Thai data

In 2003, the Ministry of Agriculture and Agriculture Cooperatives of Thailand commissioned a survey to investigate the potential of developing organic rice in Thailand for export. The survey covers 5 provinces, 2 of which are in the Northern region namely Phayao and Chiang rai, while the other 3 are in the Northeastern region, covering Ubon Ratchathani, Surin, and Yasothon.

The sampled farms in Northeast Thailand are ones, which practiced conventional agriculture using high level of agro-chemicals until the early 1980s. In the mid-1980s, in Surin and Yasothon Provinces, the movement of natural agricultural practices and environmental conservation promoted by religious groups and several Non-Government Organizations (NGOs) initiated contract farming of organic rice as a solution to the problems faced by farmers. This development was then supported by European NGOs, who wished to produce organic rice for export to their own Fair Trade Networks. In Ubon Ratchathani, contract farming of organic rice was supported by a semi-NGO as part of its strategy for community development and poverty reduction. It was also an income earning opportunity for the NGO. In contrast organic rice farming in the Northern region was a private sector-led initiative, prompted by demand growth in European countries. In search for land where chemicals has not been applied for organic production, the firms searched for marginal forest areas and introduced rice contract farming to farmers.

The farm survey was conducted during 2002 and 2003 with an updated interview with key informants during early 2005. Hence the monetary data are in prices of 2002-3. Within each province approximately the same number of contract and non-contract farmers were surveyed in the same locality. All of the contract rice farmers are organic or low-chemical farmers while all the non-contract farmers are conventional rice farmers. This resulted in 83 contract-organic and 85 conventional farmers surveyed in the Northern region, and 140 contract-organic and 137 conventional farmers in the Northeastern region. Thus, there are a total of 445 farms surveyed, 168 in the Northern region and 277 in the Northeast

The contract-organic farms in the survey are categorized into three groups according to the length of their organic farming experience and the restrictions on their farming practices. Farmers in the ‘certified’ organic group include those certified to avoid totally the use of chemical fertilizer, pesticides or herbicides. They are mostly more than four years into organic farming. The ‘transitional’ organic farming group represents farms, which were under transition (mostly two-four years into organic farming), while the ‘initial’ organic farming group represents farms, which had just gone organic (mostly one to two years into organic farming). Those in the ‘transitional’ organic or ‘initial organic groups in principle should be committed to stop using chemical fertilizers, pesticides and herbicides. The fact that some still do is likely to be due to an ineffective inspection and certification system. In this sample all organic farmers are contract farmers, while all conventional farmers are non-contract farmers. All certified and transitional organic farmers received a premium price based on their years of organic practice. However not all contract farmers are pure organic farmers making it impossible to completely merge the organic and contract groups.

Table 2 [ PDF 69.9KB | 1 pages ] gives the division between different categories of farmers within regions and provinces.

Information on quantity and value of rice output and major inputs were gathered in the farm survey. The major inputs include seed, hired and family labor, chemical fertilizer, organic fertilizer, pesticides and herbicides, fuel, machinery rental, land, and capital assets. In addition, data were collected on the characteristics of farmers and farms.

Table 3 [ PDF 73.2KB | 2 pages ] provides a summary of the characteristics of the sampled farms by contract and non-contract farmers and by region. Overall, household heads for contract farms were significantly² younger (age of 49 versus 51 years) and better educated (2.86 versus 2.36 years of formal education) than for non-contract farms. These differences were also true for the two regions except that there was no significant difference between the age of the household heads between contract and non-contract farms in the Northern region. With respect to experience in organic rice farming, contract farmers in the North had a significantly higher level than in the Northeast (5.83 versus 3.23 years).

The average number of household members engaged in rice farming was very similar for contract and non-contract farmers (2.37 versus 2.39 persons) overall and in both regions. The percentage of female members engaged in rice farming was also very similar for contract and non-contract farmers (51% versus 52%) overall and in both regions. Overall, contract farmers allocated an average of 13.48 rai of land to rice farming, which was significantly higher than the non-contract farmers who allocated only 10.71 rai. Similar patterns were also exhibited in both regions. With respect to land ownership, while there was no significant difference between contract and non-contract farmers in the Northeast, contract farmers in the North had a higher percentage of ownership than the non-contract farmers (94% vs. 76%). While the percentage of income derived from non-agricultural activities was significantly lower for the farms in the North (8%) than in the Northeast (14%), there were no significant differences between the two contracting groups within each region. As to the percentage of agricultural income derived from rice farming, there were no significant differences between regions and within the two contracting groups.

While farms in the Northeastern region used a significantly higher percentage of family labor (76%) when compared to the North (66%), there were no significant differences between contract and non-contract farmers within each region. While the contract and noncontract farmers in the North on the average showed no significant differences in using their own seeds, non-contract farmers in the Northeastern used significantly more seeds from their own supply than contract farmers (70% versus. 59%). In terms of utilization of organic fertilizers, contract and non-contract farmers in the North were similar in the percentage from their own production (slightly more than half). However, contract farmers in the Northeast used significantly more organic fertilizer derived from own supply than non-contract farmers (26% versus 4%).³ Finally, both regions had a similar endowment of saline soil and there were no significant differences in soil distribution between contract and non-contract farmers.

Since contract and non-contract farming tend to have different production processes, we estimate their profit efficiency separately.⁴ Table A.1 [ PDF 86.8KB | 1 pages ]and Table A.2 [ PDF 86.8KB | 1 pages ] in the Appendix provide the summary statistics of variables used in estimating the profit frontiers for contract and noncontract farms, respectively.

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