Considerations on the future of the dairy industry in Thailand: A review

Abstract

Thailand possesses are large, diverse and expanding economy with a current national gross domestic product of in excess of THB 11 trillion and a growth rate of 6.5 percent (2012). As a newly industrialized economy, it is considered one of the most successful of the traditional economies in South-East Asia. The major contribution to the GDP is provided by the Thai industrial and service sectors with the agricultural sector contributing just 10 percent of GDP (2016). Thailand is a signatory to numerous free trade agreements with most of its major trading partners including being a partner to the agreement between ASEAN and China (ACFTA). Despite achieving access to these important export markets there remains commentary from some quarters that the Thai agricultural sector still underperforms both in terms of production and in meeting those markets requirements. With a notably large percentage of the Thai population involved in rural endeavors either directly or indirectly related to agricultural production (mostly rice production), there remains a significant untapped interest in improving the nation’s ability to produce both for the domestic and international markets. Arguably, the rural economy is underserved by successive national governance which has either ignored the wellbeing of the agrarian industries or played a divisive game of political football with the rural economy which has resulted in Thai farming community being somewhat vilified by other sectors. This, combined with a lack of focus on agricultural technologies and with limited recognition for the many specific challenges which are faced by the rural production sector, has resulted in prevailing attitudes that have contributed to the ongoing substandard performance of rural sector activities for decades.

The reasons for this are probably deeply founded in Thai cultural dogma. Certainly today, all things including employment within Thai rural industries are considered unsophisticated, undesirable and lacking status or class. The Thai expression which is often used in a slightly disparaging manner connotes everything humble, basic and non-technological about a rural existence yet also manifests the emotional context of home, family and belonging which are the hall-marks of the simpler lives that many Thai citizens experienced as children before they matured and migrated to the larger cities for the promise of employment and prosperity. Many countries experience the rural/urban duality of a social whole yet few seem to express such a range of feelings about how that duality imposes personal conflict (and more latterly, collective national conflict) the way Thai people do. It is something of an indictment and certainly a telling social commentary that no-one in Thailand views staying back on the farm as a potential path to any measure of prosperity with seemingly only luck separating the outcomes of such a decision between a decent working life and a subsistence. For Thailand to become serious about addressing the issues which prohibit parts of the agricultural sector from achieving its true performance potential there will need to be a shift in attitude towards the value that the rural economy and rural society can bring to the nation. As with most shifts in attitude, the only way to achieve this will be through strong leadership at a governmental level or higher still.

To understand the challenges faced by Thai agriculturalists and to investigate potential new directions for the Thai rural industries and economy it is worthwhile to explore the differences in methods, environment and mindset which are prevalent in Thailand compared with nations deemed to exhibit excellence in agricultural activities, performance and production. The scope of this paper is to examine and compare the facets of the Thai agricultural environment which may prohibit the dairy industry from optimizing its industry potential.