Thailand's Rice Politics - Transcript

| 00:00:02 D. McCargo | This is the Nordic Asia podcast.

| 00:00:07 P. Desatova | Welcome to the Nordic Asia Podcast, a collaboration sharing expertise on Asia across the Nordic region. I'm Petra Desatova, a postdoctoral researcher at the Nordic Institute of Asian Studies in Copenhagen. It is my great pleasure today to introduce Jacob Ricks, an associate professor of political science at Singapore Management University. His research interests include the political economy of development, common pool resource management, bureaucracy, ethnicity and national identity politics. He specialises in particular on Thailand and Indonesia within the South-East Asian context. So welcome to the podcast, Jake.

| 00:00:45 J. Ricks | Thank you very much for the invitation.

| 00:00:47 P. Desatova | Jake and I first met last year, wasn't it, at a conference in Europe and you were actually back then presenting on Thai nationalism. But the topic that you're presenting today, it's very different. So would you maybe introduce your topic a little bit to our listeners and tell us what is it that you're working on these days?

| 00:01:08 J. Ricks | Sure. As you mentioned, I have a few different interests in Thai politics. On the one hand, I am interested in the political economy and development. On the other, I'm interested in identity politics. And the project I'm going to talk about today is on the political economy and development side. And it's a project about the politics of rice prices in Thailand. This is part of a larger project I've published a little bit on in the journal articles coming out on this topic. But it's part of a larger project based on my interests in the lives of rice farmers in Thailand. And what I'll talk about today is kind of the historical trajectory of rice price policies in Thailand and how some of them have come about and how they've shaped farmers' lives.

| 00:01:58 P. Desatova | How exactly did you become interested in the lives of these rice farmers and in the broader topic of rice politics?

| 00:02:08 J. Ricks | It combines a lot of interests, I grew up on a farm in the US, in the western US, where my father grew potatoes, wheat and barley. And I, of course, chose a different lifepath. I left the farm a while ago, but my father, my brother, my uncle and my cousin are all still farming back home. And as such, I have, I've always felt an affinity towards farmers. And when I first lived in Thailand in the year 2000 to 2002, I lived in the Northeast for a significant period of time, an area that's called Isan. And I spent a fair amount of time with rice farmers there. And so as a young man at that time, a bit older now, I saw that their lives were extremely challenging. And I had just basically left the farming in the US and went to Thailand and saw these people's lives on farms there. And the differences were quite striking. So that started some of my interest in rice farming. Later on, when I worked on my dissertation, my PHD dissertation, I was focusing on bureaucratic reforms of the irrigation agency. I found that they talked about basically the same issues my dad was talking about. We were talking about crop prices. We were talking about the weather. We were talking about expensive inputs for fertiliser, for seeds. And we were complaining, well, I wasn't. But the farmers were complaining about government, and that's exactly what my family back home does. And so I started to be a little bit more interested at that time about government interventions in farmers’ lives. And so farmers can be thought of as small business owners and their livelihoods as small business owners are tied to the institutions and the policies that governments set up that either make their lives easier or make it much harder to be a small business owner or a farmer. And so by combining my interests with the political economy, with kind of those observations, I decided a few years ago to start a project on the politics of rice prices.

| 00:04:21 P. Desatova | Before we delve in a little bit more into this topic itself, could you tell us a little bit more about the broader political significance of rice in Thailand? Because not all our listeners might be necessarily familiar with Thailand and Thai politics. So what is the broad significance? Why are you studying rice and not some other crops?

| 00:04:40 J. Ricks | So rice in Thailand is similar to rice all across Asia. It's a central part of Thai life. And this is actually reflected in Thailand in their spoken language, where the term for rice is tied with other terms and it actually substitutes for the term food. So if you're asking the question, would you like to eat? You actually ask the question ‘kin khao mai’ - would you like to eat rice? Or, if you say, I'm hungry, quite often people don't just say hungry, they say ‘hiu khao’ or I'm hungry for rice. And so rice has become an essential part of the cultural life of Thais. And cultural festivals are also tied to rice planting schedules. So, for example, the royal ploughing ceremony or the rocket festivals in northeast Thailand, those are actually centred around the rice planting season. Now, beyond that cultural significance, rice is also an essential component of many meals. As of 2011, rice contributed about 40 percent of the daily caloric intake and one third of the daily protein intake for Thai people. Beyond just consumption, rice production is also a major source of employment. Around 3.7 million households farm rice in Thailand and rice fields account for about three quarters of all arable land in the kingdom. For about three decades, Thailand was the top rice exporting country in the world. It's recently lost that position. But today it's still in the top three rice exporters. With a single crop having such wide ranging impact on people's lives, it's little wonder that politicians have intervened in rice market. And this is especially true of the past two decades. Government rice policies have become very public and very popular among the people, especially the paddy pledging program. Under the sometimes it's called the Rice Mortgage Scheme that was implemented during the period from 2001 to 2006.

