ 0 - - -000004+000'04+ 4 oCD4+4 444 0+4 00+0 00 004+0 1404+4444+- 40+-. 000 4+0 COOCO 0C 0000 4+ OC OC 000000004000- 0 4 0000+0+404+4004+4 4 4 0 44404 CO 040+44 CD 4 4 - - - 4+'0+-+ 0+04 4' 0 4470 -1 0 '0 - - - - - - - -14 0-'-- -4+4044 - 4 0 04+04+04+000+0040 0 4+ O4CDO 4 0 CD 4+04+04+0 4+4+0000 +D00 404+ -- 4 4 CD 0 0 0 OD' 00t+- 4-0 4+ - 4 0-00 4 0+0 00+0+- 0 4 004- 0 0004+ COoo4+4++0o4+0000000 0+44 4 - 0+ oO4+CD4+000'0 - 000 4+0 04+00 0000 0 0 0 00 0 0 0 000000 ',04 00 4+7-0-0 + 0 04+0 00 0004+004+0 0 0,0+00 0 0 0 000000 0 4+ 4+ 4+ 4+4+4+10 -40 -1-17404 0 0 - - - 00+0 044-144 4 - 4+4+ 4+'0 4+4+0+0'00- 400+0 044414 4 'I 4+0 00 -4+004+0040 4 0 -04+ 44 0 - 0 0 77 000+o 0+ 0 0 0 '0+00,- 7 7 40+44  4 4+40o 4 0 44 0 4+ 4+04+ 0 4 4+47 0 0004+004+4+-+004+004+C+0-O4+4+--0 4 0 14044+0 C- 0 000 00 0+04+0 4+04+0 0 0 0 000004+004+4+0+ 4+40 4 0-10 0+ 0 4 00000+4+000+0000 0 0+0 Coo o 0 0 000000 4+ 0 0 C, 4oo44 0 44 044+ 0+ '1 0 4. 0 40+ 0+ 4 4 0 0 0 4 7 7-1 4 0+ 4+ CO 4+ 4+4+4+0 0 4 0 44+ 0+ 4 - - - - - - - 7 0 00004+0 0 1+ . 4 4+ 40 - 4+40+40- - 4 - 000000000040 4+ - 0+7 4- 44+4+4+ 4-4 4 4+ 44-4 4+ - - o.-+-,-4+4+ 0 4+ 0+- 4+ 7 7 - 4- 4-44 0 o 0+ 0 - - '000 44 7 0 '0 - 0+4-440+000 0+ 100 00+ OOOo 0+0+o4+ 7 7 oo 77004+4+4+'0' 0 04 0 0 4+ 0 0 414 0 000 04+00000000+0 0 0 00 0 0 0 000000 0 4 4+4-4+4-0404+7000 00 +0000 0000 0 0+0+00 0 0 0 000000 4+ 4+ 7 '-0 0 0 0- -0000 4 '4 0+ 4 0 4 0 4+ 0 - 00 4 00 0 7 04 0 4+ - - - - - - - -'40 0 4+ 0+40o4 4 4 Oj C 04+4+4+4+4+4+0+4+4+00 -0- 0 - 0 o4-044 4- 4+ - '04+0+0 4+ 4+ 4+00+00 0 4 4 -- C¶[C - - 00 0-4 00 000o00 0 0 4+ 00+040 0 00 00 00 000000 4+ - 0- -1 44+-0C'4 0 0 - 0-0-54 4+'- 0 0 4- 4 4 0 00+ - 0+ 4 - 4+0 4 40+ C0O 4 4 000000+0+4+00000+0 0 00 0 0 0 000000 4+ 0 I 0 0+ 4+-'0-04+0- C*00 4+000'004+4+4+004t04+4+ - 4 400 40 4 0 +00 004+0000000 0 0+0+00 0 0 0 000000 - - 4+ 0 4- 4 -1 0 4- - 04-00 00 0. - 0 4+ 700 0 0 0+ 0+4-1 4- 0 44 0 '0 -7-7-0-4+774+4+ 4 4 0 0 4+o4 4 - 4+4+04+4+4+00+4+4+4+0 0 - 4 40 4+ 0+ 00 00 00+ 004+00+0 00- 0+ 0 0 4 044+ '0 4+ CO 0 0 4-4 + --'0- 4+4+0'0 0+4+4+4+ 4+ -+ 0'0'04+4+0+0000 000 0 0 4 +00 00 +0000.004+0 0 0+0+00 0 0 0 0004+004+4+ 40 07 -1 4+ 44 0 0 0 4+0004+ 04 0 +7 +0 +07700 7 0 '0'0 '0'0 C- 004+0004+ '0 0 0 4+- 00 00 4+04+0 0+ooo 0 0 0 00 0 0 0 00004+00+04+ '04+ 00 +0000'0000 00' 0.00 0 0 0 000000 - 4' 4 lCD 0 0 4 4 4 4 0+44 0 0 4+ +0 4+ 4+ 4+0 CC 4 0 Co +0+ C +44+ oC 4 4 0 700 00 004+0000000 0 000+00 0 0 4+ 00004+0 - 4- 4 4 4 C 4 0 0 'I 7 0 0 0 0 4 0 0 0 0 0 + 0 0 4 O - 4 - 4+4+0 00 0000000000 0 000 04+ 4+ 0 0 000000 700 CD 0 4- 4- 000 00 0000000000 0 000+00 0 0 0 ooooOO - 0 + I 0 0 0 0 4+ 004 +00 00 0000000000 0 OCt'00 4+ c c 000000 4 40 ANNEX 9 - 212 - Table 4.06 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Cattle and Buffalo Exports Value (million Baht) Total as % Quantity ('000 head) agriculture Year Cattle Buffalo Cattle Buffalo Total layouts 1967 11.0 40.0 17.1 76.1 93.2 0.8 1968 8.0 23.0 12.6 49.1 61.7 0.6 1969 9.0 26.0 15.1 49.7 64.8 0.6 1970 9.0 26.0 15.6 57.2 72.8 0.7 1971 12.0 25.0 22.7 68.4 91.1 0.7 1972 18.0 25.0 39.3 76.2 115.5 0.7 1973 26.0 20.0 58.4 80.2 138.6 0.6 1974 18.0 11.0 57.8 57.2 115.0 0.3 1975 12.0 12.0 45.8 73.0 118.8 0.4 1976 12.8 16.1 47.9 99.3 147.2 0.3 1977 24.4 17.4 106.0 108.5 214.5 0.4 1978 27.7 22.8 113.6 137.8 259.4 1979 24.7 18.1 104.8 102.4 207.2 1980 48.5 5.0 49.6 30.9 80.5 Source: Office of Agricultural Economics, Ministry of Agriculture and Cooperatives. - 213 - ANNEX 9 Table 4.07 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Cotton - Imports and Exports, 1960-80 Imports Exports Trade balance CIF Unit FOB Unit Volume value value Volume value value Volume Value Year (mt) (B 000) (B/kg) (mt) (B 000) (B/kg) (mt) (B 000) 1960 4,887 58,933 12.06 17 200 11.76 -4,870 -58,733 1961 8,681 110,714 12.75 22 293 13.32 -8,659 -110,421 1962 7,741 98,645 12.74 - - - -7,741 -98,645 1963 9,250 11,176 12.02 216 1,841 8.52 -9,034 -109,335 1964 10,472 124,333 11.87 - - - -10,472 -124,333 1965 27,714 201,509 11.80 - - - -24,714 -291,509 1966 24,212 295,429 12.20 - - - -24,212 -295,429 1967 24,715 277,475 11.23 16 138 8.63 -24,699 -277,337 1968 22,305 225,369 10.10 3,371 42,948 12.74 -18,934 -182,421 1969 17,183 199,425 11.61 5,775 61,971 10.73 -11,408 -137,454 1970 40,265 477,988 11.87 267 2,081 7.79 -39,998 -475,907 1971 48,011 679,622 14.16 119 1,181 9.92 -47,892 -678,441 1972 48,530 727,064 14.98 270 3,769 13.96 -48,260 -723,295 1973 84,901 1,316,735 15.51 302 4,044 13.39 -84,599 -1,312,691 1974 62,329 1,465,250 23.51 42 1,513 36.02 -62,287 -1,463,737 1975 77,002 1,670,358 21.69 - - - -77,002 -1,670-358 1976 82,668 2,167,377 26.22 16 190 11.88 -82,652 -2,167,187 