Did the Thai rice-pledging programme improve the economic performance and viability of rice farming?

Witsanu Attavanich

Applied Economics, 2016, vol. 48, issue 24, 2253-2265

Abstract: This article evaluates impacts of the rice-pledging programme on the economic performance and viability of rice farming in Thailand. It also investigates whether the effects of the programme are heterogeneous across different farm types using the propensity score matching technique to address the self-selection bias in the farm-level data set. We found that the programme enhanced the economic performance less than hoped for. Overall, the programme was estimated to improve the net direct farm income for participating farms by $175.12--$194.82 per hectare. Taking into account the heterogeneous effects of the programme across farm types, we calculated that the greatest effects may be realized by farmers within the small farms subsample, at $404.41--$439.85 per hectare, but only $139.80--$213.36 per hectare for midsize farms, and $138.82--$173.34 per hectare for large farms. With regard to the economic viability of the programme, we discovered that it had an insignificant effect on farm modernization investment initiatives. Thus, future strategies incorporated into the programme that better control increases in production costs, improve small farmers’ access to the programme and require participating farms to spend a portion of the money received on farm modernization may improve long-run benefits of the programme.

Date: 2016
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DOI: 10.1080/00036846.2015.1117049

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