Inequitable distribution of income root cause of farmers’ debt – TTB Analytics

The government’s 3-year debt moratorium program for indebted farmers will relieve the pain for only a limited time, but will not actually resolve the debt problem, which is structural and rooted in the inequitable distribution of income from farm produce, according to TTB Analytics of the TMB Thanachart Bank.

For example, the selling price of 100% white rice last year averaged 17.5 baht/kg, but farmers only earned 8.8 baht/kg. Their production costs ranged from 8.16-9.32 baht/kg (depending on their land rent and mechanised harvesting costs) compared to 7.25-8.28 baht/kg a year earlier. On top of that, farmers may incur additional expenses for fertiliser and pesticide.

In summation, last year farmers earned a net income of only 0.64 baht per kilogram of their rice crops.

In contrast, rice millers’ production costs, including rice processing, packaging and transport, amounted to…