Here is another graph that may get some interesting discussion going. Like yesterday’s graph, it is taken from the National Statistics Office of Thailand’s 2007 Household Socioeconomic Survey (Table 4).
It shows, for (1) landowning farmers; (2) tenant farmers and (3) agricultural workers, the percentage of households in four different income categories. The income categories are my aggregations of the NSOs income bands. I’m not completely happy with the categories, but they are the best I could do with the data provided.
- Poor: household income of less than 60,000 baht per year.
- Middle: household income of 60,000 to 120,000 per year.
- Upper-middle: household income of 120,000 to 360,000 per year.
- Rich: household income of more than 360,000 per year.
These data give a nice illustration of the importance of what I like to call the “middle-income peasantry” (light green and dark green segments). Popular images of rural people in Thailand as impoverished peasants living under the yoke of landlords, money lenders and middlemen, are no longer particularly useful for understanding contemporary politics.
In relation to some of the comments to yesterday’s post: yes, these middle income farmers (especially the landowners) do borrow a lot for household expenses (motorbikes, televisions, mobile phones etc). This is a very good indicator of their middle-income status. They are moving on in the world and, like many of us, are using credit to do it. I don’t accept that a large number of them are on the brink of foreclosure. Of course this happens sometimes, but in my experience it is relatively uncommon. (Does anyone have any good data on foreclosure?) If my household debt was only 70% of my annual household income I would be a happy man!
60,000 baht per annum is a pretty low threshold for elevation to the middle classes. I would read the graph as showing that 60% of people in Thailand are very poor.
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Thanks David. Not middle-class, but “middle-income peasant”. I’m not suggesting that “middle-income peasants” are particularly well off. But I don’t think their politics is the same as the survival-oriented politics of the “very poor”. 60,000 baht per annum per household is roughly the same as the UNDP poverty line for 2007 (about 1500 baht per person per month). AW
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Andrew said: “If my household debt was only 70% of my annual household income I would be a happy man!”
I assume the bulk of that is a mortgage at single digit interest rates that offset other expenses (rent). Would you feel the same way if the debt was on credit cards? Or to a money lender, with the assets backing it being your daughter or your kneecaps.
An awful lot of adjustment needs to be done before comparing debts loads between Thai farmers and Australian academics.
I agree that the composition of rural Thailand is more diverse than many think. But you haven’t made a case that debt isn’t a very important rural problem.
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“If my household debt was ONLY 70% of my annual household income I would be a happy man!” – Andrew Walker
That is a ridiculous statement. What could somebody buried in debts (70% of annual household income) be so gleeful about? Remember this is household income. I could not imagine the wife or the children cheering their father on this singular accomplishment: 70% of household income.
Ridiculous.
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Hi,
Nothing new in what I’ll say. Basically, the idea is: don’t go too far in trying to picture the situation in rural areas in a positive light.
1st) a key question is obviously how much of their income (for each group and income level) comes from agricultural and non -agricultural sources.
I believe there’s overwhelming evidence to the fact that the relatively good economic picture in Thai agricultural hh is largely due to non-agricultural income sources (in which I would include providing agriculture-related services such as renting out machinery) and not to a good economic situation within agriculture itself (except perhaps for rubber).
What difference does it make? Thailand and its professional and part-time farmers need a real and coherent agricultural policy. If you (and many others of course) describe the economic situation in rural areas in a rosy light, this could be used by others to undermine efforts to finally have a farm policy adapted to the current level of capitalization of agriculture.
About the level of indebtment:
There are three things that need to be understood
1) The capitalization of agriculture has meant that capital requirements for each farming season also increased. This I believe explain why the severity of indebtment (as shown by OAE data we discussed earlier) increased since the 1970s (in relations to total yearly income). This transformation of agriculture is fundamental and must be adequately recognized and managed.
2) About debt: a major problem is distinguishing yearly debt repaid this year (or along a predictable horizon) and the unexpected debt which won’t be repaid this year or in a predictable horizon. The first kind is not worrying, only the second is.
3) in line with this, the 70% of annual income figure is not really relevant here as we don’t know (for sure) how we should interpret this. Obviously, it’s not the same thing if this debt is at 7% or 100%/yr interest rate, or if the debt was incurred willingly and can, reasonably, be repaid over a predictable horizon vs an unexpected debt due to market fluctuations, health issue, etc. Again, comparing a mortgage debt for somebody with a fix and secured income with a farm debt used simply to pay for this year’s seeds, fuel, fertilizer, education (and not for say buying a huge tractor which you could sell if a problem occurred) is not really fair.
