AN ANALYSIS OF FACTORS AFFECTING
PRICE OF RICE IN THAILAND

Thesis for the Degree of M. S.
MICHIGAN STATE UNIVERSITY
CHAIWAT KONJING '
1970

   
   

"’ LIBRARY

Michigan Staco
University

 
 
  

    

 

S ’ ‘
\ mpun“u1INn£ijjF"ics' I
my

 

 

ABSTRACT

AN ANALYSIS OF FACTORS AFFECTING
PRICE OF RICE IN THAILAND

BY
Chaiwat Konjing

The main purpose of this study is to develop infor-
mation concerning the current situation in price, production,
and marketing of rice in Thailand which is necessary for
further developing rice policy. Knowledge of price and
marketing patterns as well as the demand and supply struc-
ture as developed in this study can be of value in produc-
tion planning and orderly marketing of rice for both today
and the immediate future.

Because of the importance of rice as a national
crop, there are many conflicts and controversies concern-
ing the direction of price and production policy for rice.
The problem of to what extent rice production should be
encouraged, and what price policy should be followed so
that the farmers benefit as much as possible from what
they produce but not at the expenses of the consumers are

of much concern and are answered partially by this study.

Chaiwat Konjing

The study includes a general discussion of current
marketing and production of rice, an analysis of time-
series of rice prices in both domestic and export markets,
and a statistical estimation of the demand and supply for
rice in Thailand. All analyses are based on secondary data
obtained from various publications available from Thai
government agencies or from the United Nations.

The findings in this study reveal that Thailand's
rice industry has characterized by the upward trends in
both rice production and price, particularly the price of
paddy. At the same time, the degree of competition in the
rice market has increased as a result of the develoPment
of improved transportation and the relocation of the rice
mill industry.

The seasonal variation in quantities of paddy
delivered along-side mills in Bangkok metropolitan market
has been increasing significantly over time. The quantity
exported and export price each also exhibits a significant
increase in seasonality pattern. Furthermore, there is a
small seasonal variation in domestic prices of rice partic-
ularly the price of rice (100 - 5%), and the price of paddy
(no. 1) at wholesale level in Bangkok; but there is no
evidence that seasonal patterns in these domestic prices
are changing significantly.

An analysis of statistical supply of rice reveals

that the annual variation in rice production has been

Chaiwat Konjing

explained partially by the past year's price of paddy, trend,
and the past year's acreage. The supply of rice is relative—
ly inelastic. The estimated demand equation for rice is much
more reliable than the supply equation. About 81 percent in
the annual variation in price of rice at Bangkok wholesale
level is explained by the association of the estimated quan-
tity of rice produced, the quantity of wheat imports, the
quantity of rice exports, personal income per capita, trend,
and the rice export tax. The price flexibility of demand
for rice of 0.27 has been found with unexpectedly positive
sign. The evidence implies that the demand for rice partic-
ularly rice (100%) in Thailand is unbelieveably elastic.
Based on these results, it leads to the conclusions
that a policy for increasing rice production as well as
rice export and market expansion should be emphasized. The
price incentive programs in the form of input subsidies
and/or minimum price guarantee should be followed to stim-
ulate rice expansion, and at the same time to lessen price
variation which are partially affected by the seasonality
in both production and market supply of rice. An increase
in rice production will benefit the consumer to the extent
that they can buy rice and other food items with lower
prices and therefore, less expense. At the same time, the
economy will benefit from more foreign exchange earning as

a result of an increase in rice exports.

AN ANALYSIS OF FACTORS AFFECTING

PRICE OF RICE IN THAILAND

BY

Chaiwat Konjing

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirements
for the degree of

MASTER OF SCIENCE

Department of Agricultural Economics

1970

ACKNOWLEDGMENTS

The author wishes to express a special gratitude
to Dr. Lester V. Manderscheid, my major professor, for his
constructive guidance and recommendation in preparation of
this thesis. His helpful comments and patient editing on
the text of this study are also very gratefully acknowledged.

Special thanks are also extended to Dr. Nicolas G.
M. Luykx II who provided personal guidance. His advice
and moral support in providing information needed in con-
structing the framework of this study are very much appre-
ciated.

Thanks are due to Miss Laura Robinson and other
personnel in the Michigan State University's Computer
Center, for their great help in preparing the mathemati-
cal computation programs. Without their contributions,
this study could not have been accomplished.

Special acknowledgment is due to Dr. Sopin Tongpan,
Dr. Kamphol Adulavidhaya, and all of my colleagues at
Kasetsart University for their help in providing informa-
tion needed by this study.

Appreciation is also expressed to the Agricultural
Development Council, Inc., New York, for its financial
supports which enable me to complete my program at Michigan

State University.
ii

TABLE OF CONTENTS

iii

Page
ACKNOWLEDGMENTS O O O I O O O O O O O O O O O O i i
LIST OF TABLES O O O O O O O O O O O O 0 O O 0
LIST OF FIGURES O O O O O O O O O 0 O O O O O 0
Chapter
I 0 INTRODUCTION 0 O O I O O O O O O O O O O 1
Prbb lem O O O O O O O O I O O 0 O O O 1
Objectives of the Study . . . . . . 9
II. A REVIEW OF THE THAI RICE ECONOMY . . . _10
Rice Production . . . . . . . . . . . 10
Rice Acreage . . . . . . . . . . . . 10
Production and Yield . . . . . . . 15
Domestic Rice Trade and Market . . . . 20
Rice Marketing Channel . . . . . . . 20
Farmers and Paddy Supply . . . . . . 22
The Middleman O O O O O O O O O O O 2 2
Rice Mill Industry . . . . . . . . . 23
Storage . . . . . . . . . . . . . . 25
Rice Grading . . . . . . . . . . . . 26
Direction of Interregional Flow
Of Rice 0 O O O 0 O O O O O O O O O 2 8
Transportation . . . . . . . . . . . 28
Domestic Demand for Rice . . . . . . 31
Th ai Rice Exports 0 o o o ‘ o o o o o o 3 6
Significance of Rice Export Trade . 36
Trade Pattern and Demand for
Rice Exports . . . . . . . . . . . . 38
III. TIME-SERIES ANALYSIS OF RICE PRICES . . 42
Long-Time Price Movements . . . . . . 42
Trends in Domestic Prices and
Productioniof Paddy . . . . . . . . 43

Chapter

IV.

Prices in Other Rice Exporting
Countries . . . . . . . . . . . . .
Trends in Thai Export Prices and
the World Rice Prices . . . . . . .

Seasonal Price Patterns . . . . . . .
Seasonal Domestic Price Calculations
Seasonal Variations in Paddy Supply
Domestic Seasonal Price Variations .
Seasonality in Quantity and Price
of Rice Exports . - . . . . . . . .

Relationships Between Domestic
Price, Export Price, and the
World Export Price . . . . . . . . . .

Relationship Between Domestic

Paddy Price and White Rice Price . . .
Relationship Between Paddy Price

and Quantity of Rice Exports . . . . .
Relationship Between Domestic Price
of Rice (loo-5%) and the World Price .
Relationship Between Thailand's
Average Export Price and the

World Export Price . . . . . . . . . .

DEMAND AND SUPPLY OF RICE . . . . . . .
Introduction . . . . . . . . . . . . .
The Data . . . . . . . . . . . . . .
Period Covered in the Analysis . . . .

The Me thOd O I O O O O O O O O O O O
The Statistical Model . . . . . . .
The Economic Model . . . . . . . . .

Discussion of the Results of

Analyses . . . . . . . . . . . . . . .
Estimated Demand Equation . . . . .
Estimated Supply Equation . . . . .
Alternative Estimate of Supply
Equation . . . . . . . . . . . . . .

Conclusions and Policy Implications .

General Conclusions . . . . . . . .
Policy Implications . . . . . . . .

iv

Page

46
48
49
52
54
56

59

65

65
65
65

68
72
72
73
74

75
75

79
79
82

84
86

86
88

Chapter Page

V. SUMMARY AND SUGGESTIONS FOR FURTHER

STUDY 0 O O O O O O O O O O O O 0 O O O 93
smary O C I O I O O O O O O O O O O 9 3
Suggested Further Study . . . . . . . 98

BIBLIOGRAPHY . O O O O O O O O O O O C C O O O O 100
APPENDIX A O O O O O O O I O O O O 0 O O 0 O O 105

APPENDIX B: STATISTICS ON SEASONALITY . . . . . 110

Table

2.1

LIST OF TABLES

Page
Rice Acreage and Production by
Geographic Regions, Thailand,
1954 - 1966 o o o o o o o o o o o o o 23
Rice Exports: Private Exports and
Government's Exports, Thailand,
1951 _ 1969 o o o o o o o o o o o o o 40

vi

Figure

2.1

2.5

3.1

3.3

3.6

LIST OF FIGURES

Rice Production Shares Among the Four
Regions of Thailand, 1954 - 1966 . . .

Indexes of Acreage of Principal Crops
in Thailand, 1954 - 66 o o o o o o o 0

Index of Rice Acreage, Production, and
Yield in Thailand, 1907 - 1966 . . . .

Direction of Interregional Flow of Rice
in Thailand, 1965-66 . . . . . . . . .

Estimate and Projection of Rice
Production, Consumption, and Exportable
surplus, Thailand, 1950 - 1980 o o o 0 V

Annual Wholesale Price of Grade No. 1
Paddy and Annual Rice Production,
Thailand, 1950 - 1967 o o o o o o o o

Paddy Price Indices in Thailand, The
United States, Japan, Republic of
Viet-Nam, and United Arab Republic,
1950-67 . . . . . . . . . . . . . . .

Rice: Indices of Annual Export Price
in Thailand, Burma, and the World
Export Price Index, 1955-67 . . . . .

Index of Seasonality in Quantity of Paddy
Bought by Bangkok and Thonburi Millers,
Thai land 0 O O O O O O O C O O O O O 0

Index of Seasonality in Price of Paddy
(No.1) Delivered Along-Side Mills in
Bangkok and Thonburi, Thailand . . . .

Index of Seasonality in Price of Rice

(100 - 5% White Rice) in Bangkok,
Thailand 0 O O O O O O O O O O O O O 0

vii

Page

11

14

18

29

35

45

47

50

55

57

58

Figure

3.7

3.11

3.14

Page
Index of Seasonality in Quantity of
Rice (All Grades) Exports,Thailand . . 60
Index of Seasonality in Quantity of
Rice (5% broken) Exports,Thailand . . 61

Index of Seasonality in Export Price
of Rice (5-7%) (f.o.b. Bangkok), Thailand 62

Indices of Price and Quantity of Rice
(5-7%) Exports,Thailand 1956-68
(Monthly Basis, 1957—59 = 100) . . . . 64

Indices of Domestic Price of Rice
(loo-5%) and Paddy (No. 1) Price,
Thailand, 1950-66 (Monthly Basis,
1957-59 = 100) . . . . . . . . . . . . 66

Indices of Prices of Paddy (No.1)

and Quantity of Rice (All Grades)
Exports,Thailand, 1951-1966 (Monthly

Basis, 1957-59 = 100) . . . . . . . . 67

Indices of Thai Domestic Wholesale

Price of Rice (loo-5%) and the Average

World Price, 1957-66 (Monthly Basis,

1957-59 = 100) . . . . . . . . . . . . 69

Indices of Thai Average Export Price

(with premium), and the Average World

Export Price, 1957-65 (Monthly Basis,

1957-59 = 100) . . . . . . . . . . . . 70

viii

CHAPTER I
INTRODUCTION
Problem Setting

For Thailand, rice is one of the most important
crops in the economy, being both the staple food of the
people and the main foreign exchange earner. In the period,.
of 1961-1963, rice alone constituted 13 percent of GNP,
36.2 percent of the income from agriculture, and 35.1
percent of exports.1 According to the 1960 population
census, 74.6 percent of the total population resided in
the agricultural sector. Of this, over 75 percent were
rice farmers.2 Because of the dominant position of rice
in both production and consumption, rice policy is of
critical importance in the economy. More particularly,
Thailand is no exception in being concerned with market
and price policy for its major food grain such as rice.
Since the majority of population is engaged in agriculture,

and since agriculture constitutes a major part -- 80 percent

 

1Office of National Economic Development Board,
Thailand, National Income Statistics 1964, pp. 90-91.

 

2National Statistics Office, Thailand, Thailand
Population Census 1960, Table l.

 

l

3 changes in agricultural price policy should

of exports;
be expected to affect the overall economy.

While the expansion of production in rice in
Thailand is encouraged, technologically, it at the same
time, creates a number of marketing problems and contro-
versies. One of these difficulties is a matter of the
fair price of rice under the free pricing system. A
large number of farmers wish to sell at a high price but
a large number of consumers wish to buy at a low price.
Change in rice price, thus, affects both farmers and con-
sumers. For farmers, a higher rice price means more
income and a greater incentive to grow rice. In contrast,
for consumers, a higher price of rice means a higher cost
of living and thereby a lower level of living. More
briefly, a change in rice price benefits some segments of
the economy at the expense of others.

Since these two attitudes are inconsistent, the
introduction of a rice price policy designed to satisfy
all groups in the economy needs primarily careful evalua-
tion of the factors concerned. Another difficulty in the
Thai rice economy is the common problems of the uncertainty

of the farm production. Those who are engaged in agricul-

ture are subjected not only to low income earnings but also

 

3Melvin M. Wagner and Sopin Tongpan, "The Structure
of Thai Rice Prices: Some Preliminary Findings," Proceedings
of the Fourth Conference on Agricultural Economics, Bangkok,
Kasetsart UniVersity, 1965, p. 203.

to wide fluctuation in both prices and production. Such
instability associated with a lack of agricultural knowl-
edge forces farmers into a vicious cycle of poverty.4 This
is inconsistent with the objective of the free price economy.
The price mechanism under free price system is assumed to
provide two beneficient major functions:5 (a) Guiding the
allocation of resources in production; (b) channelling
products into trade. The additional two functions -- (c)
stabilizing income over time; and (d) reducing inequity of
income among families, introduced by some economists6 appear
relevant to a free price economy but to some extent they are
debatable; since these additional two functions are generally
related to other social problems in the economy in addition
to the issue of free price mechanism. It, therefore, may

or may not be necessary that the stabilization of income
over time and reduction of inequity of income among the-
individual families can be secured solely by the performance
of the free price system. Nevertheless, in order to fulfill,

particularly, the first two functions of free price economy,

 

4Chaiyong Chuchart and Sopin Tongpon, The Determina-
tion and Analysis of Policies to Support and Stabilize
Agricultural Prices and Incomes of the Tfiai Farmers (with
Special Reference to RicegPremium). Bangkok:iasetsart
University, 1965, p. 1.

5Ibid, p. 1.

6For more detail see Chaiyong Chuchart and Sopin
Tongpan, The Determination and Analysis of Policies to
Su ort and Stabilize Agricultural Prices and Incomes of
the Thai Farmers, Bangkok: Kasetsart University, 1965.

 

it is necessary that the price program in Thailand should
be heavily concerned with major crops such as rice, in an
attempt to encourage production; to stabilize the prices
of farm products; and then to improve farmer's income as
well.

With the state of farming system in Thailand today,
it is hard to believe that the production of rice is in—
creasing as a result of a factor, the farmer's incentive
to increase rice production in response to a higher price.
A study made by Sanittanont7 indicated that the price
elasticties of rice production with respect to the acreage
expansion are roughly less than 0.3 in the short-run and
0.6 in the long-run,8 since most farmers are still subjected,
to the large extent, to the risk and uncertainty of the
traditional farming -- the variations of the natural and
economic environments. The study also indicated the low
level of the farmer's incentive to increase rice production
by the application of modern techniques such as the use of
commercial fertilizer, since the paddy prices in Thailand
are relatively low compared to the prices of fertilizer.9

Low paddy prices means low returns, in monetary terms, to

 

7Sura Sanittanont, Thailand's Rice Export Tax: Its
Effect on Rice Economy, Doctoral Dissertation, University
ofIWisconsin, I967.

 

81bid, p. 93.

9Ibid, p. 98.

increasing output which its production cost is relatively
high. These facts imply that under the current rice market-
ing policies, the rice production will not increase at a
more rapid rate without either an increase in paddy prices
or a reduction in the cost of production, particularly the
lower prices of fertilizers.

A pessimistic study made by Roy10 have also called
attention to increase rice production in the Thai economy.
The study indicated that Thailand will face with the prob-
lem of rice deficiency sometime during this decade. The
rapid population growth will require an increase in the
amount of rice for domestic consumption, even if the amount
of rice export will be gradually declining. His study
leaves us the significant conclusion that, with his es-
timate of the rate of per capita rice consumption require-
ment11 the trend of domestic rice consumption will pass
that of production sometime between 1976 and 1980. The
date of Thailand's metamorphosis from a rice surplus to a
rice deficit country thus looms on the horizon no more than
10 years away and possibly sooner.12 To cope with this

problem, or at least to partially remedy the impending crisis

 

loEdward Van Roy, "The Multhusion Squeeze on Thailand's
Rice Economy," Asian Survey, VII. (November, 1967).

llThe detail will be discussed later.

lzlbid, p. 474.

in rice, a policy issue with an emphasis on increasing

rice production associated with increasing in farmer's

incentives and stabilizing prices should be immediately
come into consideration.

But, others hold different views. Some economists
believe that within this decade, Asian countries will be-
come self-sufficient and will increase their rice exports
into the world market.13 The success in subsistence level,
or in other words, the "Green Revolution" in these coun-
tries will certainly cause significant rice surplus prob-
lems for this part of the world. The significant increase
in rice production is presumably due to the adoption of
the new varieties of rice such as IR-8, the use of fer-
tilizer, pesticides and insecticides and so forth. If this
possibility be true, however, the price policy which is
ideal for increasing rice production will not be ideal.

In this connection, the development of a different policy
is definitely required; but the same basic information is
needed for either case.

As far as a policy is concerned, however, nobody

can effectively enhance this effort except the government.

 

13Economists like Clifton R. Wharton, "The Green
Revolution" Foreign Affairs, Council on Foreign Relations,
Inc., New York; (April 1969), pp. 464-476. Joseph W.
Willett, The Impact of New Grainfiyarieties in Asia, USDA
ERS-Foreign No. 275, Washington, D. C. 1969.

 

It is agreed that, practically some policies issued by the
government create many conflicts, and the government itself
cannot find any equitable solution. With an Optimistic
attempt, however, to insure that rice availability for
domestic consumption is adequate, stable and reasonably
priced, the Thai government has stepped into the rice mar—
ket since the early days of the country.14
In this connection, some policies were issued.
One of these is the policy on rice export tax aimed at
regulating rice exports and insuring the availability of
an adequate supply for domestic consumption. At the same
time, the government earns a substantial part of its rev-
enue from the rice export tax. The price and quantity of
rice export is adjusted by simply changing the export tax
rate in relation to the change in price and quantity of
rice in the world market. Two other policies were the
domestic market minimum farm price guarantee and the Rice
Marketing Cooperatives, but these are on limited scale and
temporary basis. Regardless on the basis of these policies,
the government assumes that they should benefit both farmers
and consumers and all other groups concerned. But the ques-
tion of what should be the range of policies to be employed

in order that it will be working successfully, has not been

 

l4Sopin Tongpan, An Economic Analysis of the Price
of Thai Rice, Unpublished Doctoral Dissertation, Ohio State
University, 1969, p. 1.