1977 90,650 2,880,551 31.78 101 2,476 24.51 -90,549 -2,878,075 1978 69,722 2,023,506 29.02 1,169 34,864 29.82 -68,553 -1,988,642 1979 92,115 2,720,651 29.54 282 9,393 33.31 -91,833 -2,711,258 1980/a 73,387 2,519,800 34.30 7,868 285,505 36.29 -65,519 -2,234,295 /a Preliminary. Source: Department of Customs. ANNEX 9 - 214 - Table 4.08 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Vegetable Oil Imports and Exports, 1957-80 Imports Exports Trade balance ('000 ('000 (-000 Year liters) (B '000) liters) (B 000) liters) (B 000) 1957 624.9 6,015.7 1,062.8 8,564.9 +4-37.8 +2,549.2 1958 1,079.5 8,496.4 818.2 6,277.7 -261.3 -2,218.7 1959 2,097.2 16,474.3 1,504.4 10,758.0 -592.8 -5,716.3 1960 951.2 7,837.5 248.2 1,886.2 -703.0 -5,951.2 1961 836.4 7,636.8 1,466.9 11,231.2 +6C)3.5 +3,594.5 1962 1,680.9 11,944.6 2,416.8 16,925.7 +7-35.9 +4,981.2 1963 1,131.3 9,447.7 1,021.4 5,972.4 -109.8 -3,475.3 1964 2,979.6 20,779.2 833.9 3,921.7 -2,145.6 --16,857.5 1965 2,306.6 18,618.9 1,255.7 6,835.6 -1,O05O.9 --11,783.3 1966 1,554.1 13,218.8 2,593.3 12,889.8 +1,039.2 -329.0 1967 2,439.1 18,667.4 1,377.8 8,711.6 -1,061.3 -9,955.8 1968 2,580.3 21,271.1 152.4 773.8 -2,427.9 --20,497.4 1969 6,238.1 37,627.8 328.8 2,184.0 -5,909.3 --35,443.8 1970 1,894.1 17,182.8 1,961.7 12,765.4 +67.7 -4,417.4 1971 2,169.9 19,118.4 2,986.6 16,775.5 +816.6 -2,342.9 1972 2,125.0 18,072.7 1,467.2 7,073.8 -657.9 -10,998.9 1973 3,267.3 29,183.3 3,295.4 31,495.9 +28.1 +2,312.6 1974 1,736.6 29,228.8 2,379.0 36,856.9 +642.3 +7,628.1 1975 4,121.8 51,679.5 3,879.3 40,525.8 -242.5 -11,153.7 1976 10,168.6 112,968.5 3,953.3 37,524.6 -6,215.3 -75,443.8 1977 18,835.0 217,036.3 2,090.8 19,845.4 -16,744.2 -197,190.9 1978 13,906.7 187,329.0 3,127.4 30,116.0 -10,779.3 -157,213.0 1979 24,535.1 376,192.8 1,013.9 14,955.8 -23,521.2 -361,237.0 1980/a 95,546.3 1,365,693.6 10,939.2 215,753.5 -84,617.1 -1,149,940.1 /a Preliminary. Source: Department of Customs. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Consumer Price Index for Wlhole Kingdom Old Series (October 1964-September 1965 = 100) New Series (1976 = 100) Weights /a 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 Weights lb 1974 1975 1976 1978 1978 1979 All items 100.0 113.6 113.5 114.0 119.6 138.1 171.7 180.8 188.4 201.9 218.8 100.00 91.2 96.0 100.0 107.6 116.1 127.6 Food 49.5 123.6 121.6 119.3 127.8 153.7 198.8 209.1 218.4 236.6 260.2 43.68 91.0 95.7 100.0 109.4 119.1 129.9 Nonfodd 56.32 91.1 96.2 100.0 104.9 112.0 123.8 Clothing, 12.1 101.6 103.1 106.2 108.7 125.9 149.7 158.0 163.0 171.4 179.2 8.10 91.8 96.9 100.0 104.3 109.6 124.6 Housing 15.5 106.2 108.2 110.5 112.9 125.8 146.0 151.4 156.0 165.3 174.5 22.32 93.6 97.0 100.0 105.5 111.2 122.1 Personal & medical I care 7.0 105.2 105.6 109.8 114.4 118.7 134.1 144.8 146.5 154.9 169.6 6.40 91.5 98.8 100.0 106.4 115.1 123.0 Transpor- tation 4.9 99.4 100.1 104.3 106.1 115.0 159.0 169.2 185.3 191.7 208.3 7.37 85.8 91.3 100.0 103.1 118.4 138.2 Recreation, reading & education 6.1 103.0 103.9 109.4 112.5 121.2 138.4 148.3 155.1 161.4 168.0 8.18 89.2 95.6 100.0 102.9 109.5 120.9 Tobacco & alcohollc beverages 4.9 100.6 100.9 102.0 102.4 105.4 121.8 126.8 133.7 142.3 146.6 3.95 91.4 96.2 100.0 107.1 110.0 113.0 /a Weights and selected items are derived from a family expenditure survey conducted In 1962 among families of two or more persons in all occupational groups - except those whose main source of income is from agriculture - with annual incomne rangtng from B 3,000 to B 60,000. /b Weights and selected items are derived from a socio-economic survey conducted only in urban areas in 1975/76 among familtes of two or more persons, btit not over 10, annual income ranging from B 1,000 to B 5,000. v Source: Department of Business Economics, Ministry of Commerce. o QD - 216 - ANNEX 9 Table 5.02 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Consumer Price Indices by Region /a (1976 = 100) Weights 1974 1975 1976 1977 1978 1979 Whole Kingdom 100.0 91.2 96.0 100.0 107.6 116.1 127.6 Bangkok Metropolis 35.0 91.5 95.3 100.0 108.4 117.9 130.0 Center & East 23.0 90.8 95.6 100.0 107.0 113.4 125.0 North 16.0 89.8 96.1 100.0 106.7 115.0 124.1 Northeast 15.0 93.6 97.7 100.0 105.7 114.0 123.3 South 11.0 88.9 96.2 100.0 106.0 113.6 125.2 /a Derived from a socio-economic survey conducted only in urban areas in 1975/76. Subindices are compiled for each region separately and are weighed by municipal population to arrive at the overall index for the Kingdom. THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Price Indices (Annual) Old index (1968=100) New index (1968=100) 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1974 