| 00:06:48 J. Ricks | And then it was also resurrected and brought back under subsequent governments, especially under the Yingluck Shinawatra government. And indeed, accusations of corruption based on that policy was one of the justifications for the 2014 coup that put general Prayuth Chan-o-cha in power. And as listeners may be aware, he's still in office. And so rice is incredibly political in Thailand and it's incredibly important for people's lives.

| 00:07:18 P. Desatova | How far back does this history of rice policy go? I mean, surely that was something before the Thaksin period.

| 00:07:24 J. Ricks | Yeah, it it definitely did. I look at it mostly in the post-war period. So post-1945. And if we look at Thai policy history across that period we can from 1945 until more recently, we can kind of break it down into three big periods where rice policies were fairly consistent across the three periods. The first would have been from about the 1950s until the early to mid-1970s, and I would call this period the authoritarian extraction era. So this was a time period when Thailand was mostly under military dictatorship. The military was, along with other bureaucratic agencies, were basically running the country. And this was a period in which the government extracted quite heavily from the countryside through a number of policies but one of the most important was something called the rice premium, which was a tax on exports of rice. So in the 1950s, those export taxes contributed as much as one third of government revenue, and they remained a significant source of funds for the Thai state until the 1970s. These export taxes created a tax burden on farmers that range from about 10 percent to twenty five percent of farm income. So basically, Thai farmers were paying a pretty hefty tax, 10 percent to 25 percent of their income to the government during this time period through this export tax. Of course, it wasn't a direct tax on farmers, but it was passed down to farmers from the Thai rice exporters and the Thai rice millers. So basically, farmers bore the weight of this tax. Beyond merely providing government revenue, the Thai government at that time was also trying to provide cheap food for its urban population, which was mostly in Bangkok. So the export taxes helped by reducing the amount of rice that could actually leave the country, which created a domestic surplus and depressed domestic rice prices.

| 00:09:35 J. Ricks | So that again hurt the Thai rice farmers. The government also used other policies, like the public warehouse organisation, to ensure that cheap rice was available for urban consumers. So in essence, from the 1950s through the early 1970s, the government was extracting resources from rural rice farmers to support development projects and development efforts focused on Bangkok. Farmers, despite being the vast majority of the Thai population at this time, had actually little to no say in these policies that were impacting their lives and the military dictatorships that ran the country during this period paid very little attention to farmers in the sense of their policy needs. Instead, they focused on things like eradicating what might be referred to as farmer resistance movements, chasing out the Communist Party of Thailand, but also suppressing farmers who were not affiliated with any of the Communist Party. So, again, that was the authoritarian extraction era. That was the first time period. The next time period ran from about the late 1970s until around the year 2000. And this is where government interventions in Thai rice prices were very different. The rice premium was greatly reduced and was made relatively insignificant. So, for example, in 1981, the rice premium dropped to 17 U.S. dollars per tonne. In 1974, it had been 250 US dollars per tonne. So there was a massive drop in that export tax. In 1986, the export tax was actually abolished. The Thai government made this massive transition from extraction from the rural areas and then it began to develop a set of subsidies for farmers. And these subsidies for farmers were made somewhat in reaction to farmer protests and farmer dissatisfaction over rice prices, but they were also made because there was this massive shift in Thai governance at that time. In 1979, there was a new constitution, which allowed for an elected legislature.

