Collapsing agricultural prices have forced the junta to offer loans to rice farmers. Rice subsidisation in Thailand has historically proven ill-fated; should this policy fail, what is the likelihood of rural unrest?
Thailand’s rice industry is in crisis, at a time of great uncertainty generated from King Bhumibol Adulyadej’s passing. The junta has resorted to providing loans to jasmine rice farmers. Jasmine rice accounts for approximately half of rice export incomes in Thailand – an important source of foreign currency reserves. The market value of jasmine rice has fallen over a third since 2013, and is at a nine-year low.
Past rice subsidy schemes have proven ill-fated and attracted the ire of the junta. After they ousted Prime Minister Yingluck Shinawatra in May 2014, they immediately halted her flagship rice subsidy scheme which had allegedly squandered billions of dollars.
This article will not review that scheme; suffice to say, despite ultimately failing it had provided farmers with immediate economic security. Regions which thrived under that scheme have been hit by economic strife. One such region is Isan, the northeast region where jasmine rice production is concentrated. 21 million people live here, one third of Thailand’s population.
Resentment growing in rural Thailand
This latest pledge will do little to ease growing resentment for the junta in the rural heartlands. Here, support for the Shinawatra family is well-documented.
Thaksin Shinawatra, who ruled between 2001 and 2006, was reputed for his populist policies that appeased the poor and marginalised rice-growing areas of Northern Thailand.
Thaksin was ousted in 2006 because of his perception among members of the establishment as a corrupt figure who squandered taxes to buy rural votes. The same fate befell Yingluck in 2014. Both times, the military ousted governments which the northern regions were responsible for putting in power.
This was effectively a message that the rural vote did not matter. It was an insult to 15.5 million farmers (or 40% of Thailand’s total labour force).
Voting data showing support for the junta’s new constitution reveals an overwhelming rejection of the junta in the north and northeast – on top of the insurgency plagued southern regions.
In contrast, Thaksin, responsible for the modernisation and development of those regions, remains a ‘saintly figure’ in rural Thailand. He is still widely seen as Thailand’s most powerful politician, in part due to the influential pro-Shinawatra ‘Red Shirts’ movement that is willing to do his bidding.
The ‘Red Shirts’ have provided much of rural Thailand with an important political outlet
Broader oppositional forces
The Shinawatras were responsible for bringing a forgotten section of society back into political play. But beyond party politics there are broader forces adding to rice growers’ resentment.
Despite the importance of rice cultivation, the production which yields the highest incomes is mainly under the control of the larger conglomerates. Farmers also lose out on profits to powerful and influential middlemen.
Farmers have little control over their land. The junta’s article 44 can be used by the government agency overseeing land redistribution, the Agricultural Land Reform Office (ALRO), to force farmers off land.
Many farmers have a mortgage with local businessmen, and are mired in debt. Research shows that the percentage of farmers owning land in Thailand has dropped dramatically – from 44% in 2004 to 15% in 2011. Analysts see the land sales as a symptom of an expanding household debt crisis that could plunge Isan into social instability.
Land rights problems have been exasperated by political turbulence over the past fifteen years. Because of the opposition between the Shinawatra clan and the establishment, rice farmers are used as a political football. Very often, new governments fail to honour the land rights commitments to farmers agreed under past regimes.
Eroding support for Yingluck
With the general election scheduled for late in 2017, the junta hopes its pledge will prevent renewed political support for Yingluck. Should it fail, how realistic is that renewed support?
Yingluck currently faces charges from the National Anti-Corruption Commission (NACC) for corruption and a perceived dereliction of duty relating to her rice scheme.
If found guilty, Yingluck faces up to 10 years in prison, which could prove politically volatile. It may rally her supporters while Yingluck sits in prison, as a martyr, akin to a Thai ‘Aung San Suu Kyi’. The military likely do not want to push too far, and instead want to limit her current influence (despite her recent publicity stunt).
Yingluck’s imprisonment would also cause Thailand unwelcome publicity and international scrutiny, which the junta will not want. They may prefer to pile on the criminal charges to smear her political reputation and reduce the likelihood of her governing again.
However, one key aspect of Yingluck’s ouster was that she had lost the support of the farmers. In December 2013, her government failed to approve a renewed budget for rice subsidisation, and in January 2014 it defaulted on existing payments to farmers.
Yingluck Shinawatra has proven a very divisive figure in Thai politics
These failures provoked the 2014 movement, and those protesting were mostly voters who had originally elected Yingluck. Thus compared to her brother, who remains in self-imposed exile, she is hardly a galvanising figure in Thai politics.
Whether or not support for either Shinawatra is revived, today the opposition has been cowed by the military. After the coup the military significantly cracked down on dissent, making the ‘Red Shirts’ once again politically weak (although there is a risk of radicalisation if they are oppressed too much). Overall, the 2014 coup reinforced the reality that anytime provincial and rural interests threaten to control the system, the junta have the capacity to intervene and reinforce the status quo.
Conclusion
Since the 2014 coup, the economy has hit crisis and struggled to regain momentum. Thailand’s history of rural exclusion, combined with a growing debt crisis for the farmers, suggests that the conditions are ripe for protests. This is especially since the new Crown Prince may face difficulties in legitimising the junta’s regime. However, in contrast to Thaksin, Yingluck has lost the confidence of her key constituency. Moreover, the junta’s absolute power has limited the capacity for organised dissent. The junta will certainly be confident in this knowledge. Nevertheless, we can expect them to throw more money at the rice farmers to ensure they remain onside during this politically sensitive period.
