Government allocates $1 billion for village development

5With businesses and economists urging the government to spend more to stimulate the domestic economy, the Cabinet last week approved roughly $1 billion in funds to develop infrastructure in all of the Kingdom’s 79,556 villages, with an emphasis on building projects that will benefit agriculture and rural economies.  Each village will receive about $14,000 for their projects.

While the Thai economy has been registering respectable growth, especially in the context of a weak global economic environment, Thailand’s farmers and rural villagers have been enduring hard times. Low prices for commodities on world markets, severe drought related to the El Nino weather phenomenon, and rising production costs have many farmers struggling and suffering from rising debts. Rubber farmers recently protested over low prices for their products, asking the government to buy their output at a guaranteed price.
The $1 billion in funds must be disbursed within six months. The money will be used to finance construction of barns, crop-drying facilities, mills, fertilizer plants, reservoirs, machinery to process farm products, and other projects to improve the livelihoods and quality of life of rural people and villagers.

The Fiscal Policy Office said that the funding was aimed at strengthening the grass roots economy and supporting production, value addition and marketing of farm produce in areas suffering from natural disaster, high production costs and low farm prices.

The United Nations Development Program wrote in a 2014 report that “poverty in Thailand is primarily a rural phenomenon, with 88 percent of the country’s 5.4 million poor living in rural areas. Some regions — particularly the North and Northeast — and some ethnic groups lag greatly behind others, and the benefits of economic success have not been shared equally.”

The organization noted, however, that poverty in Thailand has fallen steadily since the late 1980s. “Over the last decade, poverty has been reduced from its recent peak [following the Asian financial crisis of the late 1990s]. In the poorest rural northeast region of Thailand, the number of impoverished households dropped from 3.4 percent (1996) to less than 1.3 percent (2006-2009).

Nonetheless, the period from 2008 through 2012 saw rising and high prices for agricultural commodities on world markets, with rice prices surpassing $1,000 a ton. Thailand was the world’s largest exporter of rice at the time. Since 2012, commodities prices have been steadily falling, and incomes of farmers and rural people have been sharply dropping as a result.