 

given much consideration. Moreover, as the economy of
Thailand continues to grow and change, the price policy
which is ideal today will probably not be ideal in the
future. No matter for what situation a price policy for

a particular commodity is developed, it is necessary that
basic information concerning the production and consumption
patterns of that commodity be investigated; and its price
behavior in both internal and external markets be deter—
mined. Also, other economic variables affecting prices
and their impact on the market must be evaluated. For
instance, knowledge of the nature of both domestic and
export demand and supply would help provide basic informa-
tion to the policy makers to decide what action might be
appropriate so that the desirable results in price and

market policies are most likely attained.

Objectives of the Study

It is not the purpose here to examine specific
policies, but rather to study the general principles and
factors considered of primary importance in the pricing
of rice. More specifically, the purposes of this study
are:

(l) to describe the rice price behavior both in
domestic and export markets.

(2) to examine the effects of economic variables
on the domestic prices of Thai rice.

(3) To discuss some points of view toward the
rice policy in Thailand, particularly the
implications of pricing policies for Thai
rice trade.

Since there are very few studies on Thai rice

market and policies, this study is supposed to provide

some basic estimates of rice price behavior in this

country.

CHAPTER II

A REVIEW OF THE THAI RICE ECONOMY

Rice Production

Rice Acreage

 

Rice production has been the main occupation of the

Thai people for generations. This occupation occupied 41.3

million rai1

2

or 13 percent of total cultivated areas in
1963. From available records, the rice acreage has in-
creased year by year. From 1907 to 1966, or over the past
60 years, the rice area has increased by more than 300 per-
cent. That is, it increased from 9.3 million rai in 1907
to 41.3 million rai in 1963 and up to 46.1 million rai in
1965.3
Geographically, (Figure 2.1), Thailand is divided
into four regions, namely the Northern, the Northeastern,

the Central and the Southern region. Rice production can

be found in almost everywhere throughout the country. But

 

1rai is equal to 0.395 acre.

2Thailand, Division of Agricultural Economics,
Agricultural Statistics of Thailand, 1963 (Bangkok: 1965),
p. 162.

3Thailand, Division of Agricultural Economics,
Agricultural Statistics of Thailand, 1966. (Bangkok: 1968),
p. 47.

 

10

11

BURMA

    

'8 FIGURE 2.1: RICE PRODUC-

6'. 0 0
' {7 TION SHARES
AMONG THE FOUR
~ 0 U r REGIONS OF
THAILAND 1954-
’x f “

GULF OF THAILAND

BAY OF BENGAL

Source: Table 2.1

9‘ i‘

M A L A Y S

12

 

.me .m .Ameme "xoxmssmc

 

.mwma .UGOHHMSB

 

 

mo mowpmflumum amusuHOOHHmm .mOHEocoom Hmnsuasowumfi mo conH>HQ .Ocmaflmsa "mousom
I OOH m.m >.Hm m.mm e.oa ooa vo.m ma.mv ma.mm om.m unwoumm
mum mmm.m mom nmmev Hawem wmm mwm.mm mmo.m mmhsha moasma mvm.m mmwum>¢
mum mnm.aa omm mmaem Hmmsm ONH.H mmo.>v mmv.v mmv.om nhvsma ovhem mmma
mvm mamem vhm moosm NNN.N hmosa «mesov mmm.m Hmm.ma mmasma mbmem mmma
mmm ovwem mmn hma.m vow.~ mmm omwsov mmm.m Hmvsma one.ma Humsm vmma
mmm mma.oa mam mwmsm omo.m mom bumsae me.m mmwema omm.mH mam.m moma
ovm omm.m men oom.v ~mo.m mmm hamsav oma.m whoema ommeba momsm Nwma
Hmm wha.m how mhmev mmm.m whm mam.mm vmm.m amoeba mov.ma mhm.~ Hmma
mmm mmm.h mmm mHH.v mmm.m mmb moosbm camem amoeba bmmeea omm.m coma
mom curse new women omo.~ was momshm hem.m whosha Hmv.ma vmm.m mmma
mam mmoeh emm amusm mnm.a om» 5mm.mm me.m Hmoeha mmvsma mmvem mmma
mom osmsm mmm wmm.m mbmea mum mmh.am mmm.~ om~.ma wmm.oa Havem bmma
omm hamsm How emm.v mamsm mmh www.5m mmm.~ mamema hamema omm.~ mmma
mam vmmeb chm mmhsm omH.m mew omosmm th.m mvvswa mam.¢a vasm mmma
mom monsm hmm hmmem one.a mmm mmwsvm Heoem mwa.na mmaema mmm.m vmaa
mama» Hmuos nusom Hmuucmu ummm nphoz Hmuoa Epsom Hmuucmu ummm nuuoz
mmmum>4 Inuuoz Inuuoz
Agog owuumfi oooeav cofluospoum Aflmuwoooeav mmmmuofi Ham»

 

 

semauemma .sssaflsse .soflomm senesumomo we

H.N mqmflfi

coaponpoum ocm Ommmnod OOHm

13

a high percentage of total rice areas is concentrated in
the Central region, where it was 46 percent of rice acreage
during 1954-1966. The Northeastern region is the second
largest rice area and it accounted for 39 percent. The
Northern and the Southern regions are the smallest, where
the rice acreage was only 7 percent in the North and 8
percent in the South.4 However, from the previous study
made by the Division of Agricultural Economics, Bangkok,5
it indicated that even though the rice acreage has increased
by more than 300 percent over the period of 1907-1966, during
the last 15 years the rate of increase has declined. |
Particulary, during 1951-1956 there was no upward
trend in acreage. During 1958 to 1962, however, it did
increase sharply then decreased slightly in the later years,
1963-1965. These variations in rice have been found in all
parts of the country. During the past 15 years, it is also
found that the Northeastern region represented the largest
increase in rice area. The increase was 61 percent or from
12.2 million rai in 1954 to 19.5 million rai in 1966 (Table
2.1). Acreage in the Central region increased approximately
20 percent. About 12 and 50 percent increase occured in the
Northern and Southern region respectively, during 1954-1966.

The overall acreage increased 36 percent in the same period

 

4See Table 2.1.

5Thailand, Division of Agricultural Economics, A
Study on Rice Productiogand Consumption in Thailand,
(Bangkok: 1967), pp. 6-7.

14

FIGURE 2.2
INDEXES OF ACREAGE OF PRINCIPAL CROPS IN

 

 

 

 

INDEX IN THAILAND, 1954 - 1966.
x
I
I
/
l
700 ‘ I
I
I
I
/
/
600 r ,,/;
Fiber ‘— /"
./
500 +- /
./
400 - .
/_M ,-~—Upland Food Crops
./
300 . '
/
//
200. ./,- ----- I”,,.
' Oil Seeds -—,”"
o/. //~-‘-/” ,J'
./. ,”-----—--” A11 Crops (ExcethicQ-o/
o ” //..—-——"-° ./
’.--’ “"-—_—. ._.——0—o— ._ /
— . o . / _ .‘I’.’.____. o— —o——o
100 “27:51" '%.{’.,.—— "‘ \Rice
0 Jr 5 I 1 1 J I 1 g l l
1954 .55 56 57 58 59 60 61 62 63 64 65 66
YEAR
Source: Thailand, Division of Agricultural Economics,

Agricultural Statistics of Thailand, 1966.
B

angkok: 1968), pp. 35-38.

15

less than those in the former periods. The increase in
acreage in the period of 1907-1920 was 64 percent, and in
the period of 1920-1948 was 113 percent.6 The reasons for
the recent slow rate of increase in acreage are due to the
limitation of geographic expansion of rice area since

water supply is the most important limiting factor. At

the same time, Thailand has achieved a certain degree of
farm diversification. The areas devoted to other principal
crops such as corns, kenaf, and fruit tree, etc., were more

than double during the past decade (Figure 2.2).

Production and Yield

 

Rice production depends on acreage and yield.
Production increases as either planting area or yield
increase. Agriculture in Thailand still, to large extent,
depends upon weather conditions. As a consequence, rice
production is obviously characterized by sharp year to
year fluctuation in output. Rice harvest tends to be poor
when there is inadequate rainfall, but excessive water
supply is also a detriment to rice crops. In the long-run,
however, rice production has been considerably increased

since the early 1900's. The average output during 1907 to

1919 was about 3 million tons,7 during the period of 1920

 

61bid, p. 10.

7Ton as used in this study refers to metric ton.

16

to 1947 and 1948 to 1962 were 4.5 and 7 million tons respec-
tively.8 The production increased to the high of 12 million
tons of paddy in 1966 (Table 1). The increase in rice pro-
duction in each of three periods were 65 percent in 1907

to 1919, 60 percent in 1920 to 1947, and 36 percent in

1948 to 1962.9 The rapid growth rates in rice production

in the first two periods were due to the substantial in-
crease in acreage since some more arable lands were avail-
able, and to the increase in demand for rice as population
increase. However, the increase in rice production varied
annually associated with annual variation in yield per rai.
In term of long-trends in paddy yield per rai, it also,

can be divided into three periods over the entire period

of 1907-1966:10 (1) period of little change in yield but
rapid growth in output and acreage, 1907 to 1919; (2) period
of declining yield and slow growth in production and area,
1920 to 1947; (3) period of rising yield with slow growth

in production and moderate growth in area, from 1948 up to

__..a-"—"“

the present. Associated with the variations of paddy yield

in each period, the variations of the yield per rai among

 

8Thailand, Division of Agricultural Economics, A
Study on Rice Production and Consumption in Thailand,
TBangROR: 1967), p. 10.

91bid, p. 10.
loSopin Tongpan, An Economic Analysis of the Price

of Thai Rice, Unpublished'Doctoral Dissertation, Ohio State
University, 1969, p. 8.

 

17

the four regions also existed. In the period of 1948 up
to 1963, there was an apparent increase in yield in all
region. Among the four regions, the Northern region
possessed the highest average yield and acquired the most
rapid yield increases over the last 16 years. This is due
to the better irrigation system in the North. In contrast,
the Northeastern region acquired a very low paddy yield
and the rate of increase is very slow since most land
areas and irrigation systems in this region are relatively
poor.

Considering the trends of paddy yield in the past
60 years, it obviously indicates a downward trend until
1959 with many fluctuations associated with the variations
in weather conditions. Even though more land areas has
been used for rice cultivation and thereby total output
has increased, the average yield, in the contrary, has
exhibited in the negative manner. (Figure 2.3) This is
because of the following two reasons in addition to the
effect of the weather: (1) The supply of the fertile land
is limited and as farming becomes more extensive, more use
of less desirable land without the application of fertiliz-
ers results in less paddy yield; and (2) the same land
areas were used for only single crop, rice, year by year
without knowledge of how to maintain soil fertility. Produc-
tivity of land has subsequently declined. Fortunately, the

downward trends in the yield has been revealed since 1960

18

FIGURE 2.3

INDEXES OF RICE ACREAGE, PRODUCTION, AND YIELD
IN THAILAND, 1907-66.

(1927 - 1936 = 100)

 

  
  
 

 

 

 

INDEX
I
I
300 l
I
I
I
I
I
|
| ‘
I -.
200 1- I
I
I Acreage-—
I
I
: .—Production
I
I
100 - I
| -Yield
I
|
I
l
I
I
I
0 I l I l
1907-~1927- 1946 1956 1966
1916 1936 YEAR

Source: Computed from data in Agricultural Statistics of
Thailand, 1966, (Bangkok: 1968), PP. 46-47. Using
1927-36 as base year period.

19

by the expansion of irrigation projects and to a large
extent by the desirable weather conditions. At the same
time, the government efforts in an attempt to improve the
rice varieties has been working out. Also, the applica-
tion of commercial fertilizers has been encouraged.
However, two previous studies, the studies made by

11 and Berhman,12 indicated that changes in rice

Soothipan
production in Thailand in the past were due mainly to the
effects of irrigation and damaged area. The modern tech-
niques made insignificant contribution to rice production
in Thailand even in the recent years.

While the yield has improved recently because of
the improvement in irrigation as well as the good weather
conditions, the paddy yield in Thailand is relatively low
when compared to those in other countries in Asia except
the Philippines. For instance, in 1965 the yield per rai
was 256 kilograms in Thailand while Burma, Malaysia, Taiwan

and Korea acquired respectively 266, 433, 604 and 616 kilo-

grams on rai basis.13

 

lllbid, pp. 73-77.

12Jere R. Behman, "Significance of Introcountry
Variations for Asian Agricultural Prospects: Central and
Northeastern Thailand," Asian Survey, VIII (May, 1968),
pp. 157-173.

l3Thailand, Division of Agricultural Economics,
Agricultural Statistics of Thailand, 1966, (Bangkok: 1968),
p. 49.

 

20

This evidence shows that under the present system
of farming, the importance of maintaining and improving
soil fertility should receive more attention; and the
'efforts to introduce the use of modern techniques of cul-

tivation should be continuously encouraged.

Domestic Rice Trade and Market

Rice Marketing Channel

 

Usually, the gestation period of rice from trans-
plantation to harvest is between 90 to 200 days depending
upon the variety.14 Most farmers in Thailand start cultiva-
ting their land during the period of May to July. And they
harvest the bulk of rice crop around November to January
for every crop year. Thus, the big supply of new-season
paddy comes to market during December to March or April.

As a result, the paddy prices during this time of the year
are relatively low compared to other periods. Practically,
there are four basic economic units in Thailand to be con-
cerned with rice market activities, namely, the paddy

farmers; the rice mills;15 the middleman; and the consumer

(domestic and foreign). Paddy Farmers sell their paddy to

 

14Phairach Krisanamis, Paddy Price Movements and
Their Effect on the Economig Situatign of Farmers_in the
Central Plain of Thailand, Doctoral Dissertation, Indiana
University, 1967, p. 13.

 

 

 

Particularly, to some extent, a rice miller may
perform his function as domestic wholesaler, retailer and
rice exporter.

21

the rice mills and the rice millers sell their rice to the
consumers through the wholesalers, retailers, exporters and
even the government. In many occasions, the farmers may
sell their paddy to the middlemen before paddy has been
bought by the millers. Diagramatically, the basic structure
of the rice marketing channel in Thailand can be illustrated

as follows.16

Paddy FarmerSL_____;4 Rice Mills Consumers

e e
I L Ri‘ce Wholesaler ,
Retailer, Exporters

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Paddy Middlemen

 

 

 

 

 

 

 

 

 

 

 

 

Government

 

 

According to a survey conducted by Dr. Udhis Narksawasdi

in 1958, it appeared that over 70 percent of paddy sold to
market in the Central Thailand was handled by the middle-
men at either local or regional levels. About 20 percent
had been sold to the local and regional rice mills. The
remaining 10 percent was disposed of to the landlords, the
Marketing Cooperative units and the farmer's neighborhood.17

It is, obvious that the middlemen played an important role

 

l6Sura Sanittanont,Thailand's Rice Export Tax: Its
Effects on the Rice Economy. Doctoral Dissertation, Univer-
siEy of Wisconsin, 1967) p. 54.

 

l7Udhis Narksawasdi, Farmers Indebtness and Paddy
Marketing in Central Thailand'Iin ThaiT, Bangkok: The
government of’Thailand, 1964, p. 5.

 

 

22

in rice marketing in Thailand in the past and probably

even today.

Farmers and Paddy Supply

 

Paddy is a semi-subsistence crop in Thailand. Part
of paddy produced is used for home consumption. Only that
in excess of what is needed for consumption. - the market-
able surplus, is disposed of into the market. Most farmers
sell their surplus within a relative short period of time
after harvest. This is because of the following economic

and practical reasons:18

(1) Most of them are poor --
about 68 percent of farm families were indebted in 1958;19
it is necessary for them to sell their paddy for money for
their urgent needs and payment of their land rents and
debts; (2) farmers usually lack the storage facilities to
hold their paddy for the higher prices. These are reasons
why most farmers in this country receive very relatively

low prices from paddy they produce and thereby low income

earnings.

The Middlemen

 

Whenever the paddy has moved out of the farm, many

levels of middlemen are involved. Local middlemen, located

 

18Sura Sanittanont, Op. cit., p. 57.

19Pantum Thisyamondol and Millard F. Long, Agricul-
tural Credit in Thailand, Kasetsart University, 1965, p.
20.

 

23

in the farm areas or in adjacent towns, often play an
important role in paddy market. Since they have many
advantages20 over regional middlemen usually located far
away in towns or in central markets, most of their business
involves assembling paddy in local areas and selling part
or all of amounts purchased to the rice mills or other
buyers.

It is, thus, found that most of marketable paddy
surplus flow into the hands of the local middlemen. The
regional middlemen also perform similar business in paddy
trading. This type of paddy trader purchases paddy from
either lOcal middlemen or directly from the farmers. Most
of them own their transport facilities such as trucks and
boats. Many provide storage and credit facilities to the
farmers. Sometimes, they act as a speculator storing

paddy for the purpose of price speculation.

Rice Mill Industry

 

A rice miller is a buyer of input paddy, an agent
of transformation and a seller of rice products.21 There
has been a great increase in number of this kind of industry
since after World War II. A number of mills with different

sizes has been operating both in regional areas and in the

 

20More detail will be discussed on the following
section.

21Sura Sanittanont, Op. cit., p. 59.

24

locations where paddy is produced. The local millers, be-
cause they locate close to the farmers, are in a better
position in terms of the amount of paddy required for their
processing capacities, marketing costs, and bargaining

power as well as personal contacts. The purpose of mill-

ing is to separate the kernel from the husk and bran. A
typical mill might separate its output into six categories:22
Head rice (consisting of 100 percent rice, 5 percent rice or
possibly as low as 15 percent rice); half broken grains (A1);
very small broken grains; fine bran; and coarse bran. The
ratios between the paddy milled and rice produced differ
primarily with the varieties but partly as a result of
weather, soils and the type of mill used. Usually, the
weight of rice, excluding bran is about 66 percent of weight
of paddy milled.23 It is estimated that one ton (1,000 kgs)
of paddy milled yields approximately 420 kilograms of head
(whole) rice, 240 kilograms broken rice and 96 kilograms of
bran (including fine and coarse bran).24‘

There are different size of mills in term of mill-

ing. The big commercial mills that separate rice products

 

22Dan Usher, "The Thai Rice Trade," Thailand: Social
and Economic Studies in Development, ed. T. H. Silcock,
Durham: Duke University Press, p. 211, 1967.

23Thailand, Division of Agricultural Economics, A
Study on Rice Production and Consumption in Thailand,
(BangkOk: 1967): P. 45.

24Dan Usher, Op. cit., p. 212.

25

into five or six grades can mill from 15 to 100 tons of
paddy per day. Others are small -- 3 or 4 ton capacity.
These mills produce an inferior product but they have an
advantage when no big mills are nearby or when the amount

of paddy is less than big mills can conveniently handle.25

Storage

Practically, the majority of the Thai farmers does
not hold stock of paddy for higher prices. They need to
satisfy their urgent needs for cash and have to repay
their debts soon after harvest season. Though some people
store paddy, it is difficult to say what proportion of
farmers save paddy after harvest. These kind of data are
not available. In contrast, it is true that most rice
millers hold large stocks of paddy and rice. The amounts
of stock held varies from mill to mill and month to month.
Again, data concerning the amounts held by millers are
not currently available for each period of the year. It
is quite difficult to obtain the data since most millers
are reluctant to reveal the exact amounts of rice and paddy
they hold for the purposes of their competition in the in-
dustry and to avoid a greater business income tax charge on
their income earned. Holding stocks of paddy and rice, to

some extent, usually affects the market prices; and it is

 

251bid, 212.