| 00:11:42 J. Ricks | And then General Prem Tinsulanonda became the prime minister, an unelected prime minister, a military prime minister somewhat similar to today, but presiding over an elected legislature. Now, in that elected legislature, you had a bunch of weak political parties and these weak political parties had to be brought together in cabinet coalitions under the Prem government. And in order to keep all these cabinet coalitions together and keep them happy, money had to flow and money had to keep people happy. Money had to go to development projects in certain areas. Money had to go to political operatives in certain areas, had to go to vote canvassers. All of that had to be spread around during this time period. And part of that was a number of policies that were set up to impact rice prices. So there were a number of subsidy programs. There was a creation of the paddy pledging scheme or the paddy mortgage program. In 1981, the government initiated rural projects, including rice storage sheds and bins, irrigation projects supporting rice millers in certain areas. Basically, money was being divided up and given to specific constituencies to keep everybody happy and keep everybody as part of the coalition. Beyond that, the public warehouse organisation and the marketing organisation for farmers were charged with enhancing rice prices in certain localities. But they basically operated as subsidies for rice millers rather than helping farmers. Anyway, during this time period, because of the political institutions that existed, very little of the government money that was dedicated to boosting rice prices actually made it to farmers. So by some estimates, only about 20 percent of the money that was earmarked for farmers actually ever made it to farmers. The other amount of money was absorbed by rice millers, rice exporters and government officials, especially the parties that controlled the Ministry of Commerce and the Ministry of Agriculture.

| 00:13:50 J. Ricks | So billions of baht were provided to millers and exporters in the form of cheap loans based on the argument that these cheap loans would help them purchase more rice in certain provinces, in certain localities, which would then boost rice prices. It never really did. Those types of interventions basically were failures. But what they did do was they helped rice millers. So during this time period, from 1987 to 1996, ten thousand, almost ten thousand new rice millers were registered with the government. So this was an increase of almost 30 percent during that time period. And a lot of these rice mills were basically just set up to access these government subsidies, basically to say during the second period, then we were seeing targeted policies that were tied to the political system, which was characterised by these weak political parties, weak governments that were forced to pander to particularised interests. Farmers were important for their votes, but the votes were linked to local patronage systems and were tied quite often to rice millers rather than any policy platform or any real affiliation, partisan affiliation.

| 00:15:07 P. Desatova | No wonder then Thaksin became such a big hit in the 2000s, so that I guess would be your third time period, right?

| 00:15:15 J. Ricks | Exactly. So everything changed in under the auspices of the 1997 constitution. So when the 1997 constitution came about, one of the goals was to get rid of these weak political parties and to strengthen governments, strengthen their capacity to actually implement policy. And so the constitution was designed to strengthen political parties. And along comes Thaksin Shinawatra and the Thai Rak Thai party. Now, Thaksin, of course, he had been in politics before. He'd actually had a hand in the death of a political party in the past, had a hand in the collapse of governments in the past. But when he came to power under the 1997 constitution, he was able to leverage the institutions under a constitution to kind of consolidate power. And his Thai Rak Thai party was swept to power in 2001. It didn't win an outright majority at that time, but it was sufficiently dominant in parliament, where he was undisputed as the prime minister at that time, something that had not happened in the past 20 years. When he came to power, he almost immediately began subsidising rice farmers. So he took the old paddy mortgage scheme, the old paddy pledging program, and he revamped. It had been in existence since 1981, but it had never really been very effective. The goal of the policy, just as many listeners might not be aware of what is paddy pledging, right? What does it mean? Every year at harvest time there's a glut of rice on the market. And so because of there's a large supply of rice on the market, prices drop dramatically. And when prices drop dramatically, then farmers would be very unhappy, of course, because rice may have been more expensive a month ago, but today, when you try and sell your paddy, you're getting maybe 80 percent or 70 percent of the price that you would have gotten a month ago.

