Thailand's rise to prominence as a rice producing nation was due to increased production of rice in northeast Thailand. While in the past, central Thailand was the main producer of rice, northeast Thailand quickly caught up. This was in part due to new road systems connecting northeast Thailand to ports on the coastline. Villages that produced significant rice crops were also changing as farmers evolved from more subsistence practices to mostly wage labor. Exchange labor also virtually disappeared. Exports declined in 2015, to , worth US$4.61 billion, making it the world's second leading exporter of rice behind India, at . Vietnam was third, exporting . up 14.8% year-on-year. Sales revenue rose 15% to 168 billion baht. Of its total annual exports, 70% is commodity-grade white rice and the remainder is
hom mali. Some special grades such as
riceberry contribute a small quantity. The country exported in 2018, but the number plunged to less than in 2019. Thailand's rice export forecast for 2020 is . Thailand's
Future Forward Party has pointed out that, rather than exporting rice solely as a commodity product, it makes more sense to add value to the rice at home and export the resulting product. They point to
indicia rice. Thailand has exported since 1980, about of indica rice, sold at 10–20 baht per kilogram, to Japan where
Awamori, an alcoholic beverage, is produced in Okinawa. The Japanese-made beverage is exported back to Thailand at 2,500 baht per litre, 170 times the price of the raw material. In Thailand, small producers of liquor are barred from entering the business by the 2017 Excise Tax Act, which mandates a minimum production volume of 30,000 litres per day, effectively closing off opportunities for local craft distilleries.
Competition abroad India in 2020 was the world's leading rice exporter. Its exported . Vietnam is fast catching up: it exported in 2019. Thai farmers are losing the productivity battle to other nations; in Vietnam, yields range from per rai, while in Thailand yields average per rai. Vietnam's production costs are estimated to be 50% lower than those in Thailand. Starting in late-2014, Thailand's rice industry was again hit with a drought that extended to 2016. The drought was accompanied by decreasing worldwide demand for rice. The drought was expected to cost the economy about 84 billion baht (US$2.4 billion) in 2016 and sap demand for durable goods. Farmers are suffering: farm output has declined seven to eight percent in each of the past two years and farmers' debt to agricultural income is around 100%. The military government approved 11.2 billion baht of measures in 2015 to help farmers, including encouraging them to plant crops that need less water. Rice is the primary target of the water use reduction campaign because it requires up to two and a half times more water than wheat or maize. The major dams in the central region, the
Bhumibol and
Sirikit Dams, the main water sources for the country's central plain, are at their lowest levels since 1994. The government wants to cut rice production to in the planting season starting May 2016, 25% less than the five-year average.
Land ownership issues Many farmers are in debt to local businessmen for their
mortgages. The percentage of farmers owning land in Thailand has dropped from 44% in 2004 to 15% in 2011. Land rights issues have been exacerbated by political turmoil over the past 15 years. Often new governments fail to honour the land rights commitments made to farmers by past regimes.
Commodity pricing In 2011, farmers in Thailand could sell a kilogram of rice for 16 baht (US$0.50). In 2016, to make 16 baht, a farmer had to sell three kilograms as the worldwide price of rice declined. The fall in price prompted the military government to introduce rice farmer subsidies of 38 billion baht (US$1.1 billion; £860 million). A bright spot on the price front is organic rice. At a time when rice millers pay farmers only 7,000 baht per tonne for paddy, organic rice producers can command up to 45,000 baht per tonne. According to Greennet, a non-profit, sales of organic rice increased by 28% in 2016.
Organic rice Due to a program started over forty years ago by a local monk,
Surin Province produces about of organic jasmine rice per year. A local cooperative, the Rice Fund Surin Organic Agriculture Cooperative Ltd, exports its rice to France, Hong Kong, Singapore, Switzerland, and the United States. Surin organic rice farmers receive fifteen baht (US$0.43) per kilogram of
paddy, compared with the market price of nine baht per kilo for non-organic jasmine. As the organic rice farmers do not pay for chemical inputs, each can earn about 80,000 baht (US$2,285) per crop on an average-sized farm of 15
rai (). The success of the organic rice cooperative has been identified as one factor in the significant reduction in poverty in Surin as compared with its neighboring province,
Sisaket, a province with similar demographics and geography. ==Science-based initiatives==