26

assumed that the miller will not keep stocking them at all
if his profits can not cover the storage costs. This fact
is supported by an estimate that a miller can earn 10-13

percent net return over the storage costs.26

In an attempt
to roughly figure out the amounts of paddy held in a partic-
ular crop year, however, an alternative way to look at it

is to estimate from the capacities of the existing storage
bins which are located in various different regional areas.
Most bins belong to the rice millers and paddy merchants.
Available data indicate that in 1956 there were 30,015
storage bins throughout the country with a total

storage capacity of about 1.5 million tons.27

Rice Grading

 

Grading of rice is usually done at the mills. For
the purpose of export, rice grading seems to be different
from that of the domestic market. Grading in the domestic
market is a subtler process. There is no need to enforce
classification because consumers can judge the value of
rice for themselves before buying it. The reason is that
it is generally customary for Thai people to associate rice

with the location where it is grown.28 Nevertheless, in

 

26Ibid, p. 215.

27Government of Thailand, Ministry of Agriculture,
Number of Rice Mills and Rice Storage Bins in Thailand,

I956, (Bangkok: 1957), p. 36.

28Dan Usher, op. cit., p. 209.

27

many places rice is graded in the same manner as for the
export market. In others, locality as well percentage
broken is recognized directly as the distinguishing feature
of quality.

In contrast, grading in the export market is rather
uniform and is officially enforced. In 1957, a rice stand-
ard regulation was promulgated in an attempt to ensure a
standard and unique quality of Thai rice. Under the reg-
ulation, inspection is necessary and compulsory for rice
export. Before shipment, grading has to be carried out at
either the mills or the riverside warehouses by the semi-
official Rice Inspection Committee. In grading for rice
export, the percentage broken is treated as the primary
characteristic of rice. For instance, rice which is
classified as 100 percent must be characterized by 100
percent unbroken white long-grained rice only. Completely
unbroken but yellowish or short-grained are a different
grade. The grades for exports from best to worst are as
follows: 100 percent (first class, second class, or third
class); 5 percent super, 5 percent; 10 percent; 15 percent;
25 percent super; 25 percent; 35 percent; 45 percent; A1
(four classes); C1 (three classes); and C3.29 The strict-
ness in grading and inspection has made the quality of Thai

rice unique and well known in the international market.

 

29Ibid, p. 209.

28

Qirection‘of'Interregional

Flow of Rice

 

 

 

The origin of suppliers of milled rice are rice
millers, and the ultimate buyers are domestic and foreign
consumers. Rice use as an industrial input is relatively
insignificant in Thailand. Rice trade is usually handled
by the wholesalers, retailers and rice exporters. In many
cases rice millers also perform an additional function as
the wholesalers and exporters. These rice traders are
mostly Chinese people by race; a typical Thai trader is
rarely found. The direction of interregional trade within
the country is generally south, from the rice surplus areas
of the North, Northeast and Central Plain to Bangkok or
metropolitan area for the local consumption and export to
the rice deficit areas of the southern peninsula (Figure
2.4). There are exceptions to this general movement. For
instances, low grade rice and bran for animal feed some-
times move into the North and the Northeast from the Central
Plain. Also, the North occasionally imports white rice at

the same time as it exports glutineous rice.30

Transportation

 

Paddy and rice can be transported by the same kind
of transport facilities. Generally, they are shipped by

surface from the villages or the farms to the port of

 

3OIbid, p. 208.

(8) (9)
’ R Nor heast

(3) Stgl’a R

TR (L

OD

FIGURE 2.4: DIRECTION OF

 

INTERREGIONAL
FLOW OF RICE IN
9 THAILAND , 1965-
O 660
V
(10) R. = Rice
V
9 South
o
040

Source: Kamphol Adulavidhaya, Interregional Competition
in Agricultural Production in Thailand. Unpub-
lished Doctoral Dissertation, Purdue University,
1970, p. 85.

30

Bangkok and other provincial ports through rivers, rail-
roads, and highways. Rivers are by far the important
mean of rice traffic. Data are not available on the
exact quantity of paddy and rice shipped by these different
means of transportation. But indications are that the
railroads and highways are generally gaining importance
in the areas where the water transport is not accessible.
However, river transportation is generally the cheapest
form, costing as little as approximately 0.1 baht per ton
kilometer.31 The disadvantage of river transport is
obviously that it is too slow and requires additional
shipment if the final destination is far away from the
banks of the accessible rivers.

Truck transport has been introduced as alternative
means in rice trade, since new and better roads are contin-
uously constructed. But the cost is relatively high
approximately 0.16 baht per ton kilometer for the longest
haul (750 kilometers and up) as indicated by Dan Usher.32
The high rates are partly due to the road condition and the
limited truck services. Aside from these, the ox-cart is
likely the most expensive form. This kind of transportation
is usually used to carry paddy from the field to the farm
houses or from the farms to the mills nearby. It is compet-

itive with the truck only over very short distances.

 

3lIbid, p. 217.
321bid, p. 217.

31

Recently, transport by rail was introduced with the
cheaper rate than by truck. But competition has reduced
truck fares to a point where truck and rail can compete
equally on price, although truck still gains advantage in
terms of speed of delivery. River transport is generally
chosen over truck or rail when all three are available and
when distance is long enough to make the difference in

transport costs significant.33

Domestic Demand for Rice

 

Before getting into the generalization of domestic
demand for rice for the whole country, it is desirable to
consider the consumption pattern of the Thai people with
respect to their per capita consumption of food. In basic
form the Thai meal is similar in all parts of the country
and for all classes, except for those urban Thai who are
acquainted with certain Western food habits.34 In the
Central and the South, nonglutinous rice is the staple
item. In contrast, in the North and Northeast glutinous
rice is generally preferable. For every daily meal, rice
is indispensable base; fish, vegetable, and meat are embel-

lishments used for flavoring rice and make it more palatable.

 

33Ibid, p. 217.

34Thailand, Division of Agricultural Economics. A
Study of Rice Production and Consumption in Thailand,
(Bangkok: 1967), p. 26.

 

32

Nevertheless, in Bangkok and some other urban areas, the
tendency to consume more vegetables and meat products is
visible. But, rice still retains its importance. Two
surveys on the nutrition intake indicated that by average,
rice alone constitutes 70—90 percent of total calories
intake per capita per day.35
With given per capita consumption of rice one can
estimate the total demand for rice of the economy. Unfor-
tunately, in Thailand, reliable data -- time series and
cross section data regarding domestic consumption and
other usages of rice are not available. The best way
to estimate total consumptions is to simply estimate the
total rice disappearance within the country no matter for
what purpose it is used. Since rice is a staple food of
the people in this country, a large part of total rice
disappearance in the country will represent the quantity
of rice consumed. With this procedure, the total amounts
of rice disappearance within the whole kingdom and thereby
the total domestic consumption of rice is equal to the
difference between the total production of rice and the

amounts of rice exported for a particular crop year.

 

35A study made by Interdepartment Committee on
Nutrition for National Defense, Nutrition Survey, (Bangkok:
1960). Another survey was conducted by M. M. Anderson,
FAO Nutrition Advisor to Thailand, Summarprlassification
of Food Consumed by Households in 10 Villagest of Ubol
Province, Northeastern Thailand, Unpublished Field
Progress Report, 1962.

 

 

33

Inversely, if the amounts for export is to be set for years
to come, information on domestic rice consumption as well
as rice production will help satisfy this purpose. The
calculation can be made on either paddy or milled rice
basis. Given the total rice disappearance in the country
then the per capita rice consumption, in other words, the
roughly estimated per capita demand for rice is derived by
dividing the total rice disappearance in the country (rice
availability for domestic consumption and other uses) by
the total population of that year.36 By this approach, it
is estimated that average annual demand for rice per capita
was 159.0 kilograms (milled rice).37 Also, other recent
studies have come to similar conclusion with slightly dif—
ferent figures.38 This knowledge on total demand for rice
is necessary and helpful for estimating the amounts of

rice export for the new crop year. It means that the
domestic demand for rice can be projected for many years
ahead so long as the projections of population and rice
production are made. Then, the quantity of rice export

for the years to come can be forecast.

 

36This idea follows the approach handled by Edward
Van Roy on his article titled "The Multhusian Squeeze,"
Asian Survey, VII (Nov. 1967).

 

37Ibid, p. 469—473.

38Figure estimated by the Ministry of Agriculture,
Bangkok was 143 kgs. per capita during 1954-1964. But the
results of the Household Expenditure Survey was 167-168
kgs. per capita in 1962.

34

According to Roy's projection, it appeared that
given per capita rice consumption of 159 kilograms per
year and population growth of 3.3 percent per annum, the
domestic demand for rice will overtake the supply by 1977
given an annual rice production of 9.6 million tons paddy.39
His estimate and projection of domestic rice consumption
requirements during 1947-1980 is presented in Figure 2.5.
Incidentally, if Roy's projection is correct, it means
that the pressure of increasing population will be critical
and the result will be increasing domestic price with the
passage of time. Unfortunately, the study by Roy failed
to recognize the increase in per capita income in this
country. It is observed that since 1950 per capita income
has increased gradually from 1,199 baht in 1950 up to
2,499 baht in 1966.40 And according to the Engel's Law,
we recognize that as one's income increases it is assumed
that the percentage of his expenditure on his consumption
of food such as rice in this case has declined. Specif-
ically, with increase in income people will decrease in
percentage spending on their rice consumption and increase
spending on other more expensive products, as their income

permits, such as meat, fruits or dairy products. This

 

39Edward Van Roy, op. cit., p. 480.

40Thailand, Division of Agricultural Economics,
Agricultural Statistics of Thailand 1966, (Bangkok:
1968), p. 178.

35

 

 

 

 

          

.mnsumms .mm .Asmma
.Hmnfim>ozv HH> .M0>Hsm smamm =.mumwswm cmflmsnuasz one: .mom cm> pambm “mousom
. mam»
om mu on an mm ou mm mm . vm mm om r mm r‘mm wm mm omma
. m . . . a L. . .‘1 . .1m 4 4 4 . . d A . . d A . _ J, . _ fi I
IIIIV O
. .H
msHmusm mOflm manmunomxm_ll

n N

..m

LIV

ucmfimnflsvmm

GOHHQESmcoo moam oaummfion .II m

1 m

\ J.N.

cowuonvoum mowm
J.m
- m

 

 

 

AonH pmaafiav mcou dosaaflz

omaH I ommH .DZflAHflEB .mDQmmDm mam¢fim0mxm 924
ZOHBQSDwZOU .ZOHEUDQOMQ MUHM m0 ZOHBUHDOMQ Q24 mEdZHBmm

m.N mMDUHm

36

conclusion is also supported by an empirical evidence --
a study handled by the Division of Agricultural Economics
in Bangkok which indicated that the co-efficients of both
price and income elasticity of demand for rice are negative.
It means that the people consumes less rice when the rice

prices and their income increase and vice versa.41

Thai Rice Exports

Significance of Rice Export Trade

Rice exports earn a large amount of foreign exchange.
In the early 1950's, over 50 percent of the total value of
exports was derived from rice exports.42 In recent years,
however, its relative importance has declined since there
has been a growing importance of other export crops like
corn, sorghum and casava. Despite the decline in its
importance rice exports itself still is the largest total
export value each year; and in 1965 it accounted about 33
percent of total foreign exchange earned.43

The quantity of rice available for export to a

large extent is dependent upon variables such as the

 

41Thailand, Division of Agricultural Economics, A
Study of Rice Production and Consumption in Thailand,
(Bangkok: 1967), p. 31.

425. y. Lee, "Post War Rice Trade of Thailand,"

Far Eastern Economic Review, XVI (January - June), 1954,
p. 653.

 

43Sopin Tongpan, op. cit., pp 14.

37

production of the year concerned, the domestic requirements
and the amount of carryover stocks as well as the foreign
market prices. Since rice export is a major earner of
foreign exchange, the balance of trade of the economy of
Thailand varies directly with the rice export value. Begin-
ning from 1952 up to the present, Thailand has had an unfavor-
able balance of trade each year. The ratio of exports to
imports dropped from 84 to 57 during the period of 1952-
1966. At the same time the ratio of rice export to total
import declined from 50 percent in 1952 to 16 percent in
1966.44 The fact indicates that for every 100 baht45 of
commodities imported only 16 baht were compensated for by
rice export in 1966.

Most Thai rice is exported to neighboring countries
in Asia including Malaysia, Hong Kong, Indonesia, Japan
and the Philippines. Also, many countries in Africa,
Europe, America and Oceania are Thai rice importers. Essen-
tially, Thailand is a major rice exporting country even
though Burma and the United States on some occasions were
the leading exporters in the world market. Developments
in recent years in the rice export of Thailand are linked

to a high degree with the Thai Government's trade policy

 

44Thailand, Division of Agricultural Economics,
Agricultural Statistics of Thailand, 1966, (Bangkok:
I968): PP. 126-127}

 

45Exchange rate: U.S. $1 is equal to Baht 20.83.

38

and the formation in 1960 of the Rice Syndicate. The issue
of rice trade policy has based upon two basic reasons:46
(1) the government wishes to reserve sufficient rice for
home consumption so that the price of rice will not go up
and lead to a higher cost of living; in other words rice
should be neither over nor under exported but the annual
surplus must be exported in an orderly manner and at as
high price as possible; (2) the government at the same
time encourages rice export for the purpose of increasing
its revenue, since rice premium, a sort of export duty
constitutes a large item of public earnings. Also, there
had been a tendency for the Government to participate more
and more directly in the export trade. About 27 to 45
percent of total rice export during 1960-67 was contracted
by the Government although the percentage has declined in
1968-69.47 From an economic point of view, this kind of
Government's intervention probably creates many disadvan-
tages. The discussion on this matter will be deferred.

Trade Pattern and Demand for
Rice Exports

 

 

From experience, it is observed that the volume of
rice exports has increased rapidly since its major contri-

bution to the foreign exchange has been realized. Available

 

465. Y. Lee, "Selling Thai Rice," Far Eastern
Economic Review, XLV (July 1964) pp. 20-21.

 

 

47For detail see Table 2.2.

39

information indicates that during the mid-nineteenth century
(1857-59) Thai rice exports accounted for only 59 thousand
tons. In the early twentieth century up to the World War

II period, annual rice exports increased to the average of
1.5 million tons per year.48 After the war, rice export
trade has slightly changed from the average of 1.3 million
tons during 1951-59 period to the average of 1.5 million
tons per annum. There has been variations ranging from

a low of 1.2 million tons in 1954 to a high of 1.9 million
tons in 1964 and 1965 and an average of 1.5 million tons

in 1966 and 1967 (Table 2.2). Over a long period of time,
therefore, Thailand's share of the world exports is said

to be unchanged ~- approximately 23 percent since 1955

while the other major rice export countries except the
United States show a decline in their export shares. In
countries like Cambodia and Burma with internal crisis

rice production as well as rice export has tended to decline.49
For the United States, rice has been one of the most rapidly
rising agricultural exports. In 1967, this country became
the world's largest rice exporter, topping the nearest
’competitor, Thailand, by 20 percent. During 1968 the U.S.
rice exports reached an estimated 7.8 millions, roughly 27

percent of the total world rice exports. And it is indicated

 

48Sopin Tongpan, op. cit., pp. 12-13.

49Ibid, pp. 27-28.

4O

.manmawm>m sump on «

.HN .m .mmma .umnsmowo .xoxmcmm .Aflmna any pamaflmna

«0 monumflumum ucmuuomsH mo :oflumaflmsoo .moflumnumum Hmcoflumz mo monumo Any

.ANH .m .mmms .xoxmcmm .mpma «wamflnmne mo

moflpmfiumum Hmnsuasofimmm .moflEocoom annoyanownm< mo cowmfl>fla .ocmHHmnB Amy

.xoxmcmm .muflmmmm oafiocoom mo muumwcflz

.mmmaumoma «ma .m .mmma .musmpm>mco mumpm capo .cofipmuummmfla Hmuopooo
Umsmflansmcb .moflm wuss mo.moflum may no mammamcd anocoom cfi .cmmmcoa camom ”mouoom

 

 

 

 

 

 

 

mm * mmm mmm owe mmma
mm Anvv.vmm.m «No.H omm mom wwma
mv AnVH.mmm.v mvv.a Hmo Nah wmma
me H.Hoo.v Hmv.a mom mob mwma
mm v.vmm.w Hmm.a oon HmH.H mmma
mv m.mmm.¢ mmm.a was mmo.a voma
me o.v~v.m mum.a sum mom mmmH
mm o.ovm.m h>~.H Nae mew mmma
«m m.mmm.m mom.a mvm mao.H Hmma
hm m.mmm.m mmH.H mmm new omma
NH o.Hvo.m cmN.H wma voa.a mmnvmma
4 >.>mv.m omv.a * « Amvmmlomma
Appmp
cofiHHHEV
Amy moaw> muflucmsq lllll Amcou ooo.av lllll
manomxm moam
Hmuoa mo muuomxm mofim Hmuoe manomxm muuomxm “mow
ommucmoumm usmficum>ow oum>flum
mm manomxm
ucmscum>oo

 

 

momanamma .pamaflmns .muuomxm m.u:ms:um>oo
pom muuomxm mum>flnm "muuomxm moam

N.N mqmflfi

41

that the United States is expected to maintain her present
status of the leading world rice exporter with exports of
approximately 2 million tons within the next five years.50
It is believed that most rice exporting countries will
face problems of over supply because most rice importing
countries plan to reduce purchases by becoming more near-
ly self-sufficient in rice production. Therefore, within
the next five years, it is expected that world rice situa-
tion will have adjusted from the pattern of relatively

high prices and scarce supplies exhibited during the past
decade to one of generally adequate exportable supplies and
significantly lower prices.51 This depressed producer
prices is expected to dampen the increase in rice produc-
tion in Thailand, a major exporting country. As a conse-

quence, there will be problems of rice export trade as well

as domestic rice policy for the economy of Thailand.

 

50Quentin M. West, "Trends and Development in Foreign
Trade," Paper presented at the International Marketing Work-
shop, New Orleans, Louisiana, (May 1969), pp. 10-11.

SlIbid, p. 11.

CHAPTER III

TIME-SERIES ANALYSIS OF RICE PRICES

In this chapter, an attempt has been made to
investigate and describe the long-time price behavior and
seasonal price patterns of Thai rice in both domestic and
export markets. A description of price relationships
within and between different market levels -- the domestic,

export, and the world market, will be also presented.

Long-Time Price Movements

Since trading in rice or paddy in Thailand is
almost completely free of the government regulation, the
price levels of rice and paddy are determined by the
supply of and demand for rice. Otherwise, the determina-
tion of rice prices must involve other factors outside the
rice economy especially the fixed price regulation which
is exercised by some institutions; such a phenomena repre-
sents the situation in some other countries like Burma and
United Arab Republic in which fixed producer prices are
regulated by the government. In the case of Thailand,
farmers are suppliers of paddy and their supplies obviously

change from year to year depending, to the large extent,

42

43

upon weather conditions. Similarly, on demand side, it is
believed that the demand for rice in Thailand is increas-
ing because of a rapid population growth. An increasing
but steady demand associated with annual variation in rice
supply produces, to some degree, variability in price of
rice and paddy.

