Rice is the staple food of Asia: About 90 % of rice in the world is grown and consumed in the region. Unlike other countries within SEA, Thailand has little need to import rice but has in fact been the world’s largest rice exporter for the last 30 years. Generally, the Thai rice sector suffers from some structural challenges due to the decreasing family size and


the negative social perception that rice farming does not lead to a profitable business and an attractive career for young generations respectively, scarce labour due to relatively high wages for SEA (labour is also costly, constituting one third of all input costs). These developments have driven mechanization and direct seeding instead of the labour- and water-intensive system of transplanting.

Albeit with a variety of advantages, direct-seeded rice has one major disadvantage - weeds. Due to this change in production patterns, the total amount of pesticides used in Thailand has dramatically increased from approximately 27,000 tons (t) in 1994 to more than 135,000 t in 2009. Most farmers depend on the advice and recommendations of pesticide retail shopkeepers, not seldom applying pesticides as toxic cocktail mixtures of a variety of products and increase pesticide dosages over recommended limits with a preference for cheap, strong, and fast-acting pesticides. Additionally, farmers tend to use pesticides in a prophylactic manner, predisposing their crop to invading pests as they are extremely toxic to natural control agents and thereby reducing ecosystem resilience, making rice crops more vulnerable to rapid increases in pests. As Thailand is one of the major rice exporters worldwide, decreasing volumes of Thai rice harvest also puts pressure on world rice prices, negatively affecting food and nutrition security in rice importing, especially developing countries.

Rice Market

In general, the rice market system consists of the paddy market and the milled rice market. Paddy marketing in Thailand takes place solely in the domestic market. At the local level, the market is highly competitive since farmers can choose where and how to sell their produce. When selling their paddy rice, their channels constitute purchase by agricultural cooperatives (5 % of total paddy traded), rice millers’ subcontractors (10 %), government (20 %), direct sales to rice mills (30 %), and sales through brokers (35 %). However, even if the local paddy market is highly competitive, it is difficult to prove whether the price paid to farmers reflects the real value or is over discounted for any given moisture content or other grading criterion. This problem is partly alleviated by cooperatives, the Bank for Agriculture and Agricultural Cooperatives (BAAC), and others in several of the government’s supporting programs. However, the role of farmers’ organizations in rice marketing remains weak and the private sector has been important in carrying out most marketing activities.

After milling, the processed rice is mainly marketed through three channels. Millers sell their white rice to brokers (65 %), wholesalers (25 %) and exporters (10 %). Brokers resell approximately half of their share to wholesalers, the other half to exporters. However, there are also a few cases in which mills export or market their rice directly. In summary, the domestic market absorbs approximately 55 % of the rice produced, with the remainder being exported.

In the marketing system improvement is mainly needed in packaging, which is becoming more important since Thailand plans to concentrate on high-quality rice for export and the changing shopping habits of domestic consumers from unpacked to packed rice (IRRI 2010).