1975 1976 1977 1978 1979 Wholesale Price Index for Thailand /a Agricultural products 104.5 100.5 98.4 109.4 134.6 170.4 190.0 199.5 204.6 206.6 - 85.4 95.2 100.0 110.0 112.2 118.8 Foodstuffs 98.9 93.7 95.1 106.8 134.4 180.1 184.4 192.9 205.2 203.4 - 93.4 95.6 100.0 104.8 115.0 120.3 Beverages 99.8 105.4 111.0 113.4 117.2 131.8 142.5 145.0 139.8 149.0 - n.a. n.a. 100.0 101.0 107.3 113.2 Textiles and textile products /b 104.6 106.8 107.6 110.9 129.3 160.6 140.9 145.6 155.6 163.9 - 110.3 96.8 100.0 112.5 117.9 135.5 Construction materials 103.2 105.7 102.6 106.7 143.3 196.4 199.9 202.8 212.9 220.6 - 96.8 98.6 100.0 108.0 118.4 146.1 Chemicals and chemical products /c 108.8 116.1 120.0 127.8 158.0 211.1 217.9 198.9 194.9 204.2 - 106.1 109.5 100.0 106.1 112.2 128.5 Petroleum products 99.8 99.1 103.7 104.9 116.7 214.4 219.4 219.1 243.8 262.7 - 97.9 100.1 100.0 108.2 118.4 163.7 Paper and paper products 103.8 104.1 105.7 108.0 137.9 181.3 188.7 182.3 183.4 184.9 - 99.4 103.5 100.0 101.0 103.3 119.0 Hide and leather products /d 102.1 99.5 98.3 114.5 152.4 160.5 155.5 156.7 165.1 188.2 - 102.4 99.2 100.0 104.1 119.4 165.3 Rubber and rubber products 119.2 103.4 88.6 89.3 143.8 147.8 133.0 163.0 168.2 173.8 - 90.7 81.6 100.0 102.0 102.8 117.7 Transportation equipment 100.3 108.9 120.0 132.2 155.9 189.7 209.2 216.9 223.2 234.5 - 87.5 96.4 100.0 104.5 120.9 131.2 Machinery and equipment 100.4 104.2 106.8 110.2 129.9 158.3 162.2 175.7 199.2 213.9 - 90.1 92.3 100.0 107.0 116.4 119.1 Miscellaneous 107.7 117.1 112.1 117.2 134.2 176.5 159.3 170.7 205.3 283.6 - 103.4 93.3 100.0 126.8 165.9 165.1 Special Groups Domestic commodities 103.3 99.3 98.4 107.8 133.6 175.4 182.6 191.4 202.8 216.7 249.8 - - - - - - Imported commodities 103.3 110.8 113.4 118.9 143.9 177.8 182.4 186.0 193.0 192.4 204.4 - - - - - - Exported commodities 112.5 107.8 103.9 111.7 154.9 195.4 190.4 202.4 218.5 246.3 292.7 - - - - - - All items 103.3 102.8 103.1 111.2 136.6 176.1 182.6 189.8 199.9 209.4 236.5 92.8 96.2 100.0 107.8 115.8 128.8 /a The new wholesale price index with base year 1968 has been reported by the Department of Business Economics since January 1971. This index includes the prices of 256 representative commodities, which are collected from markets in Bangkok-Thonburi and nine major provinces. The new series are not available for the years before 1968. The old index with with base year 1958 includes the prices of 55 items, of which 21 are agricultural products and foodstuffs. These prices were collected in the Bangkok-Thonburi area. m /b Heading for old index is "Cloth.' a Th Heading for old index is "Chemical Products." /d Heading for old index is "Leather." 7T Weights and selected items are derived from a family expenditure survey conducted in 1962-65 among families of two or more persons in all occupational groups (except those whose main source of income is from agriculture) with annual income ranging from 3,000 baht to 60,000 baht. ThAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Average Wholesale Prices (Bangkok) of Selected Agricultural Commodities, 1960 80 (Baht per metric ton) 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1971 1974 1975 1976 1977 1978 1979 1980 Nonglutinous, paddy, no. 2 /a 845 905 1,096 954 762 834 1,197 1,235 1,151 1,093 1,011 848 1,101 1,538 2,248 2,310 2,254 2,261 2,469 2,584 3,159 Nonglutinous, rice, 52 /a 1,486 1,633 1,893 1,682 1,544 1,536 2,086 2,398 2,001 2,205 1,905 1,578 1,974 2,865 3,773 3,723 2,822 3,865 4,250 4,522 5,671 Nonglutinous, rice, 20% /a 1.186 1,450 n.a. n.a. 1,349 1,396 1,882 2,120 1,833 1,747 1,614 1,429 1,718 2,408 3,680 3,520 3,641 3,610 3,849 4,196 5,155 Al broken (super) /a 956 1,237 1,441 1,324 1,008 1,068 1,648 1,650 1,620 1,186 1,197 1,022 1,513 1,962 2,808 2,982 2,480 2,785 2,842 3,026 3,928 Glut inous rice, 10% /a 1,700 1,348 1,536 1,535 1,501 1,946 2,289 2,134 2,044 1,730 1,172 1,136 1,762 3,055 3,440 3,540 3,740 3,234 5,068 4,016 - Maize /b 1,010 1,108 989 1,027 1,042 1,203 1,125 1,165 971 1,105 1,230 1,189 1,160 1,785 2,543 2,482 2,208 2,091 2,142 2,626 3,050 So rgh :11- -.. , n-- n_a_ 890 1 oo gin n im7 1,000 867 152 n.i 2a133 1,983 rn90n 1 921 1,969 2416 - Mungbean, large /b 1,992 2,350 3,030 2,890 2,460 2,100 2,570 3,330 2,940 2,520 2,167 2,967 3,167 3,367 4,500 5,217 8,433 8,200 6,199 7,196 - Cassava flour (tapioca flour) /b 2,081 1,920 2,351 1,896 1,672 1,839 1,964 1,951 1,792 1,757 1,813 2,140 2,236 2,717 3,747 3,506 3,429 3,688 3,250 5,884 5,770 Castor bean, , good /b 2,921 2,610 2,040 2,410 2,400 2,170 2,090 2,680 3,100 2,600 2,350 2,550 3,883 8,530 5,510 4,100 5,333 6,700 7,371 7,343 - Sesame (black), good /b 4,700 4,400 3,490 4,230 4,960 4,880 4,620 5,310 5,140 4,990 4,867 4,900 6,033 7,867 7,700 10,033 12,367 12,317 11,219 13,174 - Croundnuts (shall- ed), good /b 4,128 3,510 3,590 3,680 4,110 4,100 3,660 4,370 4,340 4,200 4,100 4,117 5,417 6,637 8,583 9,050 8,717 12,383 12,809 13,039 - Soybean, Cbhengmal, good /b 1,890 2,580 2,420 1,930 1,980 2,680 2,500 2,370 2,420 2,410 2,433 2,617 3,100 5,600 5,217 5,300 5,767 6,567 5,704 6,296 - Cotton 7/b 3,760 4,380 3,660 3,350 3,330 4,080 3,260 3,760 4,370 4,090 4,020 4,910 5,550 7,230 10,080 7,340 10,200 10,133 9,270 12,470 - Kapok ( ginned), good /h 6,022 5,606 6,499 7,004 6,754 5,830 5,413 5,004 7,563 7,642 8,717 9,967 8,850 9,050 11,217 11,467 13,233 13,433 13,206 12,956 - Kenaf, high grade /b 3,196 3,583 2,343 2,733 2,850 3,019 3,311 1,975 2,526 3,040 2,967 3,650 4,861 3,765 3,630 3,981 4,500 5,838 5,148 5,784 6,362 Sugarcane /c n.a. 110 118 120 146 119 96 141 176 136 141 143 145 162 216 300 300 300 297 323 n.a. Rubber, no. I /d 12,849 9,593 8,733 8,124 7,776 8,111 7,617 6,003 6,387 8,139 6,740 5,495 5,500 9,880 9,753 8,510 10,941 11,870 13,950 17,620 19,040 Ruhher, no. 3 7d 12,601 9,336 8,463 7,891 7,584 7,930 7,446 5,851 6,237 7, 995 6,580 5 ,295 5,300 9,680 9,553 8,310 10,841 11,760 13,850 17,520 18,940 /a Department of Internal Trade, Ministry of Commerce. 7b Department of Business Economics, Ministry of Commerce. T Sugar Institute. 7-i Rubber Division, Ministry of Agriculture and Cooperatives. I^19 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Average Wholesale Prices of Livestock and Livestock Products, Bangkok, 1960-80 (Bahts) - Live Live Live Buffalo Beef Pork Duck Salted Hen Year buffalo cattle hog carcass carcass carcass Ducks Chicken Capon Geese eggs duck eggs eggs (head) (head) (kg) (kg) (kg) (kg) (head) (kg) (kg) (head) (100) (100) (100) 1960 1,175.00 1,125.00 6.30 5.50 5.50 7.34 9.95 11.42 14.18 12.60 50.00 65.88 52.88 1961 1,199.60 1,150.69 6.66 6.10 6.53 8.12 11.44 9.58 16.66 12.46 46.45 52.31 52.50 1962 1,145.42 1,189.20 6.33 6.75 7.25 8.82 9.55 9.64 17.35 12.50 57.77 65.72 - 1963 1,126.95 1,183.55 6.04 6.75 7.19 8.64 9.77 10.91 17.94 13.09 52.69 65.20 56.23 1964 1,142.00 - 7.28 6.69 7.27 8.95 9.40 10.94 14.58 23.78 40.85 51.28 45.98 1965 1,266.28 1,105.44 8.08 6.75 7.45 9.72 11.95 11.10 13.82 27.99 40.10 45.17 45.42 1966 1,381.67 1,259.41 7.07 7.09 8.08 8.38 10.08 11.04 13.31 24.39 54.16 61.00 55.78 1967 1,667.52 1,432.13 7.99 7.72 9.07 9.99 12.57 11.86 14.33 32.10 56.99 68.70 53.32 1968 1,701.10 1,500.95 9.61 7.81 9.30 11.17 11.04 14.09 15.12 36.87 52.28 64.16 45.97 1969 1,784.45 1,717.67 9.73 7.99 9.59 11.62 9.89 12.38 12.68 31.48 50.00 60.20 45.14 1970 2,504.10 - 7.58 8.20 10.00 9.32 9.85 12.75 13.49 35.83 46.15 56.32 45.11 1971 2,464.19 - 7.53 8.20 10.00 9.06 8.79 11.56 12.61 30.20 42.29 53.82 43.10 1972 2,039.40 2,014.32 9.78 8.78 10.06 10.72 8.38 12.31 13.85 30.45 45.15 51.17 47.29 1973 2,742.30 2,362.36 10.63 10.03 11.71 11.52 12.06 13.00 15.38 38.79 68.54 79.29 62.51 1974 4,217.40 3,748.36 17.11 15.43 17.52 19.51 19.90 15.98 19.53 57.31 103.73 119.79 89.11 1975 4,351.05 4,453.68 15.37 18.01 22.72 18.15 20.97 16.19 20.45 58.83 92.00 114.84 79.99 1976 4,306.50 4,262.72 15.54 17.57 23.77 17.69 17.10 16.44 20.51 56.60 94.20 127.57 96.66 1977 4,410.45 4.090.24 18.58 16.75 20.96 20.50 16.15 18.70 21.76 73.06 97.48 128.85 91.05 1978 4,539.15 4,077.92 14.25 16.89 19.96 17.50 18.43 18.33 21.85 63.20 111.17 140.46 102.57 1979 4,979.70 4,795.56 18.68 18.67 21.54 21.41 20.47 20.24 25.99 85.82 121.05 151.68 115.14 1980 5,940.00 5,500.88 21.97 20.49 23.73 25.24 20.91 25.00 26.38 94.67 133.42 165.49 123.81 Source: Office of Agricultural Economics, Ministry of Agriculture and Cooperatives. H lb 0m - 220 - ANNEX 9 Table 5.06 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Average Wholesale Prices of Fish, Bangkok, 1971-81 (Baht per kg) 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 Fresh-Water Fish Snakehead 10.39 12.89 13.23 19.07 16.32 18.34 21.13 22.22 24.95 31.08 29.47 Catfish 9.61 11.78 13.51 22.15 22.39 20.14 23.59 24.55 24.90 37.11 25.47 Climbing perch 5.46 7.06 8.86 12.50 9.84 9.86 11.11 10.90 13.58 16.50 15.55 Carp 3.00 - 5.26 - - 10.77 11.93 14.39 13.19 16.74 15.05 Fresh Marine Fish Chub mackerel 5.12 7.41 8.04 11.75 10.89 13.19 13.86 16.72 11.07 11.86 15.08 Spanish mackerel 8.73 9.81 12.55 16.61 17.19 18.97 22.25 25.72 23.43 26.54 32.88 Trevally 4.80 5.68 5.72 8.07 8.51 8.07 8.41 9.60 9.26 11.77 4.06 Shrimp 30.54 32.72 39.10 33.43 40.77 59.93 61.22 61.50 72.36 62.32 79.36 Shellfish 1.33 1.61 1.96 2.40 2.22 2.38 2.50 3.26 3.27 3.76 4.21 - 221 - ANNEX 9 