• TABLE OF CONTENTS
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 Front Cover
 Title Page
 Introduction
 Overview of the environmental and...
 Fertility classification for Asian...
 Type of risk
 Conclusion






Group Title: Networking paper - Farming Systems Support Project - no. 9
Title: Recognizing structural constraints on implementation of a farming systems approach within a national agricultural program
CITATION PAGE IMAGE ZOOMABLE PAGE TEXT
Full Citation
STANDARD VIEW MARC VIEW
Permanent Link: http://ufdc.ufl.edu/UF00054305/00001
 Material Information
Title: Recognizing structural constraints on implementation of a farming systems approach within a national agricultural program some views from Thailand
Series Title: Networking paper
Physical Description: 10 p. : ; 28 cm.
Language: English
Creator: Infanger, Craig L
Farming Systems Support Project
Publisher: Farming Systems Support Project, International Programs, Institute of Food and Agricultural Sciences, University of Florida
Place of Publication: Gainesville Fla
Publication Date: [1985]
 Subjects
Subject: Agricultural systems -- Research -- Thailand   ( lcsh )
Agricultural extension work -- Research -- Thailand   ( lcsh )
Genre: non-fiction   ( marcgt )
 Notes
Statement of Responsibility: Craig L. Infanger.
Funding: Electronic resources created as part of a prototype UF Institutional Repository and Faculty Papers project by the University of Florida.
 Record Information
Bibliographic ID: UF00054305
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved, Board of Trustees of the University of Florida
Resource Identifier: oclc - 68966288

Table of Contents
    Front Cover
        Front Cover
    Title Page
        Page 1
    Introduction
        Page 2
    Overview of the environmental and economic setting for the nerad project
        Page 2
        The environmental setting for NERAD
            Page 3
    Fertility classification for Asian soils
        Page 4
    Type of risk
        Page 5
        Page 6
        Rice farmer behavior under risk and uncertainty
            Page 7
            Page 8
            Page 9
    Conclusion
        Page 10
Full Text
/6--34-


RECOGNIZING STRUCTURAL CONSTRAINTS ON IMPLEMENTATION
OF A FARMING SYSTEMS APPROACH WITHIN A NATIONAL
AGRICULTURAL PROGRAM: SOME VIEWS FROM THAILAND


Farming Systems Support Projeot


International Programs
Institute of Food and
Agricultural Sciences
University of Florida
Gainesville, Florida 32611


Office of Agriculture and
Office of Multisectoral Development
Bureau for Science and Technology
Agency for International Development
Washington, D.C. 20523


NETWORKING PAPER NO. 9









RECOGNIZING STRUCTURAL CONSTRAINTS ON
IMPLEMENTATION OF A FARMING
SYSTEMS APPROACH WITHIN A
NATIONAL AGRICULTURAL PROGRAM:
SCME VIEWS FROM THAILAND





Craig L. Infanger
Extension Professor
Department of Agricultural Econcmics
500 Agricultural Science Bldg. South
University of Kentucky
College of Agriculture
Lexington, Kentucky 40546-0215


Networking Papers are intended to inform colleagues about farming
systems research and extension work in progress, and to facilitate the
timely distribution of information of interest to farming systems
practitioners throughout the world. The series is also intended to invite
response from the farming systems network to help advance FSR/E knowledge.
Ccmnents, suggestions and differing points of view are invited by the
author or authors. Names and addresses of the author or authors are given
on the title page of each Networking Paper.

Networking Papers do not necessarily-present the viewpoints or opinions
of the FSSP or its affiliates. Readers wishing to submit materials to be
considered for inclusion in the Networking Paper series are encouraged to
send typewritten, single-spaced manuscript, ready for publication. The
FSSP does not edit Networking Papers, but.simply reproduces the author's
work and distributes it to a targeted audience. Distribution is determined
by geography and subject matter considerations to select a sub-group fram
the FSSP mailing list to receive each Networking Paper.






The author is Extension Professor and Specialist in Agricultural Econmaics,
University of Kentucky, and formerly Agricultural Econa~ist on the
University of Kentucky Technical Assistance Team, Northeast Rainfed
Agricultural Development Project, Tha Phra, Khon Kaen, Thailand. Views and
opinions expressed here are solely those of the author and do not
necessarily reflect any official or implied position of the University of
Kentucky, the U.S. Agency for International Development, or the Royal Thai
Government.