Trends in Domestic Prices and
Production of Paddy

 

Considering of paddy price over a long period of
time, there is a lack of data onfarm price level since
prices received by the farmers in Thailand have not yet
been officially compiled. The best alternative, there-
fore, is the wholesale prices of paddy delivered along-
side mills in Bangkok and Thonburi. Using prices at
wholesale level, to some extent, may represent the prices
received by the farmers. Actually, the average wholesale
price of paddy represents the price paid by the rice
millers in the cities, particularly, in Bangkok. This
price, therefore, is the price received by the local and/or
regional middlemen and probably by the farmers less the
marketingcosts. The farm price is assumed to vary with
the wholesale price level and to differ by transportation
costs and some profit margins. At present, these market

margins tend to decrease since there has been a rather high

44

degree of competition among rice mills as well as a
considerable improvement in transport facilities.1

"_2 Bangkok is important as the central market for the
whole country both for domestic and export trade. For the
purpose of this study in an attempt to trace out the his-
torical variation in paddy prices, Bangkok price is, there-
fore, used to reflect the prices of various levels of
domestic trade. Specifically, in this study we assume
that prices at farm and retail levels vary in the same
direction as price in Bangkok -- i.e., the wholesale price.

From Figure 3.1, it may be seen that, over the

last 18 years, the average paddy price exhibited year to
year variation but with a slight and steady upward trend.
At the same time, the trend in rice production also showed
an upward movement. Incidentally, year to year change in
both price and production during some specific periods
appeared related to each other. Particularly, duringthe
period 1956-1958 while production severely declinedand
price jumped up sharply, and in 1959-1960 price moved
slightly downward while production increased. Nevertheless,
changes in price during the period 1954-56, 1960-62 and

1965-66 appeared not related to annual production since

 

1Chaiyong Chuchart and Sopin Tongpan, The Deter-
mination and Analysis of Policies'to'Support'and'StabiIize
'Agricultural'PriceS'and‘IncomeS'of‘the'ghai'Farmers.
Kasetsart University, Bangkok, pp. 46-47.

 

45

 

.mm .d .hmma .Hm .Ho> .xoonummwchHuospoum .omm .moanm

 

 

 

 

 

 

ow .m .mmma .xoxmcmm .owma .pcmHHmnB mo mowumflumum Hmuopasownmd .GOHposooum "mousom
no mm mm mm me am on mm mm mm mm mm wm mm mm Hm omma
¢ d L T . m A j . w J _ . _ a n V
m . 1 m
>
W i \ / \\p/ J m
x / /
\ / \ /
I \ / \ / \\/ \
m. r \\ (IL I \ / \ // \\1 m.
cowuosooum mofim |J\ / x /\ /(\\
\x / \\
m t \\ / \ 5 m
\\ \
\ (
\
a , \ moflpm mppmm nu -
1 \7 / . m
/ \\
v \ \
/ \
as r // \
/ \ 1 Ha
/ \
- ,\
NH - NH
ma 1 ma
mcoe coflaawz cou\u£mm ooa

bouomma .ozquams .onaosoomm mon
Aaozza ozg wooam H .02 moamo mo monm mqsmmqomz 449224

H.m mmame

46

price and production moved into the same direction. It is
also observed that during the periods of good production
such as the period of 1952-53 and 1963-64, the price
showed a sudden decline. Generally, during the 18 year
period, year to year fluctuation in price of paddy seems
partially explained by annual rice production; but largely
subject to other factors.

Prices in Other Major Rice
Exporting Countries

 

The purpose of studying prices in other exporting
countries is to observe how the variation in their prices
relates to the price in Thailand. The average world price
of rice should be partly explained by export price from
every exporting country. Therefore, price in each indi-
vidual rice exporting country is assumed to be related to
the single world price. As a consequence, prices of paddy
or rice in individual producing countries by definition
must exhibit the same direction as well. Specifically,
price fluctuation in one country is assumed to reSpond more
or less to that of other countries. Figure 3.2 presents
the annual paddy price indices in some major rice pro-
ducing countries -- Thailand, Japan, the United States,
Republic of Vietnam and United Arab Republic. It is
noticed that these price fluctuations over the entire
period of 1950-67, follow a rather similar pattern but

differ in degree of variation.

47

FIGURE 3.2

PADDY PRICE INDICES IN THAILAND, THE UNITED STATES, JAPAN,
REPUBLIC OF VIET-NAM, AND UNITED ARAB REPUBLIC, 1950 - 67.

 

    

 

INDEX
1957-59 = 100
200 '
0”
..:"
(2 )3:
150 6 3
100 - . ‘”".I""‘
I. 0 O f “ I \o './
‘\_3.; x,/ ; \F'j \\u_n_/45)
J. O ’
,7 \ pa / (1) Thailand
L": 7! V \ / (2) Japan
: *i (3) The United States
,’* V (4) Republic of Viet-Nam
50 " (5) United Arab Republic
0 l I l l l l I l

 

 

1950 52 54 56 58 60 62 64 66 67
YEAR

Source: Appendix Table A.4

48

However, Burma is an exception since minimum fixed-
prices set by the government remain the same over time.
(Appendix Table A.4). In other words, the minimum price
index of paddy in Burma is constant at 100 percentage
point and is excluded from Figure 3.2. In this connection,
Burma's paddy price may not be related to prices in other
countries unless the fixed-price regulation is eliminated.
The same situation also existed in the United Arab Republic,
particularly during the period of 1953-54 to 1961-62, price
fluctuations in this country were manipulated in the op-
posite direction to prices in major free trade countries
(Figure 3.2). But, fixed-price regulation in the case of
United Arab Republic was flexible during some periods.

Trends in Thai Export Prices
and the World Rice Prices

 

 

Since prices in individual rice producing countries,
to some degree, are related to the world price, it is no
surprise that export prices also depend heavily on the
world price. Among the principal rice exporting countries
like Burma and Thailand rice production and export are
generally undertaken on a relatively large scale and under

2 Fluctuation in the

a rather high degree of competition.
world price obviously affect variation in both domestic

and export prices of rice producing countries. However,

 

21bid, p. 24.

49

in the case of Thailand, the world price effect on domestic
prices seems not to be severe since domestic prices are
protected, to some degree, by the rice export tax (rice
premium) regulation. This mechanism is used directly as

a price barrier between domestic and export prices in an
attempt to keep domestic prices low'but responsive to the
prices in the world market.3 Comparison of indices of ex-
port prices among Thailand, Burma and the world market is
presented in Figure 3.3. It may be seen that world export
price index showed considerable fluctuation from year to
year during the period of 1957-61. After 1961, the index
was stable until 1964 then gradually increased to the
extreme in 1967. Export price indices of Thailand and
Burma were manipulated in the same direction, apart from
the fact that the degree of variation of Thai export prices
appear greater than that of Burma. However, both indices
tend to keep their fluctuations closely around the world
price index. Export price series from any individual ex-
porting country, therefore, is likely an export price

indicator of each other.

Seasonal Price Patterns
An important characteristic of agricultural prices

is their tendency to exhibit regular seasonal fluctuation;

 

3Discussion in detail will be presented in Chapter V.

50

m.< mHQMB xflpcmmmfl "monsom

 

 

 

 

 

 

 

 

 

mam»
up mm mm as mm mm as om mm mm mm mm mmm
mosum page: Ame
asusm AND
pcmaflmna AHV 1
J
cos n amusmma
xmozH

HEB QZ¢

.hmlmmma

.mzmom

~NMQZH mUHmm Emomxm QHMOS m0¢mm>¢

.QZfiAHGmB ZH mUHmm Bmomxm A¢322¢ m0 mmoHQZH «mUHm

m.m mmDOHm

OI-l

ooa

ONH

ova

omH

51

and knowledge of these seasonal price movements is essen-
tial in making production and marketing decisions.4 Most
crops are harvested only once a year with the time depend-
ing upon the availability of inputs used and weather
conditions. Factors that cause seasonality in most agricul-
tural prices are nothing but the impossibility or high cost
of production during certain seasons of the year.5 Within
a year, demand for most agricultural products tends to
remain fairly stable but supplies fluctuate due to the dif—
ferences in production and storage costs between seasons.
As a result, prices and production levels tend to move in
opposite directions. In other words, in seasons of smaller
supplies price tends to be high and vice versa.6 This
seasonal factor associated with the varying locations of
rice production spread the season of harvest over a period
of 5 to 6 months, from October to March of crOp year. How—
ever, because of the problems of financial position, small
scale production, and the lack of storage facilities many
farmers dispose of most of their rice supply immediately
after harvest. As a result, the peak market period is

reached and followed by a severe decline in price during

 

4Richard G. Heifner and Robert P. Ferguson, Season-
alit in MichiganAgricultural Prices, 1958-1967. Agricul-
turaI Economics Report No. 18, MSU, Dec. 1968. p. 2.

5Ibid, p. 1.

61bid, p. 5.

52

the post-harvest period of the year; and after that the
supply begins to decline from month to month and becomes
succeedingly low during the period of November to early
January. Because of the seasonal variation in market
supply of rice, the seasonality in price of rice is, there-
fore, presented accordingly. These seasonal patterns in
both price and quantity of rice, however, will be discussed
in detail in the appropriate succeeding sections.'

Seasonal Domestic Price
Calculations

 

 

In order to measure seasonality in prices, seasonal
price indexes are calculated using the ratio-to-moving average
technique.7 Calculations are performed using a special
computer program.8 The data for the analyses consisted of
monthly price series of paddy and white rice 5% broken as
well as quantity supplied both in domestic central market
and export market. Data were assembled from various pub-
lications available from Thai Government agencies and the

Food and Agriculture Organization of the United Nations.

 

7For detail, see Foote, Richard and Karl A. Fox,
Seasonal Variation: Methods of Measurement and Test of
Significance, U.S.D.A. Agricultural Handbook No. 48,
September, 1952.

 

 

 

8For detail, see Heifner, Richard and Jacqueline
Mussell, Program Description SEASON, Dept. of Agricultural
Economics, Michigan State University, Agr. Econ. 954,
Revision, August, 1966.

 

53

The measurements are based on data from the period 1950
through 1966 except for some series of exports which in-
cluded only the 1956-66 period. Most of the domestic price
series are estimates of average wholesale prices assembled
by the Department of Internal Trade, Bangkok. The export
prices are monthly averages of market quotations.

In interpreting the results, it is suggested that
the seasonal indexes for each set of data consist of two
indicators of variations in seasonal patterns. The first
indicator is a figure which contains three irregular but
roughly parallel lines running from left to right. The
central line represents the average index of seasonality
as calculated from data collected. The upper and lower
lines bound an area of uncertainly about the index. Tech-
nically, the upper and lower bounds are one standard devia-
tion above and one standard below the mean respectively.9
The second indicator is the trends in the trend values for
the index for individual months which are reported in the
last line in the appropriate Table in Appendix B. The
trends in index values represent the changes in the season-
al pattern over time. Their values show the annual changes
in the index for various months. A positive trend value
for a particular month indicates the over time the seasonal

index for that month increases. Conversely, the seasonal

 

9Richard G. Heifner and Robert P. Furguson, op.cit.,
p. 2.

54

index is decreasing if the trend value for that particular
month appear to be negative. However, if the trend value
is positive during the months when the index is below 100
and negative for the months when index is above 100, it
indicates that seasonality is diminishing. On the other
hand, if the trend is positive for months when index is
above 100 and negative for months when index is below 100,
it is the evidence that seasonal index has been increasing
over time.10

Seasonal Variations in
Paddy SuppIy

 

The seasonal variations in paddy supply are repre—
sented by the seasonal pattern of the paddy market in
Bangkok, the only location where seasonal data are avail-
able. Even though the quantity bought by Bangkok and
Thonburi millers was relatively small compared with total
production, it still shows significant seasonality (Figure
3.4). The figure shows that the quantity of paddy reaching
Bangkok and Thonburi markets attains its peak during the
harvesting period -- January to March and reaches a trough
during the months of September to November. The quantity
supplied during the peak periods have averaged about 61
percent above annual average amounts. In contrast, the

average amounts during the lower supply period was about

 

lOIbid, p. 3.

55

0mm

>02

H.m magma xflpcmmmd ”condom

. 29202
900 mmm 02¢ QDU 20h MKS 22¢ mflz mmh

24b

 

 

 

 

 

Q2¢AH¢SB .mmmnflHE HmDmZOZB Q24 MOMDde Mm
Bmeom waadm m0 NBHBZflDQ 2H NBHQflZOmdmm ho meZH

v.m mmDUHm

xMDZH

o

om

ooa

omH

oom

omm

com

56

62 percent below the annual average. However, the trend
values indicate that the seasonal variation in paddy supply
in Bangkok and Thonburi markets has been increasing over
time (Appendix Table B.l).

Domestic Seasonal Price
Variations

 

 

Figure 3.5 shows that there is very small seasonal
variation in the price of paddy at Bangkok market. The
peak during the period of September to December is about 4
percent above the annual average. The harvest season --
January to March is about 7 percent below the annual average
index. According to the trend values, there is no evidence
that seasonal pattern in paddy prices at wholesale level in
Thailand is changing significantly. (Appendix Table B.2).

In addition to paddy price, the seasonal pattern
in prices of white rice (loo-5%) in Bangkok were also
investigated. Figure 3.6 shows that the prices of rice
exhibit a rather smooth seasonal pattern with a peak in
the month of December and then reaches a trough in January.
However, a gradually increasing seasonal index obviously
exists. The peak of seasonality is about 6 percent above
annual average contrasts with a 9 percent below average
trough. The trend values do not give evidence that there
are significant changes in seasonal pattern in the prices
of white rice (loo-5%) at wholesale rice market level

(Appendix Table B.3).

57

 

m.m manna xfiocmmm< "mousom
28202
Ufln >02 BUO mmm wbm nab 25h Mfifi mmm m¢2 mmm 2¢b

W

cm

ooa

 

 

.mNH

1 omH

 

mud

 

meZH

QZflAHGEB .HmszomB 02¢ MOMUde 2H mQAHZ mDHmIUZOAfl
Ommm>HAmQ AH.02v Manmm mo WUHmm 2H NBHAd20m4Mm m0 NMDZH

m.m mmDOHh

58

m.m manna xflpcmmmfi "wonaom
maze:
0mm >02 Boo mum wad gab zoo Md: mmd mm: mam 24b

w...

[4‘ 1 d 1

cm

ooa

 

\\ \ - o:

1 ONH

 

 

 

NMQZH

D24AH¢29 .MOMfiZflm 2H
AMUHm MBHMS wooav WUHm mo mUHmm 2H NBHAflZOmdmm ho meZH

m.m mmDUHm

59

Seasonality in Quantity
and price'ofiRice'Exports

 

 

Domestic utilization of rice for food, seed, feed
and other industrial uses is relatively stable, rice ex-
ports therefore depend upon annual rice production. Figure
3.7 shows a considerable seasonality of rice export over
the period of 1956-66, -- a seasonality with a seasonal
peak in March at 122 and a seasonal low at 73 in October.
Trend values indicate that the seasonal pattern is chang-
ing significantly (Appendix Table B.4).

Associated with the seasonal pattern in quantity
of rice (all grades) exported is the variation in quantity
of a specific grade of rice export -- white rice 5% broken.
The seasonal pattern for the specific is similar to that
of the overall quantity. However, slightly greater
variations are presented (see Figure 3.8). The variations
in quantity of rice 5% broken exported, therefore, should
be a representative of total Thai rice exports. Also,
there is evidence that the seasonality in 5% grade rice
export has been increasing significantly (Appendix Table
3.5).

Seasonality in export price in this analysis is
represented by the seasonal movements of rice (5% broken)
export price since data on average export price during
the period covered by this study are not available.
Seasonal variations in export price usually reflect season-

ality in quantity of rice exported. Figure 3.9 shows that

60

 

m0 >02 BOO mmm 0fi<

Qfib

¢.m manna xfipcwmmd
28202
6..., E. E. .2...

 

"mousom

mflm 2¢b
M.om
00

or

ow
om

ooa
OHH

1 ONH

\ x/ L oma

1 ova

1 omH

 

 

NHQZH

02¢AH¢28 .mfimomxm AmMQfimw AA<V MUHm mo NBHBZfiDO 2H MBHAdZOmdmm ho XMQZH

h.m HMDUHm

61

 

 

m.m magma xfiosmmmfl "wousom
mazoz
>oz Boo mam mom 49b 29b wfiz mad ms: mmm z¢b

Mmm

d I I I I

/ Iowa

nomH

1omH

 

 

NMQZH

oz¢qH«ma..msmomxm Azmsomm wmv
mon mo waHBZ4Do zH wqumzom«mm mo xmozH

m.m WMDUHh

62

m.m magma xfipcmmmm "monsom
mazes
0mm >02 BOO mum 004 29b 20b NM2 mm< 2&2 mmm 2GB

. M.

lwom

om

OOH

 

(OHH

1ONH

 

 

 

NWQZH

oz¢qums .Amomozmm .m.o.mv .Awnnmv
mon mo monm amomxm zH mqudzOmmmm so xmozH

m.m HMDUHM

63

the seasonal variation in the price of rice (5% broken)
ranges from an average of 96 from the seasonal low during
November to January to the seasonal high of about 104
during August to September. It is observed that season-
al pattern in export price does not exactly correspond to
the seasonality in quantity of rice exported which was
previously mentioned. It means that a seasonal high in
price does not exactly imply a seasonal low in quantity
exported and vice versa. This is because of the fact that
the variation in export prices of individual exporting
country is not absolutely explained by only the quantity
of export of that particular country but it is also ex-
plained by other factors affecting the world market.
Figure 3.10 shows the relationship between export price
and quantity exported of rice (5-7% broken). It illustrates
that the price-quantity export relationship for some pe-
riods such as early 1963, 1964 and 1966 did not follow our
assumption on the law of demand. Also, it is noticed that
the quantity of exports exhibits a high degree of varia-
tion over time but the price is rather stable.

The estimated trends indicate some evidence that
the seasonal movements in price, particularly of rice
(5-7% broken) exports has been changing over time (Appendix

Table B.6).

64

 

 

 

 

 

NH.m .Ham manna xflpammm< “mousom
Mdmw
mm hm mm mm «0 mm mm am on .mm mm mm wmma
. . 4 a. . . . . . . . + - O
omuuomxm mpflucmso IIIII I .. on
0028 unomxw — 2 .. -
-
h . H....... 1.. .... u. , ..
. . . 1
3...... _. 3;: i
1 Z : I"... . . . . . _ .
. _. I . =:. a . Z. _ . .
. u . :5 . . . . —.. . u . .
. . _ . C L n _ .. 1. . . .(4 . n OOH
_ * 1 . , .. .. Z ..
' - . ’ - - 1 z
. -. ‘ .- a. . n 1. 1‘ < .. l
.:. .u : "if". .u
. , . . .
. Z . . . .
a: u... . .1 : z u. :5
. :_
2 ___ . 3 .__ 5. -.
.5 . a. n 4
_" .n 1 2:
_.. .
5 I
.
— 1 CNN
NNQZH
Aooa H mm u hmma .mHmmm wamazozv

.mmlmmma QZfiAHde .mfimomxm Awblmv mUHm 20 MBHBZdDO 02¢ mUHmm 20 mmUHQZH

0H.m mMDOHm

65

Relationships Between Domestic Price,
Export Price, and the World Export Price

Relatignship Between Domestic
Paddy Price and WHite_Rice
Price

 

 

Figure 3.11 shows the relationship between the
wholesale prices of white rice (100%) and the wholesale
price of paddy (no. 1) in Bangkok market. It indicates
that over the period 1950-66 these two price levels exhib-
ited a close relationship and moved in the same direction.
Relationship Between Domestic

Padd Price and Quantity of
Rice Exports

 

 

Figure 3.12 presents the relationship between paddy
price and exports. From the figure, it appears that during
the period from 1952 to 1965 rice export and paddy price
had a negative relationship with each other. The negative
relation held in the case of quantity exported and export
price.