Table 5.07 T HAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Development of Producer Prices of Major Commodities in Thailand,/a 1967-81 (B/kg) Producer prices Sugar- Mung- Year Paddy cane Rubber Tobacco Cassava Maize Sorghum beans Kenaf Cotton 1967 1.25 n.a. 5.06 13.28 0.47 0.82 0.89 2.61 1.61 3.50 1968 0.97 0.11 5.49 13.46 0.33 0.71 0.75 2.73 1.89 3.75 1969 0.86 0.11 6.94 15.27 0.54 0.76 0.79 1.81 1.31 3.64 1970 0.63 0.11 5.72 15.18 0.47 0.84 0.84 2.30 1.68 3.85 1971 0.80 0.11 4.74 15.09 0.52 0.70 0.75 2.24 2.24 3.87 1972 1.31 0.11 4.77 15.74 0.47 0.86 0.91 2.57 2.83 4.45 1973 1.96 0.13 6.86 21.69 0.34 1.35 1.16 2.68 2.62 5.46 1974 2.23 0.18 7.38 21.74 0.30 2.06 1.85 1.54 2.35 6.75 1975 1.98 0.25 6.42 23.50 0.41 1.85 1.69 3.74 2.65 6.39 1976 1.87 0.28 9.15 24.14 0.46 1.67 1.49 4.98 2.99 6.07 1977 2.12 0.27 9.49 29.98 0.46 1.61 1.51 6.99 2.63 7.57 1978 2.53 0.27 10.74 30.24 0.36 1.64 1.53 5.64 2.91 - 1979 2.40 0.30 14.55 36.38 0.74 2.04 1.93 5.69 3.13 9.10 1980 3.75 0.43 16.12 44.79 0.78 2.40 2.28 5.52 3.85 8.83 1981 3.43 0.59 14.49 36.20 0.45 2.36 2.57 5.59 3.25 8.50 /a Average for whole Kingdom. Source: Ministry of Agriculture, Office of Agricultural Economics. ANNEX 9 - 222 - Table 5.08 THIAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Fertilizer Nutrient Price and Selected Nutrient to Crop Price Ratios Nutrient price, B/kg Nutrient:crop price ratio 16-20-0: 21-0-0: 13-13-21: 21-0-0: 15-15-15: Year 21-0-0 16-20-0 13-13-21 15-15-15 Rice Sugarcane Sugarcane Cassava Cassava 1968 9.76 6.75 5.62 6.20 6.96 88.73 51.09 29.58 18.79 1969 8.90 6.39 5.51 6.04 7.43 80.91 50.09 16.48 11.19 1970 8.90 6.61 5.51 6.04 10.49 80.91 50.09 18.94 12.85 1971 8.81 6.25 5.64 5.84 7.81 80.09 51.27 16.94 11.23 1972 8.81 6.72 6.26 6.11 5.13 80.09 56.91 18.74 13.00 1973 12.14 9.36 8.47 7.76 4.78 93.38 65.15 35.71 22.82 1974 16.67 13.89 10.64 10.89 6.23 96.61 59.11 55.57 36.30 1975 15.39 12.94 11.04 11.58 6.54 61.56 44.16 37.54 28.24 1976 7.50 8.61 8.65 8.86 4.60 26.79 30.89 16.30 19.26 1977 9.52 8.75 7.73 8.18 4.13 35.26 28.63 20.70 17.78 1978 11.20 7.01 7.88 8.29 2.77 41.48 29.19 31.11 23.03 1979 12.09 11.18 9.09 9.50 4.66 40.30 30.30 16.34 12.84 1980 16.05 13.96 12.27 11.79 3.72 37.33 28.53 20.58 15.12 1.98E1 17.58 14.54 12.25 12.83 4.24 29.80 20.76 39.07 28.51 Source: Office of Agricultural Economics, MOAC. - 223 - ANNEX 9 Table 6.01 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Land Utilization, Whole Kingdom, 1959-80 (Rai '000) Farm holding land Unclassi- Total Forest Paddy Field Tree fied Year land land Total Housing /a crops /b crops Other /c land 1959 321,250 177,433 60,836 n.a. 38,526 5,891 5,814 10,604 82,982 1960 321,250 176,460 62,617 n.a. 38,802 6,962 5,854 10,999 82,173 1961 321,250 175,487 65,999 n.a. 39,373 8,721 5,946 11,959 79,764 1962 321,250 172,611 68,979 n.a. 39,812 9,488 6,608 13,070 79,660 1963 321,250 169,893 69,549 n.a. 40,317 10,429 7,523 11,280 81,808 1964 321,250 166,985 76,187 n.a. 40,858 11,400 8,440 15,489 78,077 1965 321,250 164,213 79,866 n.a. 41,569 12,409 9,646 16,243 77,170 1966 321,250 160,508 82,154 n.a. 43,841 12,676 9,731 15,906 78,588 1967 321,250 156,752 84,565 n.a. 46,837 12,912 9,502 15,314 79,933 1968 321,250 153,066 87,378 n.a. 50,283 13,225 9,350 14,520 80,806 1969 321,250 149,355 90,567 n.a. 54,240 13,616 9,230 13,481 81,328 1970 321,250 145,668 94,173 n.a. 58,682 14,095 9,122 12,274 81,409 1971 321,250 142,122 99,391 2,643 63,805 14,677 9,128 9,137 79,737 1972 321,250 138,561 103,552 2,580 65,485 16,316 9,220 9,951 79,137 1973 321,250 134,941 109,353 2,543 67,162 18,507 9,555 11,585 76,955 1974 321,250 134,790 110,446 2,544 68,050 19,483 9,522 10,847 76,014 1975 321,250 n.a. 112,211 2,837 71,239 20,311 10,413 7,412 n.a. 1976 321,250 n.a. 113,112 2,719 71,317 21,718 10,290 7,168 n.a. 1977 321,250 82,744 113,796 2,692 71,497 23,658 10,075 5,875 n.a. 1978 321,250 n.a. 116,441 2,610 73,270 24,107 10,425 6,029 n.a. 1979 321,250 n.a. 117,603 2,493 72,857 25,571 11,044 5,638 n.a. 1980 321,250 n.a. 118,999 2,521 73,563 26,072 11,142 5,700 n.a. /a Bunded land on farm. /b Includes vegetables and flowers. _c Idle land and other use. Source: Office of Agricultural Economics, Land Utilization of Thailand, Various Issues. - 224 - ANNEX 9 Table 6.02 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Land Utilization, Central Region, 1959-80 (Rai '000) Farm holding land Unclassi- Total Forest Paddy Field Tree fied Year land land Total Housing /a crops /b crops Other /c land 1959 64,737 31,404 16,517 n.a. 12,520 1,945 774 1,278 16,816 1960 64,737 31,252 17,185 n.a. 12,617 2,321 782 1,465 16,300 1961 64,737 31,071 18,008 n.a. 