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Shrimp and Development: Why Thailand 4.0 Agricultural Policies Are Unlikely to Benefit Small Farmers

Sorting shrimp

By: Katie Rainwater, Ph.D. candidate in Development Sociology

It was a good thing I arrived at Pairua’s home when I did. Had I come any later, he would have been absorbed in the card game that occupied his afternoons and evenings on days when he was not hired as a laborer to harvest shrimp or work construction. He would have likely been loath to leave the gameon which money was always wageredto participate in my research evaluating the efficacy of shrimp aquaculture as a development strategy 

Pairua had once been a shrimp farmer. In approximately 1989, he sold the twelve rai of land he had inherited from his parents, subsistence rice farmers, to Charoen Pokphand Group. Also known as CP Group, Thailand’s largest agribusiness experienced explosive growth in the 1960s when it opened chicken farms and, more important, began selling genetically improved chicks and specially formulated feed to Thai farmers, a method that it would apply to shrimp production from 1986 onward.i  

With the proceeds from the sale to CP, Pairua purchased a three-rai plot of land. Although he had lost acreage in the deal, he felt that he had come out ahead because his new plot of land bordered a road, making it logistically possible for him to farm shrimp. As Pairua’s neighbor chimed in to explain, “Back then, everyone in the village wanted to farm shrimp. Shrimp fields (na gung) were booming. Those that made them got a good profit. Villagers also wanted a profit. They wanted money. They wanted gold. They wanted to have lots and lots of money.”  

In his second harvest, Pairua was able to earn back his investment for the land excavation required to create a shrimp pondBefore long, he rented another plot of land and hired a relative to watch over this second pond. Initially, profits flowed in. An anthropologist conducting research at the beginning of the shrimp boom reported that villagers would say, “Raising shrimp is the least risky of activities,” and: “There is no business comparable to shrimp where you invest so little to realize such large returnsexcept for selling heroin.”ii   

Even from the beginning, disease would overcome the shrimp pond in about one of every three cycles. Yet at first, Pairua earned more than enough in other cycles to compensate for these losses. Over time, however, the declining quality of shrimp seed, the rising cost of feed, the increasing severity of disease, and the mercurial nature of prices ate into his profits. Seeding a pond began to feel more like a gamble than a sound investment. By the time he quit in 2003, Pairua owed a total of 800,000 baht ($18, 605) to the feed store, the agricultural bank, and friends and relatives. Fifteen years later, he still owes 400,000 baht ($13,333) to the bank. His work as a day laborer does not allow him to chip away very much on the principal. Nonetheless, he makes sure to pay the interest each month so as not to lose his collateralthe land under his house, his last holding after he sold his shrimp pond to pay his debt to the feed store. 

Pairua’s experience would seem to offer support to detractors of shrimp aquaculture who describe it as a form of accumulation by dispossession, realizing fast profit for wealthy individuals at the expense of a peasantry dispossessed from their traditional livelihood. Yet, reflecting on his experience, Pairua remarks, “It does not matter that I was not successful. Others, lots of others, were successful. With rice, sometimes there was enough to eat and sometimes there was not. . . . In the past, when we farmed rice, the villagers did not have work. . . . But with shrimp farming there is waged work.”  

Pairua’s avowed preference to live as a day laborer instead of a subsistence rice farmer, as well as his description of other villagers’ success, should give pause to those who dismiss aquaculture on grounds that it destroys traditional livelihoods or benefits only the wealthy. At the same time, Pairua’s positionindebted and dependent for his sustenance on sporadically available day laboreris hardly enviable. He wants to get back into farming shrimp for himself but now lacks both land and capital. 

Thailand is often cited as an example of a country suffering from its ensnarement in the “middle-income trap,” a term that describes a failure to upgrade to higher-value forms of manufacturing, which results in a large proportion of the workforce (forty-two percent in 2013) remaining in a low-productivity agriculture sector (that produced eleven percent of value in 2013).iii The tension created by uneven economic development has been eased somewhat by the government’s policy of offering price supports for agricultural commodities (including shrimp), a practice that former democratically elected Prime Minister Thaksin (20016) expanded and that has been subsequently continued by the currently reigning military junta (from 2014).iv   However, alleging that previous governments have only issued surface-level solutions to the problem of low-agricultural productivity, the junta has made reform of the agriculture sector a pillar of its policy to upgrade Thailand’s economy, from dependence on heavy industry and export (dubbed “Thailand 3.0”) to one based on high value and innovation (“Thailand 4.0”).v  

A video created by the Ministry of Agriculture and Cooperatives to introduce the reforms begins by proposing: “What is the problem of Thai farmers? The problem of Thai farmers is that they are farming in an old way (baep derm). They are never willing to change to pursue modern agriculture, and there is a lack of planning for the production of agricultural commodities on the level of the household and the level of the country. All this has caused farmers to live in a state of hardship for a very long time.”vi Through better planning and the application of new technologies such as precision farming, agricultural robotics, and biotechnology the government has vowed to increase the average annual income of farmers from 56,540 baht ($1,706) to 390,000 baht ($11,768) within twenty years.vii 

Shrimp aquaculture represents something of a vanguard of the agriculture sector that the government is trying to create. Not only was Thailand the number one shrimp exporter in the world from the advent of shrimp aquaculture in Asia in the 1980s through 2013, but also, despite a fall in production following disease outbreak, it continues to rely on more technically dynamic and intensive farming techniques than its competitor shrimp-exporting countries such as India, Indonesia, and Vietnam. It is no surprise that shrimp farmers have featured widely in the government’s public relation campaign around its flagship Praeng Yaay (Large Plot) program, in which agricultural cooperatives work with extension officers and the private sector to lower the cost of inputs and increase outputs through planning, the application of technology, and improved farm management.  

Privately, fisheries bureaucrats expressed their lack of confidence in the program. One explained that it is better suited to other types of agriculture such as rice farming, where equipment could be shared to maximize economy of scale. Another derided the effort as all smoke and mirrors. We spent the better part of a morning chatting to the latter in his unairconditioned office. The fan cutting through the stuffy air had been donated, like all the office furniture, by gratefulor favor seekingfishery cooperative or village heads. “Thailand 4.0,” he sighed. “Did you see the Auntie that came in before?” He referenced an elderly woman who was filing for government support after her tilapia farm had been flooded. “She’s Thailand 1.0. No education, no knowledge. And yet we are supposed to develop her into Thailand 4.0. And I’m the only fishery officer here, responsible for two districts. These are the resources the government devotes to agriculture in this country of farmers and fishers.” 

“I was in debt many hundreds of thousand baht,” a Praeng Yaay participant explained when interviewed by a broadcaster from NBT, a government public relations channel, on the occasion of the prime minister’s visit to his farm. “But now, I recover my investment and then obtain a profit.viii The representative from CP Group, the private sector partner in the project, explained that the farmer’s success was a consequence of using technology, specifically CP’s “Three Cleans method”or the use of a clean pond, clean seed (immature shrimp fry), and clean water.ix The latter two “technologies, I learned from farmerswere difficult to implement.  

CP has a policy requiring farmers to purchase CP-brand shrimp feed in order to obtain the privilege of purchasing CP’s fast-growing “clean” shrimp seed. Unlike other producers of shrimp feed, CP does not extend credit to farmers through the end of the production cycle, which would allow them to pay for inputs through the proceeds from the harvest. This policy puts the purchase of CP feedand hence CP seed, out of reach of many small farmers who do not have several hundred thousand baht on handFurthermore, clean waterin the sense meant by the CP representativeentails reserving approximately seventy percent of pond area to water filtration, leaving only about thirty percent of pond area for grow-out operations. This was impossible for all the farmers in my field site in Southern Thailand, most of whom only had one or two small ponds, their reduced landholdings partially a consequence of CP’s purchase of a couple thousand rai of farmland in the village in the 1980s.  

The Praeng Yaay program from my field site was never featured on TV. In meetings between the agricultural extension officer and groups of farmers that I observed, the groups scoffed when asked to come up with ways to reduce the costs of inputs and increase outputs through planning and technology, stating that this could not be achieved without the cooperation of the private sector. Eventually, a couple methods were half-heartedly ventured: have CP cancel their policy linking the sale of seed to feed, and have CP implement a policy to issue partial refunds if the shrimp dies within a few days of seeding.  

Unlike the premise of the Praeng Yaay program, in which private-sector representatives are to act in an advisory capacity, farmers indicated that a redistribution of risks and benefits between farmers and agribusiness was required. In an interview after the conclusion of this Praeng Yaay meeting a couple of farmers expressed little faith that their proposed policies would be implemented. “CP is above the state; the public sector can’t stand up to them,” one of them explained. In the end, they opted not to participate in the Praeng Yaay program. 

Shrimp farmers in Thailand cannot be said to have eschewed the ways of modern farming. Many, like Pairua, eagerly transformed their inheritance into a pond for producing agro-commodities. But, just as upgrading to higher-value forms of manufacturing is difficult, it is also difficult to raise productivity levels in the shrimp sector, as this requires finding methods to intensively farm monocultures after disease has become endemic and soil and water resources have become degraded. x  

CP has responded to this challenging environment with a breeding programits seeds yield fast-growing shrimp, thus limiting exposure to disease and weather conditions in grow-out ponds. But by owning the technology, CP can stipulate the conditions under which it is distributed, which includes withholding credit on feed sales, privileging large farmers access to seed, and a no-refund policy. The Praeng Yaay program in Chanthaburi, implemented in 2016, had only twenty-four participants as of mid-2017.xi Given that capital and land constraints will prevent most small-scale farmers from adopting the “Three Cleans” method pioneered by CP, it is clear that this program is not living up to its promise to dramatically raise farmers’ income through technology and planning.  

Although the junta government has identified technology as necessary to the growth of the agricultural sector, it is not investing sufficient state resources into the development of farming inputs (such as shrimp seeds) or the development of grow-out methods that could be used by small farmers with capital constraints. It is unlikely that this will be addressed in the foreseeable future. Shrimp farmers are politically active in Thailand, yet the demands of the state are typically limited to asking for price supports in times when the global price for shrimp drops. To the extent that Thailand 4.0 succeeds, it will likely be at the behest of private-sector actors such as CP, without regard for the likes of Pairua

Katie Rainwater is a PhD candidate in development sociology. Her dissertation research, funded in part by the Fulbright-Hays, looks comparatively at labor relations in Thailand and Bangladesh’s export-driven shrimp industries. Katie conducted dissertation research in Thailand from June 2017 to March 2018.