A last thing I’d like to point out is the possibility that more than ever agricultural debts cannot be repaid through agricultural income in the ensuing years but rather through non agricultural incomes (this at least outside the most dynamic agricultural areas in Thailand). When positive margins in a good year represent a tenth or a twentieth of the negative margins (debt) incurred during a bad year, this means a heavy problem for agriculture, no?
Of course, some ‘modernist’ at the World Bank or elsewhere will be happy to see these problems in Thailand as it will finally lead to the ‘normal’ shedding of backward farmers, the transfer of surplus population to other economic sectors, and the growth of ‘professionnal’ farmers. But this phase of the agrarian transition is accompanied by major social problems and suffering. Perhaps, they really are almost inevitable, but they need not be lauded and left unmanaged.
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Problem is that you can draw the income lines defining your middle-income peasant anywhere you like. So any sensible sceptic will accuse you of drawing the lines where it suits your argument.
I can’t think of any science that will help you justify where you draw the lines. But your response #2 suggests you have set the bottom line too low. Does a farmer who is straining his chin above the poverty line think of himself as “middle income”? I doubt it.
Last year the Thai Health Foundation (SoSoSo) did a nationwide survey with a sample of 5,300, reasonably well selected. One of the questions asked respondents to evaluate their own economic status. Among farmers, the result was: “poor,” 31%; “not rich, not poor,” 43%; “have status,” 24%; “rich, comfortable,” 2%.
I suspect that “not rich, not poor” is the answer which a “middle-income peasant” would select on this question. This distribution is very similar to your chart, but squeezed upwards a bit.
I’m not suggesting you should take this or any other survey as gospel. But I think you need some way to justify where you draw the lines, and that self-evaluation might be one way. I seem to remember a couple of other recent surveys found around 30% classifying themselves as poor.
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Thanks Chris, I am not particularly happy with the 60,000 baht threshold. But I am constrained by the categories used by the NSO. The relevant category they have is 5,000-10,000 baht per month (60,000 to 120,000 per year). If there is such a thing as a threshold between “poor peasants” and “middle income peasants” I think it lies somewhere within this range. (The Basic Needs Survey comes up with a “basic needs” figure of about 80,000). Do you know if finer breakdowns are available? AW
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So a lowly farang English teacher on a pittance of 30,000 baht per month is considered “rich” according to this scale.
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Stuart, the post is about Thai rural incomes. If you were a rural/peasant household earning 360,000 baht per year I wouldn’t hesitate to call you a “rich peasant”. AW
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I wouldn’t call 30,000 baht per month a “pittance.” Many many of the Thais I know and work with don’t even make half this amount.
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Andrew and Chris Baker, I quite see the points you are both making here – but it also needs to be said that what matters as far as political consiousness and potential action is concerned, is how the farmers, “poor, etc. see themselves.
I.e. ultimately it is not so much a matter of their OBJECTIVE situation (eg. according to income charts, et.), but their SUBJECTIVE assessment of themselves which fuels the socio-political dynamic.
There’s some hint of this in what Chris Baker says – but I think this point needs to be made more explicit.
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Andrew Walker (10)
hehe. Obviously my comment had ironic intent, which may not have come through. The bemoaned circumstance of the ‘typical lowly farang English teacher’ is one of those often-told anecdotes that illustrates how bizarre and ‘other-worldly’ Thailand can appear from a foreign perspective. A typical 30,000 per month salary for an English teacher appears modest, and the source of ridicule and scorn for many. But some farang teachers struggle to come to terms with their supposed lowly status while, at the same time, dealing with the obvious disconnect between their own earnings and those of their Thai colleagues (the average salary for a Thai graduate would be about a third of that). This is all a bit off topic, I know, but your description of ‘rich peasant’ would be laced with a certain humorous irony for many farang teachers!
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Thanks Stuart, sorry for missing the irony! AW
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Back to AW’s and Chris Baker’s points. If we take 60,000 baht a year as a family income, then this comes out at roughly 40 baht per day per person. All of the comment on subjective/objective are noted, but could we realistically suggest that this is a “living wage/income”, let alone a division between poor and middle? That one-fifth are surviving on less than this is startling.
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I wonder how much of the top sectors on the graph of the results, directly or indirectly, of the proceeds of sex tourism.
When I first came to Thailand, a house in one of the many Northeast villages that was slightly newer or larger was generally said to be paid for by Thai men working overseas. Didn’t we refer to the women lording (ladying) over their neighbours as Saudi wives? Please correct me on this if I’m remembering it wrong. Of course this was in the days before the Provincial Electricity Authority had managed to wire in many of the villages.
