March 4, 2023

Thai agricultural sector series: Raising productivity - 1. Thailand’s persistently low yield per acre

Thai agricultural sector series is a special article by ListenField board of director, Dr. Supavud Saicheua.
This series will provide macro view of agricultural sector in Thailand and how ListenField technology can help to solve the problem at the end of the series.

Let's begin...

Thailand’s persistently low yield per acre

Land for agricultural use in Thailand amounted to 149.25mn rais, accounting for 46.54% of the country’s total land area. At the same time, about 1/3 of the country’s labor force is engaged in the agricultural sector. Together, they produce agricultural output equal to only about 8-11% of GDP (depending largely on water availability and crop prices, which can vary significantly from year to year).

What is clear from the about data is that Thailand has long been plagued by very low productivity of land and labor in the agricultural sector – committing sizeable resources that provided low returns. This also means that the growing wealth and income inequality in Thailand can in large part be explained by the persistence of this low productivity “trap”.

Yet, the country has also always been a major net exporter of food for many decades. This means Thailand clearly has comparative advantage in this sector. Raising the productivity of land and labor and agriculture is therefore the means to lift Thailand’s farming sector out of poverty, as well as enhancing the country’s international competitiveness.

World Bank chart below puts Thailand’s low yield per acre for cereals in clear perspective. Vietnam and the US were picked as an example to show how Thailand has failed to improve yield per acre in line with other countries over the past 40 years. What is alarming is that Thailand’s yield per acre -- at around 3,000 kg per acre – did not improve at all during the past 20 years (2002-20). During the same period, yield per acre improved by 39% for both Vietnam and the US.

A reason for the low yield per acre is that only 32.8mn rai of agricultural land has irrigation. This amounts to only 22% of total arable land. There had been no increases in irrigation.

In the next series, we will provide a detail information production.

More information about the author

He is currently an Advisor of Kiatnakin Phatra Financial Group.

He was the MD of Phatra Capital Public Company Limited (2011-2017) and was also the MD and Head of Research of Phatra Securities Public Company Limited.

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