Yesterday I read a very interesting article about rural incomes in Thailand. Here is the reference: Supattra Cherdchuchai, Keijiro Otsuka, and Jonna P. Estudillo. 2008. Income dynamics, schooling investment, and poverty reduction in Thai villages, 1987-2004. In Rural poverty and income dynamics in Asia and Africa, edited by K. Otsuka, J. P. Estudillo and Y. Sawada. New York, NY: Routledge.
The article is based on surveys of about 300 households in six villages (three each in Suphan Buri and Khon Kaen). The first survey was conducted in 1987 and the second in 2004. Two of the six villages (one in each province) are located in agriculturally favourable irrigated areas. Another two (again, one in each province) are in less favourable rain-fed areas and the final two are flood prone (Suphan Buri) and drought prone (Khon Kaen) respectively.
The main findings of the study are striking:
- There has been a significant reduction in poverty in all areas. Using the regional poverty line developed by the National Economic and Social Development Board the rate has declined from 42% in 1987 to 13% in 1984 in Suphan Buri and from 78% to 20% in Khon Kaen.
- The main cause of the reduction in poverty is the very significant increase in non-farm income. In Suphan Buri this increased from 6% of household income in 1987 to 39% in 2004. In Khon Kaen the increase was from 30% to 80%.
- Given the importance of non-farm income in poverty alleviation, “the difference in poverty incidence between favourable and unfavourable [agricultural] areas has declined.” In 1987 average household income in unfavourable areas was 48% of average income in favourable areas. By 2004 this had increased to 55% (these figures are from the book’s concluding chapter).
- The influence of farm size and availability of irrigation on household income has declined. By contrast the influence of the quantity and quality (education) of human capital has “significantly increased.”
- Education has an “important positive effect” on non-farm earning. Children of better educated and better-resource farmers tend to have better education. As a result land ownership and access to irrigation (by enabling investment in education) can have an indirect effect on non-farm income.
From my reading there are three important messages here:
- The non-farm sector is now the “main game” for rural livelihoods. Supporting the more even regional development of this sector should be a central policy goal.
- At the same time, supporting more productive forms of agriculture will facilitate greater local investment in education and other forms of “human capital” improvement, especially for poorer farmers.
- High quality rural schooling is crucial for ongoing poverty alleviation and rural eocnomic growth.
3 responses so far ↓
1 Steve // Dec 10, 2009 at 3:05 pm
Those findings are quite striking, but I think what one would expect. It’s well known that manufacturing is superior to agriculture when it comes to the overall wealth of a country.
I would like to see a follow up showing a comparison of the relative strength of the family unit in Khon Kaen and Suphan Buri betwen 1984 and 2004. I believe a shift to a manufacturing society also has a corresponding negative impact on the family unit.
Ultimately it is positive to see increased wealth in these communities, but it is a shame when it comes at the expense of long held traditions and cultural norms. Western countries have much greater wealth, but they also have seen a degradation of the family, increased substance abuse and mental health issues, an increase in stress related diseases…is it really worth it to move away from an agriculturally based society?
I’m certainly not advocating continuing poverty, I just wish there were a balanced way to move away from agriculture and into non-farm occupations. Perhaps Thailand will show us how to balance a non-farm workforce and increased wealth with the needs of the individual and the family.
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2 David Brown // Dec 11, 2009 at 8:16 am
Steve, good comment and question
I expect quality education is still the key… to enable the people to make good choices for themselves
perhaps some improved education will enable engagement in manufacturing but involving remote/isolation from family… continued improved education might enable more local manufacturing????
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3 Susie Wong // Dec 11, 2009 at 3:02 pm
It is a paradox that those most in need of research attention are often those least able to understand it. A phalanx of research and comments has their objectives. Unless those objectives are being properly understood, one simply plays into the hands of those research objectives that would harm not only mainland Southeast Asia but Australia national security as well. The monotony of the naïve type of reviews drove me crazy. This is not nuances, indeed, it’s very serious.
First of all, we need to understand why Keijiro Otsuka chose Suphan Buri province and Khon Kaen province among other 76 provinces as the research sites. Secondly, why Keijiro Otsuka chose 1987 and 2004 as the year for the comparison.
Suphan Buri and Khon Kaen are the stronghold of the Chart Thai Party. The founders of this party was Phin Choonhavan’s son and son-in-law. Phin staged the 1947 coup that led Pridi Banomyong into exile. Phin’s another son-in-law Pao Sriyanond, the then Police Chief had murdered all Pridi’s right hand men. One must understand the history of the Allies versus the Axis to understand Keijiro Otsuka’s research objective.
Keijiro Otsuka chose 1987 and 2004 because Phin’s son Chatchai Choonhavan became Prime Minister in 1988 and Phin’s grand-son Kraisak joined politics in 2004. Kraisak is now Deputy Prime Minister and Deputy Secretary General of the Democrat Party.
The increased non-farm income and education “human capital” in these two provinces are thus correlated with Chart Thai political base and global positioning system.
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