Economic Impact of Thailand Rice Pledging Scheme

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Submitted By jlum
Words 1535
Pages 7
Table of Contents
1.0 The Article…..……………………………………………………………………….…... 3

2.0 Essence of the Article…..……………………………………..………………….…... 5

3.0 Introduction of background ….………………………………………………….…... 6

4.0 Issue / Problem….………………………………………………….…………………... 7

5.0 Economic Analysis……………..………………………………………………….…... 8
• Supply and Demand
• Market Equilibrium
• Gross Domestic Product

6.0 Propose Economic Solution…………………………………………………….….... 11
• Technologies Advances
• Human Capital Growth
• Low Import Tax
• Land & Infrastructure
• Opportunity Cost

7.0 Conclusion / Summary ………..………………………………………………….…... 13

8.0 Reference ………………………..………………………………………………….…... 15
1.0 The Article

2.0 Essence of the Article
• Thailand’s populist “rice pledging scheme” of buying rice from farmer at high prices has predictably made Thai rice too expensive for the world market. Refer to Fig. 1.

• Thailand government buys rice directly from 1 million registered farmers at about twice the market price.

• Thailand rice export fell a precipitous 45.6% from Jan 1 to June 27 2012.

• Yield of main rice crop had declined by 17.2% over the decade due to low-quality grains, unsuitable plantation areas, and slow progress in developing irrigation in rain-dependent areas and high input cost.

• Thailand government is holding about 11 million tonnes of rice.

Fig. 1, Rice Export price
Source: http://www.fao.org/economic/est/publications/rice-publications/the-fao-rice-price-update/en/

3.0 Introduction of background

Thailand government introduced “rice pledging scheme” to boost the income of 37 million Thais, the population of registered farming families. (Boris Sullian, 6 Oct 2011). The scheme was initial plan for duration of October 2011 to July 2012, but was later extended to September 2012.

Under the scheme, Thai government will buy rice direct from…...

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