RECOGNIZING STRUCTURAL CONSTRAINTS ON IMPLEMENTATION OF A FARMING
SYSTEMS APPROACH WITHIN A NATIONAL AGRICULTURAL PROGRAM:
SOME VIEWS FROM THAILAND

Craig L. Infanger

INTRODUCTION

Farming systems research (FSR) projects are now underway on
several continents and under the sponsorship of the U.S. government,
the international research centers, and other donor agencies. Most of
these efforts are pilot projects financed and managed by the donor
entity. The Northeast Rainfed Agricultural Development Project
(NERAD) is a joint U.S.-Thai farming systems project attempting to
implement farming systems approach within the context of a national
agricultural program. Management of NERAD field implementation is the
responsibility of host nationals within line agencies of the Ministry
of Agriculture.

NERAD is jointly sponsored by the Royal Thai Government (RTG) and
the U.S. Agency for International Development (USAID). The purpose of
the project is to develop a replicable agricultural development
program for increasing farm production and income, particularly among
lower income farmers in rainfed areas of the Northeast region of
Thailand. The geographical target areas are nine tambons
(administrative grouping of villages) in four widely separated but
representative changwats (provinces) of the Northeast (see following
figure). The intended direct beneficiaries are 65,000 Thais in 10,000
families living in over 100 villages.

Much of the available farming systems research and extension
(FSR/E) literature focuses on the rapid rural appraisal approach, the
important first step in FSR initiation. NERAD adopted the rapid rural
appraisal technique terming it "RAT" or "rapid appraisal technique".
This proved to be an important and beneficial tool for initiating the
project. However, the purpose of this paper is to look beyond the
rapid rural appraisal to some lessons being learned from the
subsequent implementation of an FSR/E approach within a stable
physical and economic environment. Sobering structural constraints
are being encountered which are impeding project success and
undoubtedly exist for other FSR projects in the world.


OVERVIEW OF THE ENVIRONMENTAL AND ECONOMIC SETTING
FOR THE NERAD PROJECT

Thailand is one of the world's most important food producers.
Agriculture accounts for 22% of gross domestic product and is the
largest single sector in the economy. Not only do Thai farmers feed a
national population of nearly 50 million but also provide food and
commodities exports worth $4 billion annually over the last five













RECOGNIZING STRUCTURAL CONSTRAINTS ON IMPLEMENTATION OF A FARMING
SYSTEMS APPROACH WITHIN A NATIONAL AGRICULTURAL PROGRAM:
SOME VIEWS FROM THAILAND

Craig L. Infanger

INTRODUCTION

Farming systems research (FSR) projects are now underway on
several continents and under the sponsorship of the U.S. government,
the international research centers, and other donor agencies. Most of
these efforts are pilot projects financed and managed by the donor
entity. The Northeast Rainfed Agricultural Development Project
(NERAD) is a joint U.S.-Thai farming systems project attempting to
implement farming systems approach within the context of a national
agricultural program. Management of NERAD field implementation is the
responsibility of host nationals within line agencies of the Ministry
of Agriculture.

NERAD is jointly sponsored by the Royal Thai Government (RTG) and
the U.S. Agency for International Development (USAID). The purpose of
the project is to develop a replicable agricultural development
program for increasing farm production and income, particularly among
lower income farmers in rainfed areas of the Northeast region of
Thailand. The geographical target areas are nine tambons
(administrative grouping of villages) in four widely separated but
representative changwats (provinces) of the Northeast (see following
figure). The intended direct beneficiaries are 65,000 Thais in 10,000
families living in over 100 villages.

Much of the available farming systems research and extension
(FSR/E) literature focuses on the rapid rural appraisal approach, the
important first step in FSR initiation. NERAD adopted the rapid rural
appraisal technique terming it "RAT" or "rapid appraisal technique".
This proved to be an important and beneficial tool for initiating the
project. However, the purpose of this paper is to look beyond the
rapid rural appraisal to some lessons being learned from the
subsequent implementation of an FSR/E approach within a stable
physical and economic environment. Sobering structural constraints
are being encountered which are impeding project success and
undoubtedly exist for other FSR projects in the world.


OVERVIEW OF THE ENVIRONMENTAL AND ECONOMIC SETTING
FOR THE NERAD PROJECT

Thailand is one of the world's most important food producers.
Agriculture accounts for 22% of gross domestic product and is the
largest single sector in the economy. Not only do Thai farmers feed a
national population of nearly 50 million but also provide food and
commodities exports worth $4 billion annually over the last five








years. These agricultural exports generate 60-65% of all foreign
exchange earnings for the Kingdom. In recent years Thailand has
become the leading rice exporter and the fourth or fifth largest food
exporter in the world, achievements that are the envy of all
neighboring countries.