| 00:17:20 J. Ricks | So that, of course, makes farmers unhappy. So the paddy mortgage scheme was set up to provide farmers an alternative to selling their rice right away. So rather than take your paddy directly to the rice miller with the paddy mortgage scheme, you go to the government, the Bank of Agriculture cooperatives, you go to the BAC and you take out a loan for the value of your paddy and then you store your paddy. Right, rather than sell it. So you'd live off the loan for a couple months until rice prices increased again. And then you go and sell your paddy and then you'd go and repay the loan. That was the idea. That was never very effective. Not very many farmers took advantage of it in the past, but under Thaksin, he changed it. He changed the paddy pledging scheme so there were no longer kind of the restrictions on the policy that would force farmers to repay the loan. Instead, because under paddy pledging you would be offered under Thaksin, you would be offered actually more value for your paddy than you would get on the open market. So what farmers would do is then they go out and they take the loan and then forfeit their paddy to the bank. So basically the bank would take ownership and the farmer would just keep the loan. And so what essentially happened was the government became the largest rice buyer in Thailand because of the way Thaksin changed the scheme. For many farmers, they saw it not as a money making scheme for a bank. Instead, they saw it as a direct subsidy. They were getting more money for their paddy. For many farmers, they felt as though they were finally getting a fair price for their paddy, which they hadn't before. So for many farmers, the thinking was, this is a great policy. This is helping us out a lot.

| 00:19:08 J. Ricks | For critics of the policy, they looked at it and they saw this as a very expensive program that was costing the state a lot of money and didn't have very many benefits. So critics actually would argue that the government was losing money on this. So the perspectives were different. From the farmers side, they saw it just as a subsidy that was helping them because they were poor. Right. And they needed the help. From the critics side, they saw it as kind of something akin to vote buying but also a program that was fraught with corruption and fraught with opportunities for money to disappear. But whichever side of the argument you were on, nobody could argue that the paddy pledging scheme was not popular. So by 2005, almost 40 percent of the rice produced in Thailand, which is well over half of the rice that goes on to the market, was going into the program. So a lot of rice in Thailand actually gets consumed at home, over half of the stuff that was going on to the market was going into the paddy pledging scheme. And even farmers who sold rice on the market were bringing some benefits because prices were being driven higher by the paddy mortgage program. So that was a huge change. Very different situation. Now, after the 2006 coup, the military government and the appointed government, shortly thereafter, they reined in the policy and then it was brought back and used again when Thaksin's or when the second incarnation of Thai Rak Thai won elections in 2008, that was the People Power Party. But that government didn't last very long, thanks to some judicial decisions. And that government fell and the People Power Party was dissolved. And then Abhisit Vejjajiva became prime minister, who was part of the Democrat Party, and he was much more amenable. The military saw him as much more amenable to their interests.

| 00:21:05 J. Ricks | And he and his government actually did away with the paddy pledging scheme in 2009 and tried to replace it with another policy that didn't work very well. And then in 2011, when elections were held again, Yingluck Shinawatra, with the third incarnation of the Thai Rak Thai party, which was called Pheu Thai, brought back the paddy pledging scheme and she promised farmers: we will return the paddy pledging scheme, we will actually enhance it, we're going to provide you more subsidies. And she came to power and the Pheu Thai Party won a massive victory in the 2011 election and the paddy pledging policy was brought back and enhanced. It was prices that were offered for rice and for the paddy were even higher than they had been in during Thaksin's time period. And it was incredibly popular among the farmers. But it also had some very negative impacts. So some farmers were leaving behind more higher quality rice products and were going for poorer quality rice in order to take advantage of the scheme. The paddy pledging policy contributed to the downfall of the Yingluck government. Critics referred to the cost of the program as losses rather than a subsidy. And Yingluck was eventually convicted of corruption in absentia. She had already fled the country, but after the 2014 coup, she was convicted of corruption in absentia because of the program, which was an unprecedented move internationally. Can you go after a prime minister for implementing a policy that they promised?

| 00:22:39 P. Desatova | Yes, it was a big thing. And I do remember reading somewhere and I'm not sure, you know, how far it is accurate. But the Yingluck government actually offered sometimes prices up to 50 percent higher than the actual market share, and they struggle to resell the rice. And there were massive stocks of rice rotting in warehouses. It was definitely a big issue at the time.
| 00:23:02 J. Ricks | So you're exactly right. The Yingluck government ended up buying most of the Thai rice on the market and they ended up buying quite poor quality rice at very high prices and then they couldn't sell it on the international market.

| 00:23:17 P. Desatova | It was a bit of a disaster in that sense. This rice pledging scheme was, as you already said, one of the big reasons that justified the overthrow of the Yingluck government by the military in 2014. And it was built around that rhetoric of corruption and all these things. But then, quite interestingly, the military continued in a similar way. Is that correct?