12,730 3,006 818 1,455 15,657 1962 64,737 30,695 18,765 n.a. 12,880 3,197 937 1,752 15,276 1963 64,737 30,346 19,660 n.a. 13,035 3,441 1,107 2,077 14,731 1964 64,737 29,883 20,744 n.a. 13,197 3,747 1,348 2,452 14,110 1965 64,737 29,439 21,697 n.a. 13,366 4,024 1,719 2,588 13,601 1966 64,737 28,722 21,968 n.a. 13,229 4,164 1,744 2,831 14,047 1967 64,737 28,038 22,067 n.a.. 13,450 4,221 1,779 2,617 14,632 1968 64,737 27,354 22,357 n.a. 13,717 4,298 1,836 1,806 15,026 1969 64,737 26,704 22,698 n.a. 13,983 4,394 1,910 2,411 15,335 1970 64,737 26,085 23,087 n.a. 14,266 4,508 1,962 2,831 15,565 1971 64,737 25,483 23,700 611 14,567 4,641 2,105 1,776 15,554 1972 64,737 24,910 24,872 603 14,935 5,054 2,045 2,235 14,954 1973 64,737 24,363 26,402 599 15,387 5,393 2,148 2,514 13,972 1974 64,737 24,363 26,985 602 15,601 5,882 2,014 2,887 13,389 1975 64,737 n.a. 27,520 720 16,823 6,436 2,134 1,407 n.a. 1976 64,737 n.a. 28,089 674 16,810 7,206 2,127 1,273 n.a. 1977 64,737 11,917 28,482 665 16,507 7,948 2,020 1,342 n.a. 1978 64,737 n.a. 29,278 662 16,947 7,959 2,126 1,585 n.a. 1979 64,737 n.a. 29,246 659 16,316 8,608 2,300 1,363 n.a. 1980 64,737 n.a. 29,063 655 16,055 8,709 2,280 1,365 n.a. /a Bunded land on farm. /b Includes vegetables and flowers. /c Idle land and other use. Source: Office of Agricultural Economics, Land Utilization of Thailand, Various Issues. - 225 - ANNEX 9 Table 6.03 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Land Utilization, Northern Region, 1959-80 (Rai '000) Farm holding land Unclassi- Total Forest Paddy Field Tree fied Year land land Total Housing /a crops /b crops Other /c land 1959 106,254 74,799 11,338 n.a. 7,479 1,714 233 1,912 20,116 1960 106,254 74,293 11,387 n.a. 7,647 1,900 232 1,608 20,574 1961 106,254 73,795 12,297 n.a. 7,847 2,192 232 2,026 20,162 1962 106,254 73,255 13,165 n.a. 8,082 2,549 266 2,268 19,834 1963 106,254 72,441 14,158 n.a. 8,356 3,013 324 2,466 19,655 1964 106,254 71,394 15,080 n.a. 8,680 3,379 420 2,601 19,780 1965 106,254 70,420 16,170 n.a. 9,067 3,732 585 2,786 19,644 1966 106,254 69,258 16,452 n.a. 9,416 3,792 545 2,699 20,544 1967 106,254 68,185 16,772 n.a. 9,799 3,884 514 2,575 21,297 1968 106,254 67,045 17,142 n.a. 10,221 4,011 500 2,411 22,066 1969 106,254 65,948 17,580 n.a. 10,717 4,177 474 2,212 22,726 1970 106,254 64,633 18,081 n.a. 11,263 4,391 464 1,963 23,540 1971 106,254 63,303 18,954 719 11,847 4,663 459 1,265 23,997 1972 106,254 61,717 20,384 677 12,677 5,123 471 1,436 24,152 1973 106,254 60,055 22,521 644 13,664 5,772 520 1,921 23,678 1974 106,254 60,000 22,762 623 14,051 5,892 564 1,632 23,491 1975 106,254 n.a. 23,955 660 15,831 6,130 617 716 n.a. 1976 106,254 n.a. 22,958 594 15,119 6,104 697 444 n.a. 1977 106,254 42,868 23,624 590 15,415 6,465 738 415 n.a. 1978 106,254 n.a. 24,400 577 15,925 6,665 744 490 n.a. 1979 106,254 n.a. 25,143 574 16,227 6,995 736 611 n.a. 1980 106,254 n.a. 26,025 592 16,783 7,258 758 635 n.a. /a Bunded land on farm. /b Includes vegetables and flowers. /c Idle land and other use. Source: Office of Agricultural Economics, Land Utilization of Thailand, Various Issues. - 226 - ANNEX 9 Table 6.04 THAILAND AGRICULTURAL PRO(GRAM AND POLICY PRIORITIES Land Utilization, Northeast Region, 1959-80 (Rai 000) Farm holding land Unclassi- Total Forest Paddy Field Tree fied Year land land Total Housing /a crops /b crops Other /c land 1959 106,391 46,717 24,111 n.a. 15,560 2,001 347 6,204 35,563 1960 106,391 46,527 25,106 n.a. 15,522 2,460 351 6,773 34,758 1961 106,391 46,346 26,686 n.a. 15,703 3,174 354 7,454 33,179 1962 106,391 44,853 27,052 n.a. 15,725 3,373 352 7,602 34,487 1963 106,391 43,800 25,579 n.a. 15,765 3,577 374 7,864 35,013 1964 106,391 42,846 28,102 n.a. 15,821 3,833 429 8,020 35,442 1965 106,391 42,013 28,678 n.a. 15,895 4,154 521 8,108 35,700 1966 106,391 41,095 30,377 n.a. 17,835 4,265 506 7,771 34,919 1967 106,391 40,187 32,553 n.a. 20,099 4,390 492 7,572 33,651 1968 106,391 39,299 34,943 n.a. 22,720 4,531 482 7,209 32,150 1969 106,391 38,288 37,573 n.a. 25,767 4,689 477 6,640 30,530 1970 106,391 37,393 40,473 n.a. 29,225 4,865 475 5,908 28,525 1971 106,391 36,552 44,231 1,0156 33,295 5,060 478 4,333 25,608 1972 106,391 35,906 45,528 1,0:29 33,670 5,925 457 4,448 24,957 1973 106,391 35,129 47,157 997 33,790 7,182 440 4,748 24,105 1974 106,391 35,081 47,407 937 33,953 7,580 416 4,470 23,903 1975 106,391 n.a. 47,497 1,012 34,090 7,608 467 4,320 n.a. 1976 106,391 n.a. 48,741 1,011 34,594 8,272 463 4,412 n.a. 1977 106,391 17,402 48,295 936 34,663 9,126 405 3,115 n.a. 1978 106,391 n.a. 49,301 943 35,555 9,335 463 3,005 n.a. 1979 106,391 n.a. 49,564 891 35,541 9,842 