Relationship Between

Domestic Price of Rice
(100-5%) and the World Price

 

 

 

An attempt was made to correlate the domestic
wholesale price of rice particularly the average price of
rice 100% and 5% with the average world price. This rela-
tionship affects the workability of the rice export tax
policy which is designed to protect and isolate variation

in domestic prices from fluctuations in the world price

66

m.m .m.m OHQMB xflpcmmmd “wousom

mdmw
mw mm we mm mm am on mm mm mm mm mm vm mm mm Hm omma
L. A

 

j 5 4 a

. . w . w _ _ _ .

AH.OZV 260mm MO OOHHm In (I

Awmlooav mOflm MO OOHHm

 

.—
-_-—'-.'

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

xmo.
Aooa n mm u Amos .mHmmm wqmszozv

.mmnommd .oz¢qH«ma
.monm AH.szwoomm nzm Awmuooavmon mo monm oHemmzoo mo mmoHozH

HH.m HMDOHm

on
mm

om

om

mm

OOH
moa
OHH
mHH

ONH

mNH

2H

67

22mg.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

mm mm em mm mm Ho om mm «mm hm mm mm «m mm wm Hmma
a . . d 4 1 I 2 _ 4 q 4 . A A
0H.m.m.m magma xwwcwmmfi "condom

) 1
. 7 ,> . > l mu 1 .r
2 ./ ‘3 ~ - Z x: x. L \I/ s. V4¢ _ \. s
. . . . . .
a .. ..1/u>[.k I _‘ _ xx” s1 .u .. (\. 4/ .\ I, . x / \jxirf. \ .. \Ja. \
z _ x .\ ,n x a x . .
at x. v. _\ in x .. ft .u H. g -
x z .
4
moflnm hwomm owummaoauiii!l
muuomxm scam mo huwucmso 1.
meZH

AOOH u mmusmma .mHmmm unmazozv so u Hmma .ozmaH4ms
.mamomxm Ammo¢mo qq¢v mon mo
wsHaz<Do ozm AH.oszoo<m mo monm mo mmoHozH

Na.m amanm

om

cm

on

om

cad

OMH

oma

05H

68

and thereby, from changes in the world demand for and supply
of rice. Figure 3.13 shows that during 1957-66, the domes-
tic wholesale price moved in the same direction as the
world price. Particularly from 1958 to 1962-63 both world
and domestic prices almost moved in the same line, apart
from the fact that domestic price did not fall while there
was a severe decline in the world price during 1959-60.
This may be a contribution of the rice export tax'policy which
attempted to make domestic price less responsive to any
effect from outside world particularly during a price
depressing period.
Relationship Between
Thailand's Average Export
Price and the World Export

Figure 3.14 illustrates the relationship between
the export price index of Thailand and the world market.
The figure shows a considerable year-to-year fluctuation
in both Thai export and the world price. In general, the
world index and the Thai index of export prices during
1956-63 tend to move in the same direction with slightly
greater variations in those of Thai rice export. Since
the data on the average export price from Thailand are not
available for the period after 1963, the determination of
the relationship between prices of these two markets could

not be further presented.

69

4H.m .m.m magma xfiocmmm4 “monsom

 

 

Mdmw
mmma L mmmHLvomHL mmma- mmma - Homa omma mmma mmma nmma
q q A L L L L
me 1 ooa mowmv
moflum
mHMmmHonz oaummsoo Hmaa.l.u1.11
mogum uuomxm page: 1
L) L > \— 1..
LL L/ UL L L LL \. b
L. L L LLL L L a. L L L L L L. a.
LLLL L L L L L LL . LL L L L LL L 1
Li L >LL L L LL LL LL L L _ LL
>LL L L.LL L4 L L L LL LL LLL L LL L L L x I
LLLLL L L L L LLLLLLLL LL (LLLLLLLL LL. -
L L L L L L L Lk I L LLL L LL L
L L L L ; LL L L L
L L wa L L L LL LL L L ”L L L L LL
L L L 1
LL L LL LL L L L
L L 2
LL LL LL LL .1
L
LL LL L LL
L LL

 

 

Looa u mm1>mma .mHm4m wqmszozL omnnmma
.monm 920222 24202 mo4mm>4 229 624 me 1 ooHL
mon mo monm 244mmqomz ouemmzoa H429 mo mmoHozH

ma.m HMDOHh

m5

om

mm

om

mm

ooa

moa

OHH

mad

ONH

NHQZH

70

FIGURE 3.14

INDICES OF THAI AVERAGE EXPORT PRICE
(WITH PREMIUM) AND THE AVERAGE WORLD
EXPORT PRICE, 1957-65 (MONTHLY BASIS, 1957-59 = 100)

 

 

 

INDEX
II
120 P W
I
' I
1 1' ~
1‘ I
'1‘ ' l
I\ (I I
110 - 3" ' '
HI'\ 4 I
A]. ‘ h K
II II \ H I
[‘3 II \A I‘ I
1 II \ II
. 1' ‘ I: I
100 - I l \ I \1
I ‘ I
I ‘ '
I ‘ - '
IN \ A,
I \
\V I hIVV
90 ' {,7
I; I LLLLLLLWorld Export Price
I
If -———.——Thai Export Price
3 (average)
I

80‘
Oil 1 1 1

1957 1953 1959' 1960 1961 1962' 19634 1964‘ 1965
YEAR

Source: Appendix Table B.13, B.14

 

71

In conclusion, the analysis of time-series of prices
and quantities of rice in both domestic and export market
reveals increasing trends in both price and production of
paddy on annual basis. The seasonal variations in domestic
prices of rice and paddy are rather small in terms of degree
of variation and of change over time. But seasonality in
domestic market supply, quantity exported and export prices
has been increasing significantly over time. Domestic
price relationships between the paddy and rice market level
are closely related and move in the same direction. Also,
the Thailand export price and the world price on a monthly
basis tend to move in the same direction with greater

variations in that of Thailand.

CHAPTER IV
DEMAND AND SUPPLY OF RICE

Introduction

Agricultural price analysis centers around the
analysis of demand and supply of farm products and has
been developed since the early 1920's.1 This kind of
analysis involves the statistical measurements of demand
and supply for a particular farm product for purposes of
theoretical application and public policy implication.
Also, the knowledge of demand and supply patterns can be
of value in production planning and orderly marketing of
agricultural commodities. (Statistically, the analysis is
designed to measure price—quantity relationships of a
particular commodity under some specified economic assump-
tions. Since the statistical demand and supply analysis
involves the development of several disciplines -- economic
theory, probability theory, and statistics, an analysis
based on knowledge of these requirements is likely to pro-

vide an accurate and specific result.

 

1Karl A. Fox, Econometric Analysis for Public
Policy (Ames: The Iowa State University Press), 1958,
p 3

72

73

This chapter is an anlysis of the economic and
statistical models for measuring the price-quantity rela-
tionships in the specified demand and supply equations for
rice in Thailand. Also, an attempt has been made to
estimate the elasticities of demand and supply of rice in
the economy. However, before presentation of the models,
the justification of factors relevant to the models, the
sources of data and the data themselves, the period covered
in this study as well as the statistical assumptions in

this analysis will be discussed in the chapter.
The Data

The data used in this analysis are secondary data
selected mainly from Thai government and Food and Agricul-
ture Organization of the United Nations publications.
Particularly, the harvested rice acreage, production, and
personal income in baht per capita utilized in the analysis
were taken from the Agricultural Statistics of Thailand,
1266 prepared and published by the Division of Agricultural
Economics, Ministry of Agriculture in Bangkok. The price
series -- the wholesale price of white rice (100%) and the
wholesale price of paddy (grade No. 1) in Bangkok market
were obtained respectively from the price records of the
Department of Internal Trade, Ministry of Economic Affairs,

Bangkok, and of the United Nations in the FAO, Production

 

Yearbook, 1967-68. The wholesale price of white rice (100%)

74

is expressed in term of baht per metric ton of milled rice
marketed in Bangkok. The wholesale price level is used to
reflect the movement of retail price of rice in Bangkok
since retail data on rice prices which are more relevant

to the consumer demand equation are not available. Similar-
ly, the wholesale price of paddy in Bangkok market is used
to represent the price received by the farmers when supply
equation is being estimated, since no farm price data are
officially compiled in Thailand today. However, the only
relevant point is whether wholesale and retail as well as
farm price move together. The wholesale price of paddy

(No. 1) is also expressed in baht per ton of paddy deliver-
ed along-side mills in Bangkok. Those series on rice
production, wheat imports, harvested rice acreage are
measured on per capita basis -- i.e., kilograms per capita
for rice (on paddy term) and wheat. Rice exports in
million tons and rice export tax in baht per metric ton of
rice exports are also utilized in this analysis and were
taken from the records prepared by the Department of foreign

Trade in Bangkok.
Period Covered in the Analysis

Annual data for the calendar years 1952 through
1966 for most series of data were used in this study. Ex-
ceptions are those series on annual production and harvested

acreage which are measured based on crop year basis. The

75

period of study is limited by the availability of data --
i.e., no data are available on the rice export tax for the
period prior to 1952, but data on rice production and
personal per capita income are not available for the period
after 1966. Therefore, the period covered is restricted
from 1952 to 1966 or seventeen observations. However, the
observation period is long enough to average out the effect
of many nonmeasurable factors which reduce the precision

of the statistical estimates.
The Method

This section includes a discussion of application
of statistical procedures to the economic and commodity
relationships in the Thailand's rice economy. The justifié

cation of both statistical and economic models is presented.

The Statistical Model

The statistical estimation of the hypothesized
model involves two stochastic equations which are solved
using a two - stage least squares estimation procedure for
estimated demand equation and an ordinary least squares
for estimated supply equation. The procedure is under-

lined by the following statistigl assumptions:2

 

2Lester V. Mandersheid, "Assumptions regarding
Disturbances and Properties of Estimators," Class notes,
Agricultural Economics 835, Summer 1969, Michigan State
University, p. l.

76

1. Serial independence: It is assumed that within
the model there is zero correlation between any two distur-
bances, or there is no serial correlation of disturbances,
E(UtUs) = O,for all t # s.

2. Homoscedasticity: The variance of each dis-
turbance term is equal for all observations, or there is
finite and constant variance for all observations.

3. Identification: The number of observations
equals or exceeds the number of parameters to be estimated
and the equations can be separated into a valid demand and
supply equations.

4. The independent variables are measured without
error; and there is no exact linear relationship between
any set of explanatory or predetermined ("independent")
variables.

5. Zero mean: The average disturbance is zero,
E(u) = O.

6. The disturbance term is distributed according
to the normal distribution, UnvN(O,6i). This is not
necessary for estimation but needed for hypothesis testing.

In the system of equations, the equation (1.2) is
specified as the supply equation and represents the first
stage of two-stage least squares analysis of demand. In
the equation, the endogeneous variable is estimated as a
function of the predetermined variables in the system. The

lagged values of variables determined within the system are

77

also considered as "independent." The equation is fitted
using the ordinary least squares method. Then, the es-
timated values of endogeneous variable from the first stage
are included as an independent variable in the demand
equation (equation 1.1) which is solved by ordinary least
squares as the second stage. More specifically, the supply
equation is estimated by applying ordinary least squares
method and represents the first stage of the two-stage
least squares analysis which is used for the estimate of
demand equation for rice in Thailand.

The two-stage least squares is considered to pro-
duce asymptotic unbiased, asymptotic efficient and con-
sistent estimates of structural coefficients.3 However,
the procedure assumes that the model is correctly specified.4

Within the model, the structural regression coeffi-
cients are estimated with variables in logarithmic form.
Using a logarithmic equation is primarily based on a belief
that the relationships between the variables were multi-
plicative and more stable in percentage than in absolute
terms. Also, by this transformation, the price flexi-
bilities and the demand and supply elasticities are obtain—

ed directly without cumbersome adjustments.

 

3Ibid, p. 1.

4Gail L. Cramer, Economic Relationships in the
Oil of Peppermint and Oil of Spearmintvlgdustries. Unpub-
lished Master's degree Thesis, Michigan State University,
1964, p. 86.

 

78

In any statistical analysis, however, the variables
included in the model are generally chosen at the discre-
tion of the investigator.5 In this analysis, it also
appears that some variables relevant to the supply and
demand of rice are excluded from the model. The largest
problem is the lack of reliable data and the fact that some
variables are indeterminate. Nonetheless, from an economic
standpoint the variables included in the hypothesized model
in this analysis are believed sufficient for estimating

demand and supply of rice in the economy of Thailand.

The Economic Model

 

(1.1) Longt = all + blllogY3t + b121°gY4t + b13logxlt

+ b141°9X2t + b151°9X3t+b16logX4t+U1t

(1.2) LogY3t a2l + b21logY2t _ l + bzzlogx3t

+ b231°9X5t - 1 + U2t

Where:

Y = endogeneous variables

X = predetermined ("independent") variables

Y1= average annual wholesale price of white rice
(100%) in baht per metric ton in Bangkok
deflated by the Wholesale Price Index (1958 =
100)

Y2= average annual wholesale price of paddy (no. 1)

in baht per metric ton in Bangkok deflated by
the Wholesale Price Index (1958 = 100)

 

5Lee F. Schrader, Late Summer Onion Supply Response
in the United States. UnpubliShed Master‘s degree Thesis,
Michigan State University, 1958, p. 23.

 

 

79

Y3= annual production of rice (on paddy basis) in
kilograms per capita

Y4= annual wheat and wheat flour imports (on wheat
basis) in kilograms per capita

X1= annual rice exports in millions of metric tons.

X2= income per capita in Thai baht deflated by the
Wholesale Price Index (1958 = 100)

X3= trend; 1952 = l; 1953 = 2; etc.

X4= average annual rice export tax in baht per
metric ton of rice exports deflated by the
Wholesale Price Index (1958 = 100)

X5= annual harvested rice acreage in rai per
capita

Discussion of the Results of Analyses

Estimated Demand Equation

 

Log Ylt =-4.6030 + 0.272610gy3t + 0.09051ogY4t
(1,4027) .(0.2877) (0.2270)
+ 0.117OlogX1t + 0.146610gx2t
(0.1085) (0.2351)
+ 0.0477logX3t + 0.002810gX4t
(0.0736) (0.0613)
(values in parentheses are standard errors of re-
gression coefficients)
1:2 = 0.81
Standard error of estimate(Sy.x) = 0.0004
In the economic model of demand for rice in Thailand,
the wholesale price of rice is expressed as a function of
the estimated quantities of rice produced, the quantities
of wheat imported, the quantities of rice exports, the
personal income per capita, trend, and level of rice ex-
port tax levied. It appears that these explanatory varia-

bles explains 81 percent of the variations in wholesale

80

price of rice (100%) in Bangkok market. This is determined
by the multiple coefficient of determination(R2) which is
0.81, and the low standard error of estimate(Sy,x), 0.0004.
Accordingly, it leads to the conclusion that the effects
of these explanatory variables on domestic wholesale price
of rice particularly white-rice (100%) are important. On
an individual basis, the estimated quantity of rice pro-
duced seems to have the greatest influence on price change.
An increase in rice production by 1 percent results in an
increase in wholesale price of rice by 0.2726 percent
holding the other explanatory variables in the equation
constant. The quantities of wheat imported has less ef-
fect on price of rice, it results in an increase in rice
price by only 0.0905 percent when the quantity of wheat
import increases by 1 percent, given that all other inde-
pendent variables are unchanged. The positive coefficient
for quantity of rice exported indicates that holding the
other variables constant an increase in rice exports by 1
percent will increase the domestic wholesale price of rice
by 0.1170 percent. This evidence is consistent with a
theoretical assumption that an increase in rice exports
will result an increase in domestic price since an increase
in rice exports means a decrease in domestic rice supply.
Similarly, the coefficient for personal income on per
capita basis indicates that an increase in per capita in-

come by 1 percent results an increase in price of rice by

81

0.1466 percent given that there is no change in other
variables in the equation.

The coefficient of the trend also indicates an over
time increase in the wholesale price level of rice (100%)
in Bangkok. The positive sign of the coeffieicnt of the
rice export tax levied implies that given the other vari-
ables in the model constant, an increase in rice export
tax by 1 percent will result an increase in domestic whole-
sale price of rice (100%) by 0.0028 percent.

The price-quantity relationship of the rice industry
appears inconsistent with the economic theory of demand
since a change in price of rice is associated with a change
in quantity of rice in the same direction. No one would
expect the positive sign between these two variables -- the
price and quantity of rice produced. However, there is the
possibility of multicollinearity among quantity of rice
produced; rice exports and income in the model. Then, the
estimated rice production coefficient may inefficiently
estimated. The coefficient is relatively small compared
to its standard error, and it is insignificant from statis-
tical point of view. In other words, the price flexibility
coefficient or the slope of demand equation does not deviate
significantly from zero.

The computed price flexibility of demand for rice
is 0.27. It means that 1 percent change in quantity of

rice will result a change in the price of rice by approximately

82

0.27 percent. In term of price elasticity of demand, this
implies that the demand for rice particularly rice (100%)
is rather elastic and of the wrong sign.6 Again, no one
would expect an elastic demand for most farm products
particularly rice since rice is a staple food of the people

in Thailand. And certainly one would expect a negative sign.

Estimated Supply Equation
LogY3t =-4.l770 + 0.54551ogY2tL1
(5.1031) (1.7367)
+ 0.02321ogx3t + 0.025621ogX5tL1
(0.0996) (0.5415)
(values in parentheses are standard errors of
regression coefficients)
R2 = 0.12
Standard error of estimates(Sy.x) = 0.004
Statistically, the supply equation seems to be
less reliable because of a very low coefficient of deter-

mination(R2) of 0.12.

 

6The price flexibility can also be considered as a
reciprocal of price elasticity given that the cross flexi-
bilities between a particular commodity and its substitute
or complimentary products are zero. For detail see James
P. Houck, "The relationship of Direct Price Flexibilities
to Direct Price Elasticities," Journal of Farm Economics,
. Vol. 47 No. 3 (August, 1965). pp. 789-792.

83

The variables used to explain the variations in
the quantity of rice produced include the average annual
wholesale price of paddy (No. l) in Bangkok with one year
lag, trend, and the annual harvested acreage lagged one
crop year. Using onefyear lagged price assumes that the
past yearfs price should determine the following year pro-
duction. Similarly, the past year harvested acreages are
included on the ground that it would influence acreage in
the following crop year through the availability of land,
irrigation, equipment, etc.

The trend is also used to reflect change over time
of unmeasured variables such as technological and institu-
tional changes, etc. The regression coefficient of price
indicates that an increase in price of paddy by 1 percent
results an increase of rice production by 0.5455 percent
given that the trend and acreage variables are constant.
Also, if we hold the price and the trend variables con-
stant, an increase in previous year's harvested acreage
by 1 percent will increase rice production by 0.2562 percent.
The trend coefficient indicates that rice production has de-
creased over time holding the price and acreage variables
unchanged, but the coefficient is insignificant at any
reasonable probability level.