| 00:23:40 J. Ricks | Yes. Well, the military began offering other subsidy programs. Paddy pledging was out. They got rid of, it was abolished as a as a program, probably justified that it was even with its foundations all the way back to 1981, it was not a very effective policy even back then. So definitely there were better policy options out there. But yeah, the military got rid of it, but then began offering alternative subsidies to farmers. That goes to show what kind of ramifications this paddy pledging program has had on Thai politics and Thai society. I would say that Thaksin Shinawatra’s first term in office, which was from 2001 to 2005, was the period that changed Thai rice politics forever. The important thing to note here is that the political behaviour of farmers changed during this period. So prior to 2001, rice farmers were not beholden to any single party. Instead, they had kind of patronage relationships with rice millers and vote canvassers in their local areas. But after the policy, they began to have a deep connection with policy platforms of a single party, namely Thai Rak Thai, but it had this massive impact on rice farmers lives and their society. So recently, my colleague at Chulalongkorn University, Thanapan Laiprakobsup, and I have written a paper together that demonstrated that rice farmer behaviour changed across these elections. Basically, what we show and I can't show you any charts or figures here, but basically what you can see is that there is a correlation between the number of rice farmers in a province and the vote share in that province for the Thai Rak Thai party, which has happened from 2005, 2007 and 2011. It happened in all of those elections. In the 2001 election, we don't see that correlation. Right. So something happened there. And and we argue that it was this paddy pledging scheme.

| 00:25:57 P. Desatova | How about the latest election in 2019? Did you cover that?

| 00:26:01 J. Ricks | I have not run the data on that. Come back to me another time. I've just finished a very busy teaching semester so I haven't had time to do that.

| 00:26:15 P. Desatova | So that will be the part two of the article. And if you could just mention to our listeners where they can find the article in case they were interested.

| 00:26:21 J. Ricks | So that article is in the Journal of Rural Studies and it's available online. It hasn't been issued a volume number yet, but it's available online.

| 00:26:31 P. Desatova | Perfect, so for all of our listeners who might be interested in this topic and would like to find out more that's definitely a good place to start reading.

| 00:26:39 J. Ricks | If you'd like to see a prepublication version. I believe there's a prepublication version archived on SMU website. So you can you can find that if you Google me, I've got a link somewhere on my website.

| 00:26:56 P. Desatova | Perfect. Well, unfortunately, I think we're kind of out of time now, which is a massive shame because this is a really interesting topic. And I think it's a topic that will continue to have much importance and it's not going to go away anytime soon. And as you said, there is a very strong loyalty between these rice farmers and Thaksin and his political allies and parties that have been affiliated with them. So it's definitely going to continue to shape Thai politics.

| 00:27:23 J. Ricks | If I can just add one little thing, because I want to just really quote from one farmer who we were doing an interview with him and this farmer said, and this is my translation: ‘politics is not like before we understand it better than in the past. We are not just the people anymore. We've become citizens.’ And so this farmer, I believe, explains what was going on, what impact the paddy pledging scheme under Thaksin has had on their livelihoods.

| 00:27:52 P. Desatova | Yes, it's a very nice quote that really encapsulates that massive change that happened in Thailand in the early 2000s, which still to this day is very much felt because it was the catalyst that created a highly politicised and highly charged political context in Thailand, where you have Thaksin, Thaksin-aligned parties against the traditional establishment of the monarchy, military and the sort of senior bureaucracy. Obviously, now with the student protests, there is another dimension, which is the generational divide, but it is definitely an important thing to bear in mind. So thank you very much for accepting our invitation and presenting on this topic even though trying to find a time that works for you in Singapore and for us here in Copenhagen was a bit of an issue. But thanks for spending your evening talking to us. Hopefully, we'll get a chance to follow up on your future research at some point soon.

| 00:28:47 P. Desatova | Thank you for joining the Nordic Asia podcast, showcasing Nordic collaboration in studying Asia. I'm Petra Desatova, a postdoctoral researcher at the Nordic Institute of Asian Studies in Copenhagen and I have been talking today to Jacob Ricks, who is an associate professor of political science at the Singapore Management University. Thank you.

| 00:29:09 D. McCargo | You have been listening to the Nordic Asia podcast.