456 2,835 n.a. 1980 106,391 n.a. 50,093 930 35,886 9,978 461 2,867 n.a. /a Bunded land on farm. /b Includes vegetables and flowers. /c Idle land and other use. Source: Office of Agricultural Economics, Land Utilization of Thailand, Various Issues. ANNEX 9 - 227 - Table 6.05 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Land Utilization, Southern Region, 1959-80 (Rai '000) Farm holding land Unclassi- Total Forest Paddy Field Tree fied Year land land Total Housing /a crops /b crops Other /c land 1959 43,868 24,512 8,869 n.a. 2,968 231 4,461 1,209 10,486 1960 43,868 24,388 8,939 n.a. 3,016 281 4,489 1,198 10,541 1961 43,868 24,274 9,008 n.a. 3,093 349 4,541 1,024 10,586 1962 43,868 23,808 9,997 n.a. 3,126 369 5,052 1,449 10,063 1963 43,868 23,307 11,152 n.a. 3,161 400 5,718 1,873 9,409 1964 43,868 22,862 12,261 n.a. 3,160 442 6,243 2,417 8,745 1965 43,868 22,341 13,322 n.a. 3,241 499 6,820 2,762 8,205 1966 43,868 21,433 13,357 n.a. 3,361 455 6,936 2,606 9,078 1967 43,868 20,343 13,174 n.a. 3,489 417 6,717 2,551 10,352 1968 43,868 19,369 12,935 n.a. 3,626 385 6,532 2,393 11,564 1969 43,868 18,416 12,716 n.a. 3,772 356 6,369 2,219 12,737 1970 43,868 17,557 12,532 n.a. 3,929 331 6,220 2,052 13,779 1971 43,868 16,783 12,506 247 4,096 313 6,087 1,763 14,578 1972 43,868 16,028 12,767 272 4,204 213 6,247 1,831 15,073 1973 43,868 15,394 13,274 303 4,321 160 6,447 2,042 15,201 1974 43,868 15,346 13,292 331 4,446 129 6,528 1,858 15,230 1975 43,868 n.a. 13,240 445 4,495 137 7,194 969 n.a. 1976 43,868 n.a. 13,324 450 4,794 137 7,003 939 n.a. 1977 43,868 10,558 13,396 451 4,912 119 6,911 1,003 n.a. 1978 43,868 n.a. 13,461 428 4,843 148 7,092 949 n.a. 1979 43,868 n.a. 13,650 370 4,773 126 7,552 828 n.a. 1980 43,868 n.a. 13,818 375 4,839 127 7,643 834 n.a. Ia Bunded land on farm. /b Includes vegetables and flowers. _c Idle land and other use. Source: Office of Agricultural Economics, Land Utilization of Thailand, Various Issues. ANNEX 9 - 228 - Table 6.06 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Forest Encroachment and Suitability for Agriculture /a (Million rai) Land use categories North Northeast Central/c South Kingdom Total Forests 73.7 38.5 32.4 21.5 166.0 Encroached Forests 8.2 11.6 13.5 5.0 38.2 Of which: Suitable (3.5) (7.2) (9.8) (4.4) (24.8) Unsuitable (4.7) (4.4) (3.7) (0.6) (13.4) Unencroached Forests lb 65.5 26.9 18.9 16.5 127.7 Of which: Suitable (7.4) (11.9) (4.9) (3.1) (27.3) Unsuitable (58.1) (15.0) (14.0) (13.4) (100.4) Nonforests 31.7 66.1 32.4 22.0 152.2 Water 0.6 1.0 0.3 0.6 2.5 Total 106.0 105.6 65.1 44.1 320.7 /a Based on satellite imagery, 1972-79. /b These forests are different from the "true forest" areas defined by the Forestry Department. True forests in Thailand is probably about 90 million rai in 1979/80. /c Includes Eastern Region. Source: Thai Universities Research Association, Land Use and Development Policy (in Thai), March 1981, Natural Resources, Table 2. _ 2X9 - ANNEX 9 Table 6.07 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Forest Areas and Encroachment by Types of Forest, 1972, 1979/80 (Million rai) North Northeast Central South Kingdom Official Forest Reserves 1972 50 28 19 13 110 Encroachment 8 12 6 5 31 1979/80 42 16 13 8 79 Other Forest Reserves /a 1972 18 Encroachment 2 1979/80 16 Prereserves /b 1972 38 Encroachment 5 1979/80 33 Total Forests 1972 166 Encroachment 38 1979/80 66 27 19 16 128 /a National parks and wildlife sanctuaries. /b Earmarked but not officially gazetted. Source: Adapted from TURA, Land Use Policy Study. - 230 _ ANNEX 9 Table 6.08 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Thailand: Land Use, by Regions /a (Million rai) Land use categories North Northeast Central South Kingdom Agriculture 33.4 60.2 35.1 18.2 146.9 Of which: Riceland (83.5) Perennial and upland cropland (63.4) Grassland and vacant land 1.6 16.8 6.8 9.9 35.1 Lowland 0.3 1.0 0.1 0.2 1.6 Community area 0.1 0.0 1.0 0.3 1.4 Water 0.6 1.0 0.7 0.1 2.4 Other 70.1 26.5 21.1 15.5 133.2 Total 106.1 105.5 64.8 44.2 320.6 /a Based on satellite imagery, 1976-79. Source: Thai Universities Research Association, Land Use and Development Policy (in Thai), March 1981, Natural Resources, Table 3. THAILAND AGRICULTIJRAL PROGRAM AND POLICY PRIORITIES Total Area Under Holdings, Number of Holdings and Average Size of Holdings, 1963 and 1978 Total area under holdings Number of holdings Average size of holdings SES 1975/76 1963 1978 % increase 1963 1978 % increase 1963 1978 % increase region (rai) ------- 1963-1978 (number) ---- 1963-1978 -- (rai) - 1963-1978 North-Upper 3,369,619 4,814,090 42.9 396,426 483,342 21.9 8.5 10.0 17.6 