Today when you visit the same villages you see many cement houses, some mansions as good as any in the gated moo bahns of the Bangkok suburbs. If you ask who owns them the two most common answers are the girl married to a farang who has moved to the village, or the girl who lives with her foreign husband overseas but has sent money back to build her parents a home or as her own retirement home. Again I’m talking about the Northeast as I don’t get out into the country in the North or South to compare them.
Now for myself, I say good luck to the girls, but for those who wear rose-coloured glasses when looking at peasant life it’s worth remembering the meanness that can be so much part of that life. It’s the living on the edge of crop failure, of climatic conditions going against you, of debts being called in, and most of all the fear of losing your land that can justify selling their daughters or sending them to work in the sex industry. Compared to this, living under wage slavery as an industrial worker is very much a step up.
Sometimes when Andrew produces his graphs it’s possible to think that all the changes for the better happened under the Thaksin governments, but this probably doesn’t hold up to close scrutiny. Myself, I think the arrival of electricity to those villages was a major turning point, as was the migration of sons and daughters to jobs in the cities or industrial areas. The new pickups and motorbikes in the villages do point to increased debt but if lucky can mean a farmer can market his crops for a better price or bring in supplies at a lower cost.
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Les: “Sometimes when Andrew produces his graphs it’s possible to think that all the changes for the better happened under the Thaksin governments.”
Really??? Go back and look at some of my discussion in the Thailand in Crisis Videos. My whole argument is that what happened under Thaksin was a continuation of long term trends. Those who think, for example, that it was Thaksin who flooded the country side with credit, need to look at the long term data. AW
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Sometimes when Andrew produces his graphs it’s possible to think that all the changes for the better happened under the Thaksin governments
Apologies Andrew, did that come out sounding like a personal attack? It wasn’t the intention.
I was thinking of the graphs showing farming income against GDP and so on that seemed to show such steep rises after Thaksin became leader.
I should of course added to the turning points the rise in worldwide commodity prices, which Australia also benefited from, caused by China’s growth and possibly the commodity trading funds that seem to push up prices.
Any reaction to the rest of my comment, or was just the graphs bit?
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In an interview with Sean Boonracong last spring he said there were 30,000 people in Isan making a half a million baht a month, for what it’s worth.
Just came back from the north and what Lesabbey says about the sex industry certainly resonates with me after being in touch with tribal communities recently. The more in touch I am with the vast majority of Thai people actually, the more I can very easily understand that 1500 baht an hour makes a lot of sense, for example, when you are trying to sell handwoven shirts and bags in a flooded market for 100 baht (and who knows the price for Thais). I was in a northern town, a small town in a remote part of Thailand and I thought, wow, this place is so serene, so not Bangkok. But when the lights went down it lit up like a Christmas tree and instantly there were girls in threes sitting at outdoor tables selling that oldest of commodities.
60k baht does seem a bit low for a middle income for a household. That’s 5k baht/month which, according to my own informal interviews, seems normal for one income, but not a household. Government teachers and police start at around 6k. The interesting thing is that I have asked how much these construction workers working on these high rises and this BTS line make and they are making between 6-15k/month here in Bangkok. Though most earning closer to 6k.
Getting at another post about possible topics for this site I would say that I’d be interested in more statistics.
And yes, Lesabbey, life as a peasant is indeed mean. I was taken up a mountain as one of the first “tourists” and this leader of his tribe had his people come out like a circus trick to dance while a woman walked around writing down names to get a piece of the 300baht that I (learned later) paid. He walked into a home and simply spotlighted the people like they were an exhibit. The desperation was palpable.
Good God. Whatever political process is underway I just hope that more of the wealth trickles down to so many of these people…
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I think the points made about migration and remittances hit at the heart of how well the rural countryside is doing. The north probably has as many houses built from the proceeds of prostitution as the northeast. And has anyone looked into how dependent poor villagers are from remittances? Note the Khmer populations on the Cambodian border that seem so dependent on remittance from their family members in Bangkok and seasonal labour for all expenses. Maybe they are the forgotten poor, but there are many other people along this border who are often living on the margins. Srisaket is probably the worst, even more so since the border became a war zone.
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I understand the author’s use of the term “peasants” here but I’m still bothered by it. Today’s rural Isan people are pretty sophisticated about a lot of things – in some cases more so than many Bangkok people who haven’t had to negotiate thing such as having to change incomes, adapt to urbanization, and deal with the modern world after attending third-rate upcountry schools.
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Why can’t peasants be sophisticated?
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Because if they were sophisticated Andrew, then they wouldn’t be peasants.
Though you may have a different usage of ‘sophisticated’ and ‘peasant’ to me…
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Define “sophistication”…
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