The Northeast region represents about one-third of the Kingdom's
population and land area and 40% of all cultivated land.
Unfortunately the Northeast is also the least productive and poorest
sector of the Thai economy. Crop yields, incomes, and levels-of-
living are all below Thai national averages and a great source of
concern to the RTG. In the Northeast, agriculture is still basically
a subsistence activity, despite the production of large export cash
crops like cassava, kenaf, sugar cane and tobacco. For the majority
of the village population a-subsistence lifestyle means:

*the major agricultural activity is production of
a subsistence food supply built around rainfed rice as the
stable food crop and upland crops (cassava, kenaf, sugar
cane) for cash income;

*the major agricultural resources are land, family
labor, and animal power;

*output per unit land or per unit labor is low by
national and world agricultural standards;

*the farm production system exhibits low land use
intensity, limited diversification, and a near total
dependence on rainfed production systems;

*farm family incomes are the lowest of any region
in the Kingdom, roughly 15,000 baht ($555) annually--about
65% of the Kingdom average;

*adoption of technological improvements in agri-
culture, despite decades of foreign-donor and RTG
intervention, has been slow.


The Environmental Setting for NERAD

The two most salient features of the physical environment facing
Northeastern farmers are the poor soils and the marginally adequate
and erratic rainfall. Farmers in this region till sandy, infertile
soils that are the least fertile soils in Southeast Asia (see
following table)..








FERTILITY CLASSIFICATION FOR ASIAN SOILS


Region
Sri Lanka, wet and intermediate zone
Sri Lanka, dry zone
Bangladesh, Ganges
Bangladesh, Bramaputra
W. Malaysia, Kedah-Perlis
India, Godavari-Krishna
Thailand, south
Thailand, Bangkok plain
Thailand, upper central
Thailand, intermontane
Thailand, Northeastern'plateau


Three Factor Score
-.33
-1.58
1.27
.43
1.48
1.76
-.11
.26
-.30
-.93
-3.26


NOTE: Three Factor Score represents a summation of the
values for statistically significant variables of three
categories: Inherent Potentiality of Soils (IP),
Organic Matter and Nitrogen Status (OM), and Available
Phosphorus Status (AP).

SOURCE: UKy TA Team Quarterly Report #8, Dr. John
Ragland summarizing the work of Kazutake Kyuma,
"Fertility of Paddy Soils in Tropical Asia",
Proceedings of Symposium on Paddy Soil, Science Press,
New York, 1980.


In addition to infertile soils, the other equally important
environmental feature of the regions the seasonal monsoon weather
systems of Southeast Asia. Thailand lies in a monsoon climatic zone
considered "dry". Rainfall alone is not sufficient every year for
reliable wet season rice production except in river floodplains or
deltas. For the Northeast, the seasonal monsoon rains are erratic in
timing and distribution resulting in the potential for drought and
flooding in the same month for virtually all soils and terrain. For
the NERAD changwats, mean annual rainfall varies from 2270 mm. in
Nakon Phanom to a low of 1218 mm. for Chaiyaphum, a changwat
considered to be in the "rainshadow" of a mountain range.

In the absence of irrigation, these levels of annual rainfall are
too low for feasible annual rice production over large areas of the
region. Rice farmers here have historically bunded land for rice
paddies at low, middle, and high positions on the terrain. For the
middle and upper paddies, wet season rice production is a reality in
only 3-6 years of each decade. Periodic water shortages constitute
the main reason for the instability in yield for the wet season rice
crop.


What these soils and rainfall data mean
rainfed farmer is that the physical setting is
and uncertain. Because rainfall is the single
determining rice yields, Northeastern rice


to the Northeastern
inherently risk prone
most important factor
farmers consistently







identify water as their primary problem. Irrigation is a potential
solution for only approximately 10% of the land area in the region.


Economic Setting for NERAD

Northeastern rice farmers operate in an agricultural economy that
is, generally speaking, open and competitive but also characterized by
high levels of risk and uncertainty. The two major sources of
economic risk and uncertainty are price fluctuations and market
collapse. Price changes represent an economic risk to farmers and
affects their behavior. It tends to make them very conservative
decisionmakers. This is especially true for Thailand and other Third
World countries where minimum price programs, which reduce producer
risk and uncertainty considerably, either are not feasible given
national budgets or are ineffective at the farm level.

Another source of economic risk and uncertainty is the
probability that at any given time the market for a commodity may
disappear, i.e. market collapse. In this situation the price may fall
to zero or such low levels that transportation costs would not be paid
if the crop were shipped to another location. This type of risk is
common for local/district vegetable markets that may be saturated at
certain times of the year. The Thai cassava crop also faces this
possibility should the EEC change the preferential tariff structure
now in place.

