Food Prices in Thailand

Food Prices in Thailand

Posted by Tawan , Reader : 546 , 11:02:46
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The World Bank has recently released a food policy implementation report for countries like Thailand a net producer to study. In order to effectively implement public policy, it is vital that policies implemented from the top government ministries to be effectively communicated to the grassroots level. Although Thailand has been decentralizing government functions for the past 20 years and especially since the Decentralization Act of 1999, Thailand continues to receive failing grades on IMF’s request on local data sources expansion in local government unit’s information ability in gathering detail statistics and public information time lags of up to 18 months and 2 – 3 years data gathering time lags. This result in poor policy formation and slow policy implementation and in times of volatility it produces reactionary policies instead of well thought out contingency plans based on stress test and risk management. After 20 years of using time as an excuse for not being ready is wearing quite thin.

What should be taken seriously in the World Bank Report is that recent food price increases and inflation is not a short-term trend it is a long-term trend. Food price volatility has increased as investors’ use the futures market not for hedging anymore but also for speculation has seen in oil prices given the decline of equity markets worldwide.


Data from the World Bank shows: “The rising trend in international food prices continued, and even accelerated, in 2008. U.S. wheat export prices rose from $375/ton in January to $440/ton in March, and Thai rice export prices increased from $365/ton to $562/ton. This came on top of a 181 percent increase in global wheat prices over the 36 months leading up to February 2008, and a 83 percent increase in overall global food prices over the same period (see Figure 1).”

This long-term trend in food price inflation also has been due to a lack of agencies and governments to become lax during times of stability and falling prices. “In 1980, 30 percent of annual World Bank lending went to agricultural projects, but this declined to 12 percent in 2007. The overall proportion of all Official Development Assistance going to agriculture is currently only 4 percent. Falling and stable world real cereal prices in the 1980s and 1990s contributed to a sense of complacency with respect to agricultural issues in developing countries.” Governments must make agricultural a priority investment.
Current higher food prices give governments and private sector incentives to make agriculture a priority investment. The World Bank has stated “Higher grain prices can also help to reverse a generally declining trend in government, private sector and donor investment in the agricultural sector. Agricultural producers such as Brazil, Malaysia and Thailand have made significant progress in agricultural commercialization in recent years, and have increasingly undertaken investments in research and extension necessary to promote increased agricultural productivity and reduced agricultural risk.” Given current newspaper reports of Thai citizens complaining of higher rice prices despite Thailand’s significant progress in agricultural commercialization is not being communicated well enough. Example, of recent Thai government debt restructuring to farmers is still seen by many as handouts. Public Relations campaigns by the Thai Government will also stimulate domestic demand while informing the citizen sector of policy benefits and drawbacks increases transparency and accountability. Thai Bureaucracy and Politicians having nothing to fear from in an increasing informed public. The continuing tendency to describe policies as one-liners “eat chicken not pork” demeans public intelligence.
The World Bank itself is working on first increase investment in agricultural as stated above. Second to inform global and national debate on climate change and the use of bio-fuels that is tied closely with food inflation. Benefits and tradeoffs of bio-fuel in a nation’s energy policy are as follows from the World Bank.

“Concerns over increasing energy use, climate change, and carbon dioxide emissions from fossil fuels make switching to low-carbon fuels a high policy priority at both the global and country levels. Bio-fuels are a potential low-carbon energy source, although whether bio-fuels offer carbon savings depends on how they are produced. [1] Second-generation bio-fuels produced from waste products, in particular, can avoid land use change and some of the emissions associated with current bio-fuel programs, and may hence offer significant environmental and social benefits.
These benefits, however, have to be weighed against the potential costs of rising food prices. According to a recent IFPRI study, most scenarios of increased use of bio-fuels imply substantial trade-offs with food prices. [2] These trade-offs are dampened, although not eliminated, when technological advances in bio-fuel and crop production are considered. Trade-offs between energy security, climate change and food security objectives need to be carefully monitored and integrated into both food and bio-fuel policy actions.” An example of these trade-offs is “Converting rainforests, peat lands, savannas, or grasslands to produce food-based bio-fuels in Brazil, Southeast Asia, and the United States creates a ‘bio-fuel carbon debt’ by releasing 17 to 420 times more (CO2) than the annual greenhouse gas (GHG) reductions these bio-fuels provide by displacing fossil fuels.
[1] IFPRI, IMPACT results (2006).”


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