Thailand: Stay off my rice paddy

BANGKOK, Thailand — To many tiny, overdeveloped or arid nations, Southeast Asia’s jade-green fields have never looked more desirable.

Rich countries barely able to eat off their land — think Singapore or Saudi Arabia — have in recent years secured vast African or Southeast Asian farmlands to feed their people. Qataris and Saudis control millions of farmable acres in the Philippines and Indonesia. Corporate interests in Singapore just inked deals to pour $40 million into Cambodia’s largest corn plantation.

Even Burma’s military junta promises via its clunky website to waive taxes for foreign investors seeking farmland.

As for Thailand? The world’s leading rice exporter and one of Asia’s most fertile nations? Forget it. Mere rumors of Arabs nabbing Thai rice fields through proxies has stoked a patriotic backlash and recharged Thailand’s anti-colonial spirit.

“It’s easy to whip up nationalist sentiment in Thailand,” said Supavud Saicheua, executive director of the Bangkok-based Phatra Securities firm. “Even the specter of foreign domination gets people upset.”

Even in a global food shortage, and against the advice of respected economists, Thailand appears unlikely to sell rice paddies to outsiders. To many Thais, that would be like ceding a piece of the kingdom’s soul. The paddies symbolize boundless fertility, a social safety net waiting to nourish and provide for those who’ve lost work elsewhere.

Thailand’s proud resistance to invaders — it’s the only mainland Southeast Asian nation that escaped colonization — lives on in a wall of legal barriers to foreign ownership. Foreigners are forbidden from owning Thai land, farming Thai soil or, outside of exemptions, owning a business without a Thai joint venture.

But according to a recent broadcast by the Thai PBS channel, Middle Eastern businesses secretly undermined Thai sovereignty last year by buying up rice farms through surrogates. That report set off fears that a new wave of agri-colonialists has Thailand in its sights, even after a government investigation turned up no illicit proxy farms.

Foreigners are explicitly banned from agriculture through Thailand’s Foreign Business Act, which also sets aside fisheries, legal services, restaurants and tourism as industries in which “Thai nationals are not yet ready to compete with foreigners.”

Some experts disagree, arguing that barriers to outside competition preserve monopolies and maintain appalling inefficiencies in Thai-only sectors. Even Thai industries that are likely fit to compete with foreigners, such as the award-winning advertising sector, remain on the no-foreigners list.

“When you look at it as a sportsmen, it would be like you play golf, you’re a single handicap player, but you declare a handicap of 20,” said Nandor von der Luehe, chairman of the Joint Foreign Chambers of Commerce in Thailand.

Politicians assume that voters will cry treason if they ever invite foreigners to compete with Thais — and outright revolt if they break down barriers to rice farming. But this most sacred of livelihoods happens to be one of Thailand’s least efficient. Though roughly 43 percent of the Thai labor force works in agriculture, the sector only contributes 12 percent to the national GDP.

Thailand, preparing to export 9 million tons of rice in 2010, is unmatched as a rice exporter. But lesser-developed countries such as Indonesia, Malaysia and the Philippines reap far more rice per acre than Thailand, according to research by Andrew Walker, professor at Australian National University. Productivity is less than half of Asia’s combined figure and ranks among the world’s lowest.

“If you could put in foreign capital and consolidate land and have a bigger economy of scale, you could make those returns much higher,” Supavud said. “But that triggers all sorts of anti-foreign sentiment.”

One of Thailand’s best-known axioms equates prosperity with having “rice in the fields and fish in the waters.” But more young, upcountry Thais are ditching family rice fields to try their luck in Bangkok. This internal migration trend is even reflected in Thai country music radio, replete with songs of struggle and success in the big city.

The “hollowing out” of able-bodied farmhands, Supavud says, is yet another drag on productivity. “The land is left to older generations,” he said, “who farm in an inefficient way.” A foreign-led revitalization of the farming industry, he said, might threaten Thai agricultural bosses but could improve the lives of everyday farmers.

As the world struggles with food scarcity, crowded and dry nations will likely covet Thailand’s lush farmland more and more. Some economists predict that future food shortages will render this territory too valuable to squander through inefficient farming practices.

But, for now, Thai society still can’t stomach foreign control of its heartland, said Duenden Nikomborirak, research director at the Thailand Development Research Institute. And the current government, held together by a loose coalition of interests, is too fragile to risk public reprisal.

“Any changes to the (Foreign Business Act) would need a very strong government willing to bear a political cost,” said Duenden. “And I don’t see, in the near future, any government that could bear that cost.”