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FTAs ’will hurt small farmers’

The Nation, Bangkok

FTAs ’will hurt small farmers’

Govt should step in - Commerce official

7 May 2007

The government should come up with concrete measures to assist small-scale farmers, who are likely to be adversely affected by bilateral free-trade agreements. Otherwise they will be forced to go out of business.

This is the view of a Commerce Ministry official who has been involved in several bilateral trade negotiations.

Pawin Talerngsri, director for Agriculture and Environment at the Department of Trade Negotiations, says in a research paper that although farm output accounts for a small proportion of the nation’s gross domestic product, the sector employs a majority of people.

The sector also provides a safety net for blue-collar workers when they are unemployed, he says.

However, the farm sector is likely to be adversely impacted by the emergence of bilateral trade agreements, he warns.

The government has inked a number of bilateral trade deals, among them FTAs with Australia, New Zealand and Japan.

The government also signed an "early-harvest" agreement with China to open up the two markets for fruit and vegetable products.

The agreements lead to the end of trade barriers such as tariffs, quotas and sanitary requirements. The details of each trade product and each FTA vary according to the result of negotiations.

Pawin categorises farmers into three groups.

First, large-scale farmers who are exporters are likely to benefit from FTA agreements by expanding overseas; but they are few.

Second are progressive farmers who aim to develop their procedures to sell their products overseas and may contract with buyers for products at guaranteed prices and fulfil conditions such as greenhouses and limited fertiliser.

They are few but could grow and indirectly benefit from FTAs.

Third, the majority of Thai farmers are small-time with low funding and small areas dependent on weather and geography, growing for their own consumption and selling the surplus for cash; they are likely to suffer from FTAs.

If they are lucky enough to grow the kind of crops that Thai’s FTA partners do not grow, such as rice, they may survive, Pawin says.

For instance, many Thai farmers earned their living by selling garlic but are facing cheaper garlic from China as a result of the Thai-Chinese FTA.

Pawin says the government should consider gradually reducing tariffs on farm products which small Thai farmers have been dependent on.