KResearch forecasts that the overall farm prices in Thailand in 2019 will decline by 0.2-0.6 percent, following a 5.9-percent contraction over-year. Prices of farm goods dropped across the board, especially main commodities such as rice, rubber, tapioca, sugar cane and palm oil, which are being pressured by an outstanding surplus in the market and a drop in demand from China.
In 2019, KResearch views that the government's agricultural assistance policies will be crucial for the farm sector. The government's ongoing farm support measures which follow up on the projects implemented in the previous year, especially the short-term ones, including direct subsidy and income support for farmers will be key factors to stabilize farm prices in 2019 and shore up farm income. Hence, farm income in 2019 is likely to remain close to the level in 2018 as it is expected to contract slightly by 0.4-0.8 percent, mainly due to a slump in prices.
For the long-term agricultural policies of the government, KResearch views that the policy should aim at restructuring the agricultural sector by increasing farm yields, reducing production costs and applying technology to add value to products. The effort to elevate the Thai farm sector takes time and the government should focus on helping them with infrastructure investment. Additionally, they should equip farmers with knowledge and enable farm entrepreneurs to better access technology with reasonable cost. It is also important to bring the agricultural reform guideline (Farming 4.0) under the 20-year National Economic and Social Development Plan (2017-2037) into fruition as soon as possible.