Facing income uncertainty,
durian farmers turning to
palm oil and rubber

Will palm oil and rubber prices continue to make these crops more attractive than fruit? Or will everything return to normal after a commodities price bubble bursts sometime in the near future? No one really knows, but the government is trying to stabilise the situation, just to be safe, taking steps to stem the flow of farmers from growing fruit to palm oil and rubber.

The problems for fruit farmers have to do with economics and the weather. Since domestic demand for fruit does not change much from year to year, the supply of fruit determines the price of fruit. The supply of fruit depends on the weather and the weather is uncertain from year to year.

The climate this year has been relatively good so there is an oversupply of fruit. You would think that an oversupply was a good thing but it isn't always good for farmers. The oversupply has resulted in low prices and low prices mean a low income for farmers. Low-priced fruit from China under the China-Thailand Free Trade Agreement (FTA) is another factor pulling the price of some fruit down even further.

Protests with farmers dumping fruit on the street to express their anger over low prices and their unstable incomes have always been a common occurrence in Thailand. This is a growing problem in fruit-growing provinces like Chanthaburi in eastern Thailand near the Cambodian border where tropical fruits such as rambutan, durian, mangosteen and longkong are grown.

Facing an uncertain income from growing fruit, increasing numbers of fruit farmers are turning to more certain crops. Rubber and palm oil do not face a problem of oversupply since they are sold on international biofuel crop markets. High prices for palm oil are driven by high prices in the oil market. The natural rubber from rubber trees has a steady demand from the latex market and the market for rubber sheets where prices have risen substantially over the last five years.

Seminars are a typical way that farmers find out about the profit potential of palm oil with an attractive profit of about 200% of costs. Rubber has a slightly lower profit margin roughly 100% of costs but is less demanding of water and care, and therefore less costly to raise.

Lada Hianchasri is facing the typical problems that farmers face nowadays. She is a mass-communication graduate from a Bangkok university who took up farming on a full-time basis after graduation. She has a 200-rai plantation in Tha Mai in Chanthaburi and planted about 4,000 rubber trees three years ago after attending a seminar. After a successful trial run, Ms Lada put in another 20,000 rubber trees and soon may even cut all her durian trees and only grow rubber trees.

The Commerce Ministry is trying to help. The ministry will meet with companies to encourage them to export more fruit. A major Thai fruit promotion campaign is planned for the upcoming Olympics (read recent article). Large retailers are also being encouraged to sell a lot more fruit domestically, 300 tonnes per day. These government measures may or may not work. Huge international markets and "mother nature" herself are difficult foes to overcome.

(Source: Bangkok Post, business, page B10, WALAILAK KEERATIPIPATPONG, temp-link)

Vocabulary:

rushing - acting quickly to do something กุลีกุจอ รีบร้อน

commodities - goods with each unit of the good being the same (for example, gasoline, rubber) สินค้า

a price bubble - when the price of something increase to very high levels, and then one day suddenly decreases to low levels ราคาสินค้าที่ขึ้นและลงอย่างรวดเร็ว

the bubble bursts - when prices suddenly decrease ฟองสบู่แตก หมายถึง ราคาสินค้าตกลงอย่างรวดเร็ว

stabilise the situation - control the situation (so people know what is going on and it is manageable) ประคองสถานการณ์ไว้

taking steps to stem the flow of farmers - taking actions so that farmers do not move so quickly from one crop to another หามาตรการป้องกันการเปลี่ยนไปปลูกพืชน้ำมันมากจนเกินไป

uncertain - cannot really know exactly what will happen in the future ไม่แน่นอน

relatively good - good but not very good, definitely not bad ค่อนข้างดี

Free Trade Agreement (FTA) - an agreement between two countries to lower tariffs (import taxes) and increase trade between the two countries ข้อตกลงการค้าเสรีระหว่างประเทศสองประเทศ 

a factor - one of the things that has an effect on a situation or event ปัจจัยกำหนด

unstable incomes - income that goes up and down a lot from year to year, cannot be predicted or controlled รายได้ไม่แน่นอน

a common occurrence - happens often, normal เกิดขึ้นเป็นประจำ เป็นเรื่องปกติ

biofuel crop - an agricultural crop like sugar, tapioca, and palm oil that can be mixed with gasoline, used as a (hopefully) cheaper substitute for gasoline พืชที่ปลูกเพื่อนำมาใช้ผลิตน้ำมันไบโอ (เบนซินและดีเซล)

driven by - caused by เป็นผลมาจา่ก สืบเนื่องมาจาก

risen substantially - increased a lot เพิ่มขึ้นมาก

profit potential - the possibility of making a profit from the business แนวโน้มที่จะทำกำไร

profit margin - profit expressed as a percentage, usually of revenues (but here of costs) ส่วนที่เป็นกำไร เมื่อคิดจากรายรับ

took up - start doing regularly (for example, take up skiiing, take up tennis, take up fish farming) เริ่มทำ

on a full-time basis - do it as your main job or business, that uses up all your time  เต็มเวลา

a trial run - a test run, an experiment to see if it works or not ระยะเวลาทดลอง

mother nature - a common and cute way of saying "nature" (pretending that she is your mother), a popular advertisement in the US many years ago had a famous line: "You can't fool mother nature."  ธรรมชาติ

foes - enemies, people who are against you, fighting you ศัตรู

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