The elasticity of supply of rice is inelastic, 0.54.
It implies that price-production response of rice is not

very high in the Thai economy. However, because of the

exclusion of

84

other unmeasured variables, since trend is not

a useful one, the specification of supply model is rather

poor and the equation is less reliable than the demand

function for predictive purposes.

Alternativngstimate
of SuppIy Equation

 

An alternative model for estimating the supply

equation is constructed as a supplement to the supply model

described in the last section. The model is the same as

the previous

model except that the current year harvested

acreage rather than the acreage with one year lag is

introduced.

The equation is also fitted using ordinary

least squares. The purpose of this alternative is to ob-

serve whether the new variable could better explain the

variations in annual production of rice. 'The equation is

presented below in the economic model:

LogY3t= a + bllogY2t_1 + bzlogX3t + b3logx5t + Ut

Where:

Y2=

X5 =

average annual wholesale price of paddy
(no. 1) in baht per metric ton in Bangkok
deflated by the Wholesale Price Index (1958
= 100)

annual production of rice (on paddy basis) in
kilograms per capita

- trend; 1952 = l; 1953 = 2; etc.

annual harvested rice acreage in rai per
capita

85

In the model the annual production of rice is ex-
pressed as a logarithmic function of the past year whole-
sale price, the trend, and the current year harvested rice
acreage. The results of the supply equation are as follows:

Log'y'3t = -2.4019 + 0.0453logY2t-l’“0.1037logX3t

(4.8713) (1.6218) (0.0470)
-1.083ZlogX5t
(0.3675)

(values in parentheses are standard erros of
regression coefficients)

R2 = 0.74

Standard error of estimate(Sy.x) = 0.0012

As a whole, the supply equation is statistically
much more reliable than that of the previous section.
Much of this reliability is attributed to the inclusion
of current year harvested acreage as an explanatory vari-
able. The equation explains 74 percent of the variation
inthe annual quantities of rice produced. The coefficient
of the price of rice in the equation, which may be considered
an estimate of supply elasticity implies that the supply of
rice is relatively inelastic. The supply elasticity coef-
ficient is 0.04, considerably different from the 0.54 of
the previous equation. If other explanatory variables
remain unchanged, however, the negative coefficient associated
with the trend indicates that rice production has decreased
over time but the decrease is relatively small and insignifi-

Cant in size. The negative sign between the quantity of rice

86

produced and the harvested acreage implies that yields
have not increased during the period while prices have
increased.

With the alternative results of estimated supply
then, an alternative estimate of demand equation using the
same model as of the previous estimate is also derived.

The price flexibility of demand in this case is 0.27 exactly
the same as 0.27 of the previous demand equation. The
multiple coefficient of determination is 0.34.7 The equa-
tion of demand is rather less reliable than the previous

one.
Conclusions and Policy Implications

General Conclusions

 

The objective of this analysis is to measure price-
quantity relationships of supply and demand of rice in the
Thai economy. Particularly, the estimates of the produc-

tion and price in the rice economy are of the most interest.

 

7The alternative estimated demand equation is as
follows:
Longt = -S.1156+0.26781ogY3t+0.3583logY4t+0.2151logxlt

(4.2737) (0.5279) (1.0539) (0.3535)
+0.20381ogX2t -0.0150109X3t+0.0282109X4t
(0.5974) (0.2881) (0.1520)

(values in parentheses are standard errors of regression
coefficient) -

R2 = .34 ; Standard error of estimates(Sy.x) = 0.0014

87

A supply equation and demand equation for rice have been
constructed and estimated using the two-stage least squares
estimation procedure.

The results of analysis of demand are: (l) About
81 percent of the variation in the price of rice is ex-
plained by the association of the variables including
estimated quantity of rice produced, quantity of wheat
imports; quantity of rice exports, personal per capita in-
come, trend, and quantity of rice export tax levied; (2)
The price flexibility of 0.27 of demand implies that the
demand for rice in Thailand is highly elastic and possibly
of wrong sign; (3) Each of the following variables, es-
timated quantity of rice produced, quantity of wheat
imports, quantity of rice exports, per capita income,
trend and rice export tax has influenced the wholesale
price of rice in Bangkok. Among these variables, estimated
quantity of rice produced has greatest effect on price
change.

The estimated supply equation is less reliable
although the alternative estimate yields a better explana-
tion of the variation in the quantity of rice produced
annually. However, the analysis provides evidence that
the rice supply in Thailand is responsive to prices. The
elasticity of supply is found to be relatively inelastic
but the equation is less reliable than the demand equation

for predictive purposes.

88

Policy Implications

 

As shown in the price analysis section, the demand
for rice particularly rice (100%) which is the best quality
of rice in Thailand is elastic; but the supply of rice is
found relatively inelastic. The analysis is based on an
assumption that the point elasticities of demand and supply
are constant throughout the demand and supply curves.
Furthermore, it is assumed that the estimated elasticities
will hold not only for the range of data generated in the
sample period but will also hold for the range of data
generated by the policy adopted by the Thai government.
This is an important assumption; if untrue, policy mis-
takes will be made. Therefore, policy makers should be
continually aware of the need to review results to deter-
mine if the assumptions remain valid. And if not, policies
will need reconsideration.

The policy implication is that the Thai rice in-
dustry should place emphasis on measures that influence
further increase in the production of rice of good quality.
However, if the supply and demand elasticities of rice are
not constant, this policy implication is relevant only on
the elastic portion of the demand curve associated with
either elastic or inelastic supply of rice. In this case,
a great increase in rice production will not result a
severe decline in price. And under rice increasing policy,

technical assistance programs should be emphasized for

89

stimulating rice expansion. The programs include the
stimulation of more intensive cultivation, expansion in
irrigation projects, credit availability, the adaptive
researches for higher yielding and better quality varieties
of rice, farm input subsidies, and market improvement. At
the same time, however, farm diversification should also

be encouraged.

Although the supply of rice is inelastic farmers
still respond to price. Accordingly, price incentive
programs can be applied in this economy. The price incentive
programs in the forms of farm input subsidies and price sup-
port can encourage rice expansion in general.

The estimated elasticity of demand for rice is
positive. However, a positively sloping demand is rarely
found and it is not significant in this case since the
standard error of the price flexibility is greater than
the value of price flexibility itself. Therefore, a down-
ward sloping demand curve is still expected to prevail in
Thailand.

With respect to the arguments that Thailand's rice
economy will be characterized by the presence of either a
rice deficit or a rice surplus within this decade, it
appears that the problem is less serious than it would be
if both inelastic demand and supply are present. The

situations can be illustrated in the following diagrams.

90

Price
www~

 

 

 

 

 

 

I
0 Q2 Q1 02 X 2
Quantity Qantity
Diagram A Diagram B

Diagram A represents a situation with the presence
of inelastic demand (DD) and inelastic supply (SS) of rice.
An increase in rice supply from SS to 5151 or from 001
to 002 will result a greater decrease in price from 0P1
to 0P2. It means that, the presence of greater rice supply
and therefore rice surplus will result in a severe decline
in price of rice. Conversely, the rice deficit or short
rice supply will result a great increase in price. In the
diagram, it is indicated that if a rice supply decrease
from SS to‘Siéi or from 001 to 062, the price will increase
in a greater proportion or from 0P1 to 0P2, As a conse-
quence, the presence of rice deficit or rice surplus will
result a greater variation in price of rice. However, a
different condition is presented in diagram B. In diagram
B, the presence of inelastic supply (SS) associated with a
relative elastic demand (DD) of rice indicates that an
increase in rice production from SS to 3151 or from 001
to OQ2 results a small decrease in price from 0P1 to1OP2.

On the other hand, if there is a decrease in rice supply

91

from SS to 8181 or from OQl to 002 an only small increase
in price will follow. Therefore, either directions of
rice production -- the rice deficit or the rice surplus
will not cause a drastic variation in rice price in this
case.

However, some argue that policy to increase rice
production will create a problem of over supply of rice
in the rice producing countries because of the green
revolution which is assumed to take place in most rice
importing countries particularly in Asia during this
decade.8 Practically, this is a long-time potential rather
than the immediate future since there are many arguments
that the rate of adoption of new high yielding varieties
of rice is very poor in most Asian countries because of
the differences in geographic conditions and rice consump-
tion patterns.9 As a consequence, the problem of over
supply or highly competitive market of the rice industry
will be slow to occur or probably will be eliminated in
Thailand since farmers are considerably responsive to price,
at the same time a rapid population growth in this country
has been evident. Therefore, the recommendation for Thailand

is that the policy of high production and exports as well as

 

8For detail see J. Norman Efferson, "Recent
Developments in the Rice Industry of Thailand," Rice Journal,
(April, 1967), pp. 36-37.

 

9Ibid, pp. 36-37.

92

the expansion of new markets should be continued for further
improvement of the rice economy and of the country as a
whole. Also, this policy regularly, will benefit the con-
sumers because the increase in rice production will result
in a lower price for rice and less money will be paid for
their rice consumption assuming that the upward sloping

demand for rice is not significant.

CHAPTER V

SUMMARY AND SUGGESTIONS FOR FUTURE STUDY

Summary

The general purpose of this study is to develop
information concerning marketing and pricing of rice in
Thailand over the past two decades. Most attention has
been given to observation of price behavior, and an analysis
of price-quantity relationships of demand and supply of rice
and their contributions to the agricultural policy implica-
tions in this country.

Since rice is the most important crop, being both
a staple food of the people and major foreign exchange
earner, public interest in the role of the rice industry in
the economy has been increasing steadily. Particularly,
consideration has been given controversies relating to
price of rice and the potential production and exports of
rice. As the economy continues to grow and change, more-
over, the equitable solution of these conflicts in pricing
and production of rice is rarely found. Many arguments
and proposals for better planning in agricultural policy

have been develOped with evidence that the direction of

93

94

movement of Thailand's rice economy will be toward some
undesirable production dilemma -- i.e., a rice deficit as
a result of rapid population growth or a rice surplus as a
result of a decrease in rice exports because many rice
importing countries succeed in eliminating rice imports
sometime during this decade. Accordingly, it is necessary
that the information concerning the current situation of
the rice economy particularly, the price, production, and
marketing of rice is needed for policy judgment and better
planning for the rice industry.

The information developed in this study including
the explanation of production and marketing, price behavior,
and the analysis of demand and supply of rice is based on
an analysis of secondary data obtained from publications
of the government of Thailand and the United Nations.

The findings in this study reveal that rice pro-
duction in this country has increased considerably over
the last 60 years and particularly during the last decade;
but there has been evidence of relatively low yield per
unit of land with downward trend until recent years when
an upward trend in rice yield has presented. The degree
of competition in the rice market has increased as a result
of the development of improved transportation and the reloca-
tion of the rice mill industry. At the same time, the
increase in degree of competition among road, river, and

railroad transportation is observed. Domestic demand for

95

rice is also found to increase in volume because of the
increase in population; accordingly, a slight decline in
rice exports is apparent. The market outlook for the next
few years can be characterized by two different views --
the presence of rice deficit or a rice surplus but no
resolution has been found. However, with the presence of
the relatively elastic demand and inelastic supply of rice
in this country the problem is less serious than it would
be if both demand and supply are inelastic. Therefore,
either rice deficit or rice surplus will not cause a serious
change in the price of rice in Thailand.

The analyses of seasonality in price and quantity
of rice in both domestic and export markets indicate that
the seasonal variation in market supply of rice in Bangkok
has significantly increased. However, the seasonal price
pattern of either paddy (no. 1) or rice (100%) is rather
small. The quantity exported and export price each exhibits
a significant increase in its seasonal pattern. On annual
basis, moreover, the long-time movements in both domestic
price of paddy and export price of rice are found to in-
crease slightly over the past two decades.

In order to examine to what extent the variations
in price and quantity of rice produced are affected by
some economic variables, an analysis of statistical demand
and supply of rice is formulated using ordinary least

squares procedure for the supply model and two-stage least

96

squares for the demand model. In the supply model, the
annual quantity of rice produced is estimated as a logarith-
mic function of the past year's price, trend, and past year's
harvested acreage. The result is not reliable with only 12
percent of the variation in quantity of rice produced ex-
plained by the price, trend and harvested acreage. Al-
though an alternative estimate of supply equation improved
its reliability, the equation is still less reliable than
the demand equation for predictive purposes; and a better
specification of the model is needed. The indicated elasti-
city of supply is 0.54 and 0.04 respectively for the two
equations.

In the estimated demand equation for rice, about
81 percent of the variation in the price of rice at whole-
sale level in Bangkok is explained by the association of
the explanatory variables including estimated quantity of
rice produced, quantity of wheat imports, quantity of rice
exports, personal income per capita, trend, and export tax.
Among these variables, the estimated quantity of rice pro-
duced seem to have the greatest effect on price. The other
variables are minor in their importance in explaining the
variation in price. Also, neither a positive sign nor the
small price flexibility of demand for rice is expected.
But the price flexibility of demand of 0.27 implies that
the demand for rice particularly rice (100%) in Thailand

is highly elastic and its positive sign seems to violate

97

the "law of demand." However, this is not significant from
statistical point of view because of its relatively high
standard error and the possibility of multicollinearity
among estimated quantity of rice produced, quantity of rice
exports, and income in the demand model.

Based on these results it is suggested that the
direction of Thailand's rice production policy should be
toward an increase in rice production through the expan-
sion in rice acreage and/or more intensive cultivation.
However, this recommendation bases on an assumption that
the price elasticity of demand for rice in Thailand is
constant throughout the entire length of the demand curve.
Generally, the different portions of a single demand curve
may consist of many different point elasticities of demand.
The policy implication on increasing rice production is then
relevant only on the elastic portion of the demand. In
this connection, it is necessary that technical assistance
in terms of better seeds, more use of fertilizer and farm
mechanization, and expansion of irrigation projects will
be of value for stimulation of increased rice production.
The price incentive program in the forms of input price
subsidization and minimum price support will not only
stimulate rice expansion but also is a mechanism to guarantee
a minimum floor prices and thereby income for farmers in
the industry. Furthermore, a readjustment in rice export

tax policy and the allocation of public funds with greater

98

emphasis on increasing agricultural productivity is urgently
needed. What is done for the improvement in the agricultural
sector will indirectly benefit the consumers because rice
will cost less and consumer expenses on food items will be
reduced.

A policy of increasing rice exports is also
recommended. A greater rice output resulting from in—
creased rice production will cause a decline in export
prices; and it is necessary that market expansion must be
done through a lower price and other nonpriced methods --
i.e., advertising, product differentiation, etc. At the
same time, a policy on market stabilization in terms of
market area must be maintained.

In concluding this study, it is hOped that this
information will provide, producers, consumers, and policy
makers, knowledge of the situation that exists in the rice
economy of Thailand; and that this information helps in the
development of better rice policies and improved agricul-

tural planning.
Suggested Further Study

In future studies of supply and demand of rice in
Thailand, the overall results of this study may be improved
if there are some changes in the model. Particularly, the
variables included in the supply equation should be better

specified for improved statistical estimates. The effects

99

of the weather and technological change should be analyzed
through an analysis of the variation in yield per unit of
land. Further studies on cost of production and the pro-
duction function of rice are also suggested. Another area
for future study is analysis of the role of expectations
on supply, in other words, a study of farmers' decision
making process, which will provide empirically useful
information related to the theory of expectations. Also,
a similar study on other farm products is recommended for
better planning of Thailand's agriculture. However, the
most crucial priority is the need for better organization
of the statistical compilation system with greater emphasis
on up-to-date publication with better quality control and

reliability.

BIBLIOGRAPHY

Adulavidhaya, Kamphol. Interre ional Competition in
Agricultural Production in Thailand. Unpublished
DoctoralJ Dissertation, Purdue University, 1970.

 

Anderson, M. M. Summary Classification of Food Con-
sumed by Households in 10 Villages of_ Ubol Province,
Thailand. Unpublished Field; Progess Report, 1964?

 

Aromdee, Virach, "Rice Economy of Thailand," Thailand
Development Report. IV (June, 1969).

 

Barker, Randolp. "Economic Aspects of High Yielding
Varieties of Rice, With Special Reference to
National Price Policies," Monthly Bulletin of
Agricultural Economics and Statistics. FAO, of
the United Nations, XVIII (June, 1969).

 

 

Behrman, Jere R., "Significance of Intracountry Varia-
tions for Asian Agricultural Prospects: Central
and Northern Thailand," Asian Survey. VIII (May,
1968).

 

. Supply Response in Underdeveloped Agricul-
ture: A Case Study of Four Major Annual Crops in
Thailand. Amsterdam. North - Holland Publishing
Company, 1967.

 

 

 

Chuhart, Chaiyong, and Tongpan, Sopin. The Determina-
tion and Analysis of Policies to Sppport and
Stabilize Agricultural Prices and Incomes of the
Thai Farmers (with special reference to rice
premium). Bangkok, Kasetsart University, 1965.

 

 

 

Committee for Economic Development. Economic Develop-
ment Issues: Greece, Israel, Taiwan, and Thailand.
New York: Frederick A. Praeger, Publishers, 1968.

 

Committee on Nutrition for National Defence. Nutrition
Survey. Bangkok, 1960.

 

100

10.

11.

12.

13.

14.
15.
16.
17.
18.

19.

20.

21.

22.

23.

24.

25.

26.

101

Cramer, Gail L., Economic Relationships in Oil of

Unpubiished Master's degree Thesis, Michigan
State University, 1964.

Efferson, J. N., "Recent Development in the Rice
Industry of Thailand," Rice Journal, (April, 1967).

Food and Agriculture Organization, United Nations.
Commodity Review. Rome. (1964-68 Edition.)

. Monthly Bulletin in Agricultural
Economics and Statistics. (Various issues.)

. National Rice Poligy. Rome, 1966.

 

. Production Yearbook. Vol. 21, 1967.

 

. Production Yearbook. Vol. 22, 1968.

 

. Rice Report. Rome, 1963-67 Edition.

 

 

The Economic Relationships Between
Grains and Rice. Commodity Bulletin Services.
No. 39, 1965.

 

. The World Rice Economy in Figure 1909 -
'l963. Rome, 1965.

 

. Trade Yearbook. Vol. 21, 1967.

 

Foote, Richard J., Analytical Tools for Measuring
Demand. USDA Agricultural Handbook. No. 64,
1954.

. Analytical Tools for Studying Demand
and Price Structure. USDA Agricultural Handbook.
No. 146, 1958.

 

 

. Seasonal Variation: Mephods of Measure-
ment and Test of Significance. USDA Agricultural
Handbook. No. 48, 1952.

 

Foreign Regional Analysis, Division of Economic Re-
search Service. Agricultural Policies in the Far
East and Oceania. USDA, Washington, D. C., 1967.

 

Fox, Karl A., The Analysis of Demand for Farm Products.
USDA Technical BulIetin. No. 1081,1953.

. Econometric Analysis for Public Policy.
Ames: Iowa State University Press, 1958.

 

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

38.

39.

102

. "Factors Affecting Farm Income, Price,
Food Consumptions," Agricultural Economics Re-
search. No. 3,1951.

 

_. Intermediate Economic Statistics. New
York: John Wiley & Sons, Inc., 1968.

 

 

 

Hathaway, Dale E., Government and Agriculture:
Economic Policyin a Democratic Society. New York:
The Macmillan Company, 1963.

 

 

Heifner, Richard G., and Ferguson, Robert P., Season-
ality on Michigan Agricultural Prices, 1958-1967.
Agricultural Economics Report. No. 18} Michigan
State University, 1968.

Hongsanand, Sirion. The Effect of Increased Fertilizer
on Rice Yields and Farm Profits in Thailand. Unpub-
lished Master's degree Thesis, Michigan State
University, 1968.

 

 

Houck, James P., "The Relationship of Direct Price
Flexibilities to Direct Price Elasticities,"
Journal of Farm Economics, vol. 47, no. 3 (August,
1965).

 

Jesness, O.B., (Ed. ). Reading on Agricultural Policy.
Philadelphia: The Blakiston Company,l949.

Krisanamis, Phirach. Paddy Price Movements and Their
Effect on the Economic Situation of Farmers in the
Central Plain of Thailand. Doctoral Dissertation,
Indiana University, 1967.

Lee, S. Y., "Post War Rice Trade in Thailand," Far
Eastern Economic Review, XVI (January - June, 1954).

 

. "Selling Thai Rice," Far Eastern Economic
Review, XLV (July, 1964).

 

Manderscheid, Lester V., "Assumption Regarding Distur-
bances and Properties of Estimators," Class notes,
Agricultural Economics 835, Summer 1969, Michigan
State University.

Narksawasdi, Udhis. Farmers Indebtness and Paddy
Marketingj in Central Thaialnd Tin Thai version).
Bnagkok: The Government of Thailand, 1964.

 

Riley, Harold M., Some Measurements of Consumer Demand
for Meat. Unpublished Doctoral Dissertation,
Michigan State University, 1954.

 

40.

41.

42.

43.

44.

45.

46.

47.

48.

49.

50.

51.

52.

53.

54.

103

Roy, Edward Van, "The Multhusian Squeeze on Thailand's
Rice Economy," Asian Survey, VII (November, 1967).

 

Sanittanont, Sura. Thailand's Rice Export Tax: Its
Effect on Rice Economy. Doctoral Dissertation,
University of Wisconsin, 1967.

 

 

Shepherd, Geoffrey 5., Agricultural Price Analysis.
Ames: Iowa State UniverSity Press, 1963.

 

Soothipan, Arkom, and Ruttan, V. W., "An Analysis of
Changes in Rice Production, Area, and Yield in
Thailand," Proceedings of the Fourth Conferences
on AgriculturalgEconomics. Bangkok, Kasetsart
University, 1965.

 

 

Spurr, William A., and Bonini, Charles P., Statistical
'Analysis‘for'BusineSS‘Decisions. Homewood: Richard
D. Irwin, Inc., 1967.

 

 

 

Schrader, Lee F., Late Summer Onion Supply Response in
the United States. Unpublished Masterrs Degree
Thesis. MiChigan State University, 1958.

 

 

 

Thailand, Division of Agricultural Economics. Agricul-
tural Statistics of Thailand, 1963. Bangkok, 1965.

 

. Agricultural Statistics of Thailand,

 

 

1966. Bangkok, 1968.

. A Study.on Rice and'Production and

 

Consumption in Thailand. Bangkok, 1967.

Thailand, National Statistics Office. Thailand
Population Census. Bangkok, 1960.

 

. Compilation of Important Statistics of

 

 

Thailand (in Thai). Bangkok, 1969.

Thailand, Office of National Economics Development
Board. Thailand National Income Statistics (1964,
1966, and 1967 Edition). Bangkok.

 

. The Second National Economic and Social

 

 

Development Plan (1967 - 1971). lPangkok, 1968.

 

Thailand, Department of Rice. Number of Rice Mills
and Rice Storage Bins in Thailand, 1956. Bangkok.

 

Thisyamondol, Pantum, and Long, Millard F., Agricul-
tural Credit in Thailand. Bangkok, Kasetsart
University, 1965.

56.

57.

58.

59.

60.

104

Usher, Dan, "Thai Rice Trade," Thailand'Sgcial and
Economic Studies in'Development. Ed. T. H.
Silcock. Durham: Duke University Press, 1967.

West, Questin M., "Trends and Development in Foreign

Trade," Paper presented at the National Marketing
Workshop. New Orleans, (May, 1969).

Wharton, Jr., Clifton R., "The Green Revolution,"
Foreign Affairs, (April, 1969).

Willett, Joseph W., The Impact of New Grain Varieties
in Asia. USDA, ERS - Foreign No. 275, 1969.

 

Working, Elmer, "What Do Statistical 'Demand Curve'
Show?," Quarterly Journal of Economics, Vol. 41,
No. 2 (February, 1927).

 

 

APPENDIX A
TABLE A.1
RICE PRODUCTION, RICE SUPPLY FOR

DOMESTIC UTILIZATION, RICE ACREAGE
AND MIDYEAR POPULATION, THAILAND, 1950-67.

 

 

 

 

 

 

Year Rice Rice Supply Rice Midyear
Production1 for Domestic Acreage Population
Utilization2
(kgs/capita) (kgs./capita) (rai/capita) (millions)

1950 305 236 1.70 19.6
1951. 361 254 1.80 20.2
1952 317 204 1.54 20.8
1953 383 314 1.72 21.4
1954 258 190 1.25 22.1
1955 320 240 _ 1.47 22.8
1956 355 273 ‘I.61"'“ ' ‘”23.4
1957 232 138 1.11 24.1
1958 281 210 1.30 24.9
1959 266 200 1.29 25.6
1960 295 228 1.34 26.4
1961 302 213 1.30 27.2
1962 332 263 1.39 28.0
1963 347 274 1.38 28.8
1964 323 226 1.26 29.7
1965 301 208 1.21 30.6
1966 381 308 1.38 31.5
1967 283 217 - 34.2
Source: 1950-66, Agricultural Statistics of Thailand, 1966

 

(Bangkok, 19687. pp. 46-176.

1967, Rice, FAO, Production Yearbook, Vol. 22,
1968, p. 77; population, Office of National
Economic Development Board, Bangkok.

1. Total rice production (on paddy basis) divided
by midyear population.

2. Total rice production minus rice exports for a
particular crop year divided by midyear population,
(on paddy basis).

3. Harvested area

- no data available

 

105

TABLE A. 2

WHOLESALE PRICES OF WHITE.RICE (100%),
PADDY (No. 1); PER CAPITA INCOME, AND
WHOLESALE PRICE INDEX, THAILAND, 1950-1967.

 

 

 

 

Year White Rice Paddy(No.1) Per capita Wholesale
(100%)Price Price Income Price Index
(baht/ton) (baht/1,000 (baht) (1958 = 100)

kgs.)

1950 - 745 1,191 76

1951 1,738 787 1,253 82

1952 1,912 872 1,264 87

1953 1,718 799 1,335 82

1954 1,705 705 1,277 79

1955 1,880 817 1,530 92

1956 1,858 935 1,555 95

1957 1,771 947 1,526 95

1958 1,998 1,095 1,539 100

1959 1,791 937 1,635 92

1960 1,636 901 1,807 92

1961 1,754 977 1,842 100

1962 1,990 1,147 1,948 106

1963 1,803 993 2,007 99

1964 1,678 828 2,109 92

1965 1,645 881 2,207 96

1966 1,800 1,197 2,499 110

1967 2,189 1,245 2,465 118

Source: Paddy price, FAO, Production Yearbook, Vol. 21-22,

1967-1968;

 

per capita income 1950-1966, Agricultural Statis-
tics of Thailand, 1966:1967, National Income of

 

Thailand,

(1967—edition), p. 5.

 

 

Wholesale Price Index, Department of Commercial

Intelligence, Bangkok, base year period was
formerly 1948;

white rice (100%) price, Department of Internal
Trade, Bangkok.

— no data available

106

TABLE A.3

RICE EXPORTSIWHEAT AND
WHEAT FLOUR IMPORTED IN WHEAT
EQUIVALENT, AND RICE EXPORT TAX,
THAILAND, 1950 - 67.

 

 

Year Rice ExportsWheat & Wheat Flour' Rice Export Taxg/

 

 

 

 

(million Imported in Wheat
tons) Equivalentl
Total(tons) Per capita Total Avera e
(kgs.) (million) (bahtaton)

1950 1.42 15,639 8 - -
1951 1,47 18,239 9 - -
1952 1.55 18,238 9 362 233.55
1953 1.36 24,288 11 695 511.03
1954 1.00 28,585 13 718 718.00
1955 1.24 33,328 14 441 355.65
1956 1.27 37,116 16 842 663.00
1957 1.57 41,497 17 840 535.03
1958 1.13 36,924 15 812 718.58
1959 1.09 35,455 14 756 693.58
1960 1.20 32,381 12 745 620.83
1961 1.58 35,700 13 872 551.90
1962 1.27 37,200 13 753 592.91
1963 1.42 41,100 14 819 576.76
1964 1.90 39,300 13 1,238 651.58
1965 1.90 35,100 11 1,192 627.37
1966 1.51 61,000 19 995 658.94
1967 1.44 81,000 24 944 655.56
Source:

 

Rice exportsl950-66, A ricultural Statistics of
Thailand, 1966 (Bangkok: I968); I967, Sopin
Tongpan op. cit., p. 106.

l/ 1950-60, computed from data in A ricultural
Statistics of Thailand, 1966: 1961-66, FAOJTrade
Yearbook, 1967, p. 102; 1967, Internation Wheat
Council, World Wheat Statistics, 1969, p. 34.
Conversion rate: 1 metric ton(2,240.6 lbs) wheat

= 36.7437 bushels; 1 metric ton(2,240.6 lbs) wheat
flour = 50.6598 bushels wheat; 1 metric ton wheat
flour = 1.3787 metric ton wheat.

 

 

 

2/ Bank of Thailand, Bangkok, (calendar year).
- no data available

107

TABLE A.4

PADDY PRICE INDICES IN THAILAND,
THE UNITED STATES, BURMA, JAPAN,
SOUTH VIET-NAM, AND UNITED ARAB REPUBLIC,
1950-67 (1957-59 = 100)

 

 

Year Thailand1 United Burma3 Japan4 South United

 

States2 Vietnam1 Arab Rep.5
1950 128 106 100 62 52 96
1951 134 100 100 72 56 88
1952 149 122 100 84 90 88
1953 136 108 100 104 97 67
1954 121 95 100 97 54 94
1955 96 100 100 99 81 100
1956 96 101 100 97 110 100
1957 98 107 100 99 103 100
1958 106 97 100 99 110 100
1959 98 95 100 100 87 100
1960 92 94 100 101 88 100
1961 100 107 100 107 110 100
1962 117 105 100 118 124 88
1963 102 104 103 127 115 85
1964 85 102 103 144 125 85
1965 89 103 103 159 137 94
1966 123 103 - 173 - 111
1967 128 102 - 190 - 125

 

Source: Computation based on data in FAQ, Monthly Bulletin
of Agricultural Economics and Statistics, IX, July,
1960, p. 55; FAQ, Production Yearbook, Vol. 22,
1968, pp. 540- 542.

 

 

 

1 wholesale price; 2 average producer price; 3
government minimum producer price; 4 government
- fixed producer price (Husk): 5 government-
fixed producer price.

- no data available

108

TABLE A.5

RICE: INDICES OF ANNUAL EXPORT
PRICE IN THAILAND, BURMA, AND THE
AVERAGE WORLD EXPORT PRICE INDEX,

1955 - 1967

(1957-59 = 100)

 

 

 

 

Year Thailand1 Burmal Average World
Price Index

1955 101 123 -

1956 99 100 -

1957 99 97 104

1958 106 104 98

1959 95 99 89

1960 89 96 93

1961 98 99 103

1962 109 . 99 103

1963 103 101 103

1964 98 107 103

1965 98 116 105

1966 119 110 118

1967 159 128 141
Source: 1 Computed from data in FAQ, Production Yearbook,

 

1963-68, Vol. 17-22.

2 FAQ Average Price Index, FAQ, Monthly Bulletin
in Agricultural Economics and Statistics (Various

 

issues); FAO, Rice Report, 1963-67; FAO, Commodity,

Review (various issues).

Thailand: white rice 5-7% broken, government
standard f.o.b. Bangkok.

Burma: f.o.b. Rangoon, prices under bilateral
agreements with Ceylon.

109

APPENDIX B: STATISTICS ON SEASONALITY

110

lll

 

 

 

 

 

0.0- 5.0- 0.0: 0.0: 0.0: 0.0 5.0 0.0 0.0 0.0 0.0 5.0 22000
0.00 0.00 0.00 0.00 0.00 0.50 0.00 0.00 0.00 0.00 0.00 0.00 >02 new
0.00 0.00 0.00 0.00 5.05 0.00 0.05 5.00 0.000 0.500 0.000 0.050 20020
own >02 900 020 020 020 220 002 000 m0: 000 200
00000200020 mo 00220
00.0 00.0 00.0 00.0 00.0 00.0 05.0 00.0 00.00 05.00 00.00 05.00 0000
00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 0000
00.0 00.0 00.0 00.0 00.0 00.0 05.0 00.0 00.0 00.0 00.0 00.0 0000
05.0 00.0 00.0 05.0 00.0 05.0 00.0 00.0 00.0 00.0 00.0 00.0 0000
00.0 00.0 00.0 00.0 00.0 00.0 05.0 00.0 00.0 00.5 00.0 00.00 0000
00.00 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.00 00.00 00.00 0000
00.0 00.0 00.0 00.0 00.0 00.0 00.0 05.5 00.0 00.0 00.00 00.0 0000
00.0 00.0 00.0 05.0 05.0 00.0 00.0 00.0 00.0 00.00 00.00 00.00 0000
00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.00 00.0 00.0 0000
00.0 00.0 00.0 00.0 00.00 00.00 00.00 00.00 00.00 00.00 05.00 00.00 5000
00.00 00.00 00.00 00.00 00.00 00.0 00.0 00.0 00.0 00.00 00.00 00.00 0000
00.00 00.0 00.0 00.0 00.0 00.00 00.0 00.0 00.50 00.00 00.00 05.000 0000
00.0 00.00 00.00 00.50 00.00 05.00 00.5 00.0 00.50 00.00 05.50 00.50 0000
00.00 05.00 00.00 00.00 00.00 00.50 00.00 00.00 00.50 00.00 00.00 05000 0000
00.00 05.00 00.00 00.00 00.00 00.00 00.00 05.00 00.50 00.50 00.05 00.00 0000
00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.50 00.00 05.05 00.000 0000
05.00 00.00 00.00 00.05 00.00 00.00 00.00 00.05 00.00 05.00 05.05 00.00 0000
can >02 000 020 020 020 220 002 200 202 mmm 200
00200 000.00
00-0000 .22000020 .0200002 02202020 020 2020200 00 020200 00200 mo 00092020

H.m mqmfla

112

 

 

 

 

N.ol a.on a.ol a.oI a.ol a.oI N.ol a.ol N.ol N.ol a.ol a.o azmma
m.m m.m m.v h.m m.m m.m m.m v.m a.m m.N m.m v.m >m0 Dam
h.moa a.moa m.¢oa ¢.moa m.moa m.moa m.mo a.mm N.mm a.¢m «.mm m.am meZH
0mm >02 BOO mum 0D¢ ADH ZDU Mdz mmd mfiz mmm Z€b
NBHA4ZOm¢mm m0 meZH
mmma owma bmma mmva mmma «flea ooma mama mmaa wmoa mom mooa ooma
mNaa mmoa mmoa maoa mam mam mob mam mom mom mam omm mmma
ovm owm mmm ohm omm mom who omm omm mmm mmm oam 0mma
mom oaoa mmoa mmoa oNaa oNaa mmoa omm ohm mooa mooa mom moma
mwaa mmma mmma omma mNNa oNNa mmaa ovma omaa omoa mmoa omm mwma
mmaa mmaa ooaa owoa maoa mooa omm mom mam omm omm omm amma
mmm mmm mmm mmm mom oom owm oam oom oam mNm mam omma
omm ocm omm mom omm omm mom owm mmm mmm mmm owm mmma
mvma oNNa mmaa mmaa omaa mmaa mmaa oaaa omoa mmoa mom ova mmma
mooa oooa oooa mooa owoa mmoa mvm omm mam mom oom mom hmma
mam mom ovoa owoa mmoa oaaa mmoa ovoa mmm mmm omm mam mmma
omaa mmaa ovaa mmaa mmoa maoa omm omm mom omw omm omm mmma
omm omm omm mqm mmm mob mob mom mam oom mhh ooh 0mma
omm ooh oam wow wow mow omm mmo mmm omm mvm omm mmma
mmm omoa omoa mmm mmm mmm omo omm mam mum omm mum Nmma
mvm mvm mwm ohm omm ohm ohm mmm mam mon 000 omb amma
mvm mvm mvm mmm mmm mam omm mam mob man mob omh omoa
0mm >02 BOO mmm 05¢ ADD ZDb was mad m<z mmm 24b

 

 

0200\02000 00:0000 .02000020 .02002000 020 2020240 20 00002
0000:02004 ommm>00mo 00.02000000 00 000mm 000000023 0020202

N . m mamdfi

113

 

 

 

 

.o .o o.ol o.o .o a.ol a.0I m.ol a.on a.ol a.ol a.o 02225
.m .0 a.m m.m .v a.m m.m o.v ¢.m m.m v.m m.m >20 new
.moa .woa o.voa m.voa .moa m.moa m.aa ¢.ma m.ma m.¢a o.ma m.aa xMQZH
ONO >02 BOO mmw 02¢ ADb 22h 2&2 mm< 2&2 mmm 2¢b
MEHa<20m¢mm mo NHQZH

amaa ammm mmvm vamm maam vvmm moam moom amom amaa vmma mama mmaa
vmom ooaa mmma maaa mmma aoma omva mava ooma mmma omma amma mmaa
aoaa m¢aa ooaa omaa amaa mvaa mvma aama amma aoma aama ooma mmaa
mvaa amaa omma wmma mama aoaa mama amaa mmaa mmaa maaa vmaa mmaa
aoam vmom ooam amom maom maom mmom maom mmaa aoma vmaa ooaa mmaa
vmam mvom amma mama mama omaa maaa vmaa amma mama omma mava amaa
mmaa aaaa aaaa mmaa mmma mmaa amma mava mmva amva aama vmma omaa
mama mama mama mmma amma mmaa aoma mmma amaa maaa mvaa aoaa amaa
mmmm maam amam mmam mmom amaa ooom «mom aaaa amma maaa mama mmaa
ooma ¢maa aama mama amaa mmaa mmaa aoaa mama amma amma amma amaa
mmaa amma ooaa mmaa mmom maaa omaa omaa omma amaa vmma amma mmaa
mamm mmam aaom aaom mwaa mmma ooma omaa aaaa ooaa mama mmma mmaa
mmaa mmaa omaa amaa vmaa mama amma amma vmma ooaa amma mvma vmaa
mwaa mama omma mama aaaa aaaa aaaa mmaa mmaa amaa ooma mama mmaa
mmom mmam mmom vmom amom amaa aaaa mama moma amma mama mmma mmaa
mmaa mmaa amaa mama aoaa mama aaaa aaaa ooaa aama vmma mmma amaa
0mma omaa mmaa aoaa aoaa maaa wmaa aama amma ooma mmva amva omaa
DMD >02 BOO mmm 02¢ 00b 22b 242 mm< mm: mmm 2¢b

 

 

0200 002022\0242.

00-0000 .02200220 .2020222 20
22002 20023 00:00002002 20 20022 20202002: 0020202

m.m mamdfi

114

 

 

 

 

 

 

 

0.0- 0.0- 5.0- 0.0- 5.0- 0.0- 0.0 0.0 0.0 0.0 0.0 0.0 02220
0.00 0.00 0.00 0.00 5.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 >20 000
0.00 0.05 ahm5 0.00 a.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 22020
020 >02 000 220 002 000 200 022 222 222 222 220
00002200220 20 22020
00 00 00 00 00 000 050 000 500 000 000 000 0000
000 000 05 000 000 000 000 000 000 000 000 000 0000
000 000 000 000 000 000 000 050 000 000 000 000 0000
000 00 00 00 000 000 000 000 000 000 000 000 0000
50 50 00 00 00 00 00 000 550 000 000 500 0000
000 55 00 000 000 000 000 000 000 000 000 050 0000
000 05 00 05 000 000 00 000 000 00 50 000 0000
000 00 05 00 05 55 00 000 00 00 00 00 0000
00 00 00 00 000 00 000 500 00 000 00 000 0000
000 05 000 00 000 000 000 000 500 000 000 050 5000
000 000 00 55 00 500 00 000 00 00 000 00 0000
000 00 00 00 000 00 000 000 500 000 000 00 0000
00 00 50 00 000 50 05 00 00 000 00 00 0000
000 00 00 000 500 000 000 000 000 000 00 00 0000
00 000 000 000 000 500 000 500 05 000 000 000 0000
000 000 000 000 000 000 00 000 000 050 000 000 0000
020 >02 000 220 002 000 200 022 222 222 222 220
00200 002022 000.00 00-0000 .02200220

.0020222 2020220 0020 2002 20 00002200

v.m mam¢8

115

 

 

 

 

 

 

0.0- 0.0 5.0- 0.0 5.0 0.0 0.0- 0.0- 0.0 0.0 0.0 0.0- 02220
0.00 0.00 0.00 0.00 5.00 0.00 0.00 5.00 5.00 0.00 0.00 0.00 >20 000
0.000 0.05 0.00 0.05 0.00 5.00 0.00 0.000 0.000 0.000 0.000 0.000 02020
020 >02 000 220 002 000 200 022 222 222 222. 220
00002200220 20 22020
00.0 00.0 00.0 00.0 00.0 00.0 00.0 00.0. 00.00 00.00 00.50 00.00 0000
00.0 00.5 00.0 00.00 00.00 00.0 00.5 00.0 00.0 00.0 00.5 00.5 0000
00.0 00.5 00.0 00.0 00.0 05.0 00.5 00.00 00.0 00.0 00.0 00.5 0000
00.5 00.0 00.5 00.0 00.0 00.5 00.0 00.0 00.0 00.0 00.00 00.00 0000
00.0 00.0 00.0 00.5 00.0 00.0 00.0 00.00 00.50 00.50 00.00 05.00 0000
00.00 00.0 00.0 00.0 00.0 05.5 05.00 00.00 00.5 05.00 00.00 05.00 0000
00.0 00.5 00.0 00.0 00.00 00.50 00.00 00.00 00.00 00.00 00.00 00.00 0000
00.00 00.00 05.00 00.00 00.00 00.00 00.00 00.50 00.00 00.00 00.50 00.00 0000
05.00 00.5 00.0 05.00 00.00 00.00 00.00 05.00 00.00 05.00 00.00 00.00 0000
00.0 00.00 00.00 00.00 00.50 00.00 00.50 05.00 05.00 00.00 00.00 00.00 5000
00.00 00.00 00.00 05.00 00.00 00.00 00.00 05.05 00.00 00.00 00.00 00.00 0000
020 >02 000 220 002 000 200 022 222 222 222 220
20200 002022 000.00 00-0000 .02200220 .020202 20002002 20 00002200

m.m mamdfi

116

O

0.". fil..\f1l.lun.. Err

 

 

 

 

0.0 0.0 2.0 2.0 0.0I 2.0! 0.0 0.0I 0.0I 0.0 0.0 0.0 ozmma
0.2 0.0 0.0 0.0 0.2 0.2 2.2 0.0 0.0 0.2 0.0 0.2 >mn 080
0.00 2.00 0.00 0.000 0.200 0.000 0.000 0.000 0.00 0.000 0.00 0.00 mezH
0mm >02 BOO mmm wa now 250 002 mm4 Md: mmm z<b
NBHAdZOmdmm m0 NNQZH

00.00 00.00 00.00 00.00 00.00 00.00 0N.m0 00.00 00.00 00.00 00.000 00.20 0000
00.00 00.00 00.00 00.00 00.20 00.00 00.00 00.00 00.00 00.00 00.00 00.00 0000
00.00 00.00 00.20 00.00 00.N0 00.00 00.00 00.00 00.00 00.00 00.00 00.00 0000
00.00 00.00 00.00 00.00 00.00 00.02 00.02 00.02 00.02 00.02 00.02 00.02 0000
00.02 00.02 00.02 00.02 00.00 00.00 00.02 00.02 00.02 00.02 00.02 00.02 2000
00.02 00.02 00.00 00.00 00.00 00.00 00.20 00.00 00.02 00.00 00.00 00.00 0000
00.02 00.02 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.02 N000
00.02 00.02 00.00 00.02 00.02 00.00 00.00 00.00 00.02 00.02 00.02 00.02 0000
00.22 00.22 00.02 00.02 00.00 00.22 00.02 00.02 00.02 00.02 00.02 00.22 0000
00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 0000
00.02 00.00 00.20 00.00 00.20 00.00 00.00 00.00 00.00 00.00 00.00 00.00 0000
00.00 00.00 00.00 00.20 00.00 00.00 00.02 00.02 00.02 00.02 00.02 00.02 0000
00.00 00.00 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02 00.02a 00.02 0000
0mm >02 BOO mmm 03¢ 0:0 250 M02 mmd mdz mmm 240

 

 

0200 002022xw0 00:0000 .02200220

.02020222 .0.o.00 20022 020222 005:002002 0020202

0.m mnmdfi

117

 

.2020220 .0000002 00502002 00 00000202
.00000 02200020 00 0202000202 8000 00200020 0020 0020202 2000 00022300 "000200

 

 

0 0 0 0 0 0 00 020 000 00N 00N N00 0000
00 00 N2 00 00 00 000 000 020 2N 220 200 0000
00 00 2N 00 00 MON 200 00 200 00 0N0 N00 2000
0N 000 20 00 00 000 00 00 20 0NN 00N 0NN 0000
0N 00 0 00 020 N0 00 000 00 020 000 NmN N000
00N 00 00 0N 00 00 02 00 N0 00N 00N 000 0000
00 00 N0 00 00 m0 m0 000 NNO 000 000 000 0000
00 000 00 20 00 00 00 00 m0 000 0NN 02m 0000
020 N m 00 2N 00 000 00 0N0 000 020 000 0000
00 02 00 00 N0 000 20 000 000 000 020 N00 0000
000 20 200 00 00 00 00 00 00 000 000 00N 0000
020 20 02 mm 00 00 00 02 000 000 020 000 0000
N0 00 020 000 2N0 N0 02 N0 20 020 N00 020 2000
020 00 20 20 N00 000 00 20 200 000 00 000 0000
00 0N0 000 000 000 00 00 00 00 00 020 000 N000
000 00 00 00 000 00 20 00 20 020 000 000 0000
000 00 00 000 000 00 0 0 0 0 0 0 0000
0mm >02 BOO mmm wbfl 090 ZDU 042 mm« M42 mmm Zdb mdmw

 

 

0000 n 00:5000 00020 00202020

00l0000 .DZdAHflmB .mmmAAHZ HmszomE 02¢
MOMGZGm wm Bmwbom MDQ4m ho MBHBZGDO m0 mmUHQZH

0.m mflmdfi

118

 

 

.0000200 .0000000 00502000 00 00000202
.00009 00200020 00 0205000000 5000 00200000 00000 0000208 8000 00050800 «000000

 

0 0 0 0 0 0 000 00 00 00 00 N0 0000

 

000 000 000 000 00 00 00 00 00 00 00 00 0000
000 000 00 N00 N00 N00 000 000 00 v0 00 00 0000
00 000 000 000 000 000 N00 00 00 N0 00 00 0000
000 000 000 000 000 000 000 000 00 00 00 00 N000
000 000 000. 000 000 000 00 00 00 00 00 00 0000
000 000 000 000 000 000 00 N0 00 00 00 00 0000
000 000 00 00 000 000 000 00 00 00 v0 00 0000
000 000 000 000 000 000 000 000 000 00 N0 00 0000
00 00 000 N00 000 N00 00 00 00 00 N0 N0 0000
m0 000 000 000 000 000 000 000 v0 00 v0 00 0000
000 000 000 N00 000 000 000 00 00 00 00 00 0000
000 000 N00 N00 000 00 00 00 000 00 00 00 00000
000 v0 00 000 000 000 000 00 00 00 N0 00 N000
N00 000 000 000 N00 00 00 00 00 00 00 00 N000
000 000 000 000 000 000 N00 00 00 v0 00 00 0000
000 000 000 000 000 N00 0 0 0 0 0 0 0000
000 >02 800 000 09¢ 0Db ZDb 0&2 00¢ m0: mmm Z00 ., 0400

 

 

Aoo0 n 00:0000 .00000 00002020 00-0000 .02000000 .00002000 020 0000240
20 00002 0000:02000 ammm>0qma 00.02000000 00 000mm 000000003 00 0000020

0.m mqmfifi

119

.xoxmamm .muflmmmd owfionoom mo muumwnflz
.mnmga HmnnmuqH mo usmfiuummmn Eoum wmawmuno moaum hasucoe Eoum amusmeoo "mousom

 

 

o o o o .o o HOH hm HOH am pm Hm mmma
MHH moa had boa mm Hm mm mm cm mm hm hm mmma
moa moa MOH moa moa woa mm mm mm vm vm mm «mod
ooa ooa moa moa ooa moa MOH mm mm mm mm om mmma
moa hoa moa voa moa moa Ned med mm mm mm om mmma
¢HH HHH Noa vm vm mm Ned NOH mm 00H Hm mm amaa
NOH NOH MOH moa NHH moa NOH mm mm om mm mm ommH
HOH OOH mm moa woa moa OOH NOH vm mm om mm mmma
«Ha HHH moa boa HOH mm HOH woa ooa mm mm om mmma
hm hm 00H moa moa moa mm mm mm mm mm mm bmma
mm . NOH MOH wed moa boa voa Hoa w¢ am mm mm mmma
mad HHH boa boa MOH ooa hm mm mm mm mm vm mmma
voa Hoa moa «0H NOH mm hm mm mm Hoa mm mm vmma
moa mm mm cad OCH OCH ¢m mm mm mm mm om mmma
moa HHH moa moa moa NCH OCH OCH mm mm mm om mmma
boa moa HHH moa ha mm mm OOH ooa mm Hm om Hmma
woa moa NOH NOH MOH mOH o o o o o o omma
0mm >02 BOO mmm UDd ADD ZDU Md: mad mdz mum 2&6 mdmw

 

 

Aooa u am I mmma .mHmmm wqmazozv

mmuomma .oz«qa<ma .momoz¢m zH
AmUHm maHmz mm u ooavaHm mo mUHmm mq¢mmqomz mo mmuHozH

m.m mamda

120

 

 

.Ammammw msowum>v .mowumflumum can moflaocoom
Annapanowumfi mo cflpmaasm wanucoz .omm cw mumc uuomxm ManucoEAfioum ompamfioo ”mouaom

 

 

 

o o o o o o mma HNH Fwd vma mm mm mmma
mm moa av wed mm OOH HMH HNH OMH hNH mw mh mmma
am an mm mm mmH mNH MMH wad OHH woa MHH Hm vwma
mm mm om vb mm boa NHH mwa vma NHH baa waa mmma
m5 mm hm hm vo «m om hMH NmH mma bma mvH mmma
NOH mm mm mh mm moa NHH med 00H mma mNH find Hmma
vm mm mm mm mad HmH mm mHH mm mm mm mNH coma
HMH mm ¢m am pm «m am one MHH mma mad boa mmma
HHH om mm vw - mHH ooa mHH OHH Hm NMH mm hma mmma
«m mm Hm Nb NNH moa voa mm mad moa OOH «ma hm¢a
mad voa m5 no mm 00H Hm mNH MOH mm MHH hm mmma
moa vm an Hm hm mm mNH mud vma mmH OHH vv mmma
mm mm moa OOH mNH moa om mm hoa hma vb mm vmmd
mva ~¢ o¢ OHH odd boa mud hNH OHH «Ha m5 wm mmma
hp mm mm hNH hm mad baa mm hm HOH moa NHH mmma
OHH mm mm MOH vHH cm 0 o o o o o amaa
0mm >02 BOO mmm UD4 ADD ZDb Md: mm¢ m<z mmm Z46 Mdmw

 

 

Aooa u mmnnmma .mHm¢m unmazozv
$3 .. $3 .ozmflmmadumomxm $me 1.35 82 mo 33550 no 9335

OH.m mflmda

121

.xoxmcmm .mnflmmmfi Oflfiocoom mo anumflcwz .mwmna .
cmflmuom mo ucmfiuummmn may Eonm wmcwmuno mama uuomxm hanpaofi scum omusmaou «wounom

 

 

o o o o o 0 mm hm . vmm Nva mmH woa mmmH
om mm ow mud mud moa OOH qh mm vm NOH boa mmma
NNH NOH mm mm HHH Hm mm mma «NH wm mm moa wmma
moa mm moa vm on mm MHH HHH OOH mHH mma mma mmma
MHH mm Hv m5 aw mv om Hm va HmH mod va mmma
MOH mv vv mm Nb «5 ONH bma Nb vma vhH HNH meH
mm mm mm mm moa mmH voa NNH moa 5m om moa ome
mm moa mm ONH vm mm mm om moa vm NmH me mmma
ova aw mm mm mm mm mm moa NHH mHH mm ova mmma
mw mm woa fim NHH moa boa mNH mm mmH mm NMH mmma
NNH mm ow am mm mm o o o o o o mmma
0mm >02 BOO mmm 00m ADb ZDb N42 mmd mas mmm Zflb Mdmw

 

 

Aooa n mmnhmma .mHmdm wqmezozv
we a_mmmH .oz<qH<ma .amomxm Ammvmon mo waHezaoo mo mmoHazH

HH.m mqmda

122

 

.wmmsmmH mSOHHm>V .mOHumHumum can moHEocoom
HmusuHsowmm< mo :HumHHam MHsuaoz .OOm :H moHHm unomxm mHsucoE ECHO wwunmfioo ”m0H50m

 

 

O O O O O O OO mm HOH OOH HHH OOH OOOH
HOH mm OOH NOH mm OOH hOH Om 5O OOH mm vm hOmH
Om mm HOH OOH OOH OOH HOH HOH Om OOH mm Hm OOOH
mm mm OOH MHH OOH mm mm Om mm hm mm mm mOOH
Om mm OOH NOH «OH OOH OOH hm mm hm Om hm VOOH
mm mm OOH vOH MOH OOH OOH NOH mm Om mm hm mOmH
mm mm mm MOH OOH mOH hOH mHH hOH vm mm Hm NOOH
wm Om mm mm Om MOH NOH mOH HOH mm mm vm HOmH
mm mm mm OOH MHH mm mm NO mm mm Om mm OOOH
OOH mm mm OOH NOH NOH mOH NOH mm hm mm mm mmmH
mm mm «OH OOH MOH HOH OOH OOH mm OOH hm mm OmmH
hm mm OOH OOH OOH NOH hm Om mm HOH NOH NOH hmmH
NO mm mm Hm OOH OHH O O O O O O OmmH
0mm >02 BOO mmm 09¢ ADO ZDO Md: mm< ad: mmm 24h m<mw

 

 

Aooa n mmunmma .mHmam unmazozv
mmummma .az¢gHmma .Amomwz«m .n.o.mvmuHmm amomxm AwhnmvmuHm mo mmoHazH

ma.m mqmda

123

.NOOH OGH3OHHOO mummm H0O GOHuMHnono meaH H0O MHQMHHm>m wumc on “mmuoz

.nm .m .mmmflw.xoxmamm
.muHmHm>HcD unmmpmmmm.AEdHEmHm moHH on oocmnmmwn HmHowmm suH3O mumfiumm ngw
may mo mmEoocH can mmOHHm HmnsanOHumd muHHHnmum new uuommwO on mmHOHHom

 

 

 

 

mo mHmOHmcdlucm GOHumcHEHmpma mna .cmmmcoa quom cam gumsonnu OGOOHmsu "mousom
OOH OHH NNH OHH HNH HNH OHH OOH HOH OO OO OOH NOOH
HOH OOH «OH «OH OO . OO NO OO OO wO OO NO HOOH
OO OO OO OO HO OO OO OO OO OO OO NO OOOH
5O HO On OO vO vO HOH HOH OOH OOH OOH OOH OOOH
HHH OHH OHH OO OHH OOH OOH OOH OOH OOH «OH OOH OmOH
HOH OOH OOH HOH OOH OO «O OO OO NO Ob OO OOOH
was >02. Boo mum 054 now zan OOS mm< m¢z mum zmn m¢mw

 

 

Aooa u OmuanH ~OHOOO wqmazozv
NO u hmOH .AzOHzmmm mon masz muHmm amomxm mw¢mm>< Hmma mo mmoanw

MH.m mflmdfi

124

.mmxquH nuaoeINH mo mmmnm>m may 0» Hmzvm anammwom: #0: OH mecH Hmnacd «

oHQMHHm>m mumu o: I

 

 

.AmmsmmH mDOHHm>O .3mH>mm MuHUoEEOU 04m TOO OOOH .uuommm mon .o¢m .AmeOOH
msoHHm>O mOHumHumum cam OUHEozoom HmnsuHDOHumd CH aHumHHsm mHsucoz .omm “mousom

 

 

 

OOH I I I I OHH OOH NOH HOH HOH NOH OOH HOH OOOH
OOH HOH NOH NOH OOH OOH OOH OOH OOH OOH OOH OOH OOH OOOH
OOH NOH HOH OOH OOH OOH OOH OOH OOH HOH NOH NOH OOH OOOH
OOH OO OO OOH OOH OOH OOH OOH NHH OOH HOH OO OO NOOH
OOH OO OO OO OO OO OO OO OO OO OO NO OO HOOH
OO OO OO OO HO HO OO OO OO OO OO OO OO OOOH
OO HO NO OO OO OO OO OO OO OO OO OO OO OOOH
OO OO OOH OOH OOH OOH OOH OOH OOH OOH OOH OOH NOH OOOH
OOH NOH OOH OOH OOH OOH OOH OO OO OO OO OO OO OOOH

«mmmeZH

Hfiazzm H 0mm >02 BOO mmm and ADO ZDO Nd: mmd MOS mmm ZOO mdmw

 

 

Aooa u OmIOmOH .mHmam wqmazozv
OOOH I OOOH .muHmm amomxm aqmoz mw4mm>< may mo mmuHozH “mon

OH.m mqmdfi

 

IllIIHlfll“LilliIIIHullllHHIUILHflIllfltLfllizlifllllll\‘

93 O3