North-Lower 9,167,735 15,128,333 65.0 380,404 521,667 37.1 24.1 29.0 20.3 Northeast-Upper 12,581,576 19,306,895 53.5 619,782 834,712 34.7 20.3 22.9 12.8 Northeast-Lower 13,821,294 21,201,522 53.4 600,926 812,630 35.2 23.0 26.1 13.5 Center-West 4,450,527 5,576,155 25.3 183,149 216,130 18.0 24.3 25.8 6.2 Center-Middle 6,867,259 7,474,704 8.8 265,145 269,845 1.8 25.9 27.7 6.9 Center-East 5,772,212 7,340,234 27.2 186,803 222,769 19.3 30.9 31.0 0.3 South-Upper 9,093,014 9,055,298 -0.4 378,876 381,919 0.8 24.0 23.7 -1.3 South-Lower 2,228,460 1,962,023 -12.0 113,697 124,494 9.5 19.6 15.8 -19.4 Total 67,351,696 91,859,254 36.4 3,125,208 3,867,508 23.8 21.6 23.8 10.2 - . X t Sources: 1963 Agricultural Census and 1978 Agricultural Census Report, Changwat volumes. | D ANNEX 9 - 232 - Table 7.01 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Population (Millions) Mid-year Growth rates (x) for 5-year period 1960 26.3 1970 36.4 3.3 /a Estimates 1971 37.5 1972 38.6 1973 39.7 1974 40.8 1975 41.9 2.9 /a 1976 43.0 1977 44.0 1978 45.0 1979 45.9 Projections 1980 46.5 2.1 /b 1985 51.9 2.2 1990 57.4 2.0 1995 62.8 1.8 /a Growth over 10-year period. lb Fertility decline which began in the late 1960s could not be documented until the mid-1970s when a nuntber of fertility surveys were taken. There- fore, the rate of growth of population between 1970-75 overestimates the real rate of growth and the whole amount of the fertility decline over the 1970s is allocated to the 1975-80 period, probably understaLting the real rate of growth in this latter period. Note: The Population and Housing Census taken in April 1970 yielded a popula- tion estimate of 34.4 million. Since the census is believed to be an underenumeration, the 1970 population estimate was adjusted upwards to 36.1 million by the Workingt Group on the Population Projection of' the Subcommittee of Population Policy. Source: Population and Manpower P'lanning Division, NESDB. _ 233 ANNEX 9 Table 7.02 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Employment Estimates Employment /a ('000) 1960/b 1970/c 1977/d 1978/d Agriculture 11,332 13,400 14,922 16,018 Mining and quarrying 30 88 Manufacturing 470 693 Construction 69 185 Electricity, gas, water & sanitary services 16 25 Commerce 779 889 Transport, storage and communication 166 272 Services 654 1,202 Unknown 234 148 Total 13,749 16,902 20,308 21,938 /a Economically active population, age 11 years and older, employed in July- September. /b From World Bank Report No. 3067a-TH, Thailand - Coping with Structural Change in Dynamic Economy, December 1980. (Original Source: NSO, 1960 Population Census). /c From the NSO, Population Census (April, 1970) adjusted for July-September by multiplying 1.015. Except for the inclusion of the armed forces, comprising one percent of total employment in the census, the census data is comparable to the NSO Labor Force Surveys. /d NSO, Labor Force Survey (July-September round) for 1977 and 1978. Data for other years are not used because of noncomparability arising out of differences in definitions and seasonal coverage. ANNFX 9 - 234 - Table 7.03 THAILAND AGRICULTURAL PROGRAM AND POLICY PRIORITIES Average Annual Income by Source - Village Households (1975) Farmers Others All households Baht % Baht % Baht % Northeast Percent of households 77 23 Profits from farming 4,008 28 880 4 3,276 21 Home-produced income 6,936 49 3,551 17 6,144 39 Total Farm Income 10,944 78 4,431 21 9,420 60 Wages and salaries 876 6 8,055 39 2,556 16 Profits off-farm 396 3 4,859 24 1,440 9 Total Nonfarm Income 1,272 9 12,914 63 3,996 26 Rental value of house 1,080 8 1,184 6 1,104 7 Other income 816 5 2,098 10 1,116 7 Total Income 1.4,112 100 20,627 100 15,636 100 Total cash income 5,568 15,671 7,932 Of which from: Profits from farming 72 6 41 Profits off-farm 7 31 18 Wages and salaries 16 51 32 Other 5 12 9 North Percent of households 67 33 Profits from farming 7,404 48 930 6 5,280 32 Home-produced income 5,052 32 2,345 14 4,164 36 Total Farm Income 12,456 80 3,274 20 9,444 60 Wages and salaries 888 6 6,924 42 2,868 18 Profits off-farm 300 2 3,226 20 1,260 6 Total Off-farm Income 1,188 8 10,152 62 4,128 26 Rental value of house 1,152 7 1,116 7 1,140 7 Other income 792 5 1,744 11 1,104 7 Total Income 1.5,588 100 16,284 100 15,816 100 Total cash income 8,784 12,186 9,900 Of which from: Profits from farming 84 8 53 Profits off-farm 3 22 13 Wages and salaries 10 57 29 Other 3 8 5 Source: J. English and others, Rainfed Agriculture Sector Reconnaissance, (Back-to-Office Report), November 6, 1978, Attachment I, Table 5 (Original Source: NSO Income and Expenditure Survey).