The breadth of economic risk facing poor Thai farmers can be
displayed in the following table which relates the type of market to
the magnitude of risk:


TYPE OF RISK

PRICE MARKET
FLUCTUATION COLLAPSE EXAMPLES
TYPE OF MARKET

LOCAL High High Vegetables

NATIONAL High Moderate Peanuts,
Mungbeans

INTERNATIONAL Moderate Low Rice, Kenaf
Cassava


Specialization in crops with an international or national market
tends to reduce the level of economic risk and uncertainty. Thus, the
very structure of the agricultural economy as well as the biological
capabilities of the land in the Northeast affects farmer's choice of
crops.







A second economic constraint is the agricultural policies,
especially the trade policy, of the Kingdom. Export trade balances
are vitally important to Thailand, therefore, trade policy
historically has been managed to:

(1) earn foreign exchange through agricultural exports (rice
cassava, corn, sugar cane, and tobacco); and

(2) insulate domestic prices of major commodities from world
price fluctuations.

The most obvious example is rice. Since World War II, Thailand's
rice policy has had the twin objectives of earning foreign exchange
and stabilizing internal' rice prices. The net effect has been a
burdensome tax that has been estimated by the World Bank to exceed 75%
of the farmgate price. The historical effect has been to depress
farmgate rice prices and, therefore, economic incentives for the
farmer. Another example of the impact of trade policy can be seen in
the 1984 ban on the export of kenaf fiber, a move designed to moderate
price increases on gunny bags used for exporting rice but having the
effect of stalling the farmgate price increases for raw kenaf fiber at
a level of 10-11 baht/kg.

A third economic obstacle to increased agricultural productivity
in the Northeast is the availability and price of credit. Although
some institutional credit is becoming available, the major sources of
agricultural credit still remain family members and local merchants at
effective interest rates ranging from 20% to over 100%. This raises
the cost of purchased inputs and reduces incentives for purchased
input use. In addition, the use of credit to any significant degree
introduces an additional element of risk into the farming system since
default could mean loss of pledged collateral, in most cases land, and
thereby threaten the subsistence food supply.

What is important to understand is that the economic constraints
directly affect farmer behavior and explain their conservative
approach to crop selection, cultural practices, and input use. The
case of chemical fertilizers for rice illustrates this point. For the
Northeast, common Thai Department of Agriculture recommendations for
chemical fertilizer are 45 Kg/rai. An agricultural input survey of
farmers in NERAD changwats revealed that actual use rates by changwat
varied from approximately 5Kg/rai to about 30 Kg/rai.

Agronomic data indicate that the fertilizer response of rice
grown on the poor Northeastern soils under traditional cultural
practices could be 10:1; 10 kg. of rice for 1kg. of fertilizer. If
the price of paddy is roughly 3 baht/kg. and the fertilizer cash price
of is roughly 6 baht/kg., then the price ratio is 30/6 or 5:1.
Economists consider this is a favorable price ratio and indicates a
strong incentive to increase fertilizer use. Why then is actual use
relatively low? One reason is that structural risk and uncertainty

a






play such an important role in. the price ratio faced by the
subsistence farmer. From harsh experience these rice farmers:

(1) know that rainfed crop yields are highly variable and
therefore they discount expected average yields based on
rainfall probabilities;

(2) know that middle and upper paddy may be transplanted in only
4-6 out of 10 years and therefore further discount expected
average yields;

(3) know that there is virtually no down-side price protection;

(4) cannot pay cash for fertilizer and therefore face a higher
credit price for fertilizer; and

(5) receive "farmgate" prices that are lower than stated prices
due to sytematic discounts for moisture and quality.

The net effect of accounting for structural risk and uncertainty is
that in the farmer's view:

(1) expected yield response is lower than the averages used by
researchers and development workers;

(2) actual prices received are lower; and

(3) credit fertilizer prices much higher, as illustrated here:

YIELD RICE FERTILIZER PRICE
RESPONSE PRICE PRICE RATIO

RESEARCHER ESTIMATE 10:1 3.0 6.0 30/6 or 6:1

FARMER ESTIMATE 5:1 2.5 8.5 12.5/8.5 or 1.5:1


Accounting for risk in fertilizer decisions for rice translates
into an approximate on-farm ratio of 1.5:1, reflecting a very low
incentive to use purchased chemical fertilizer. Thus, existing low
levels of fertilizer use in rice appear more rational when risk and
uncertainty are recognized as effective constraints on farmer
behavior. There is every reason to believe a similar relationship
between risk and farmers' decisions exists for other crops in the
Northeastern farming system. Furthermore, output prices for most of
the other crops--vegetables or upland field crops--are less stable
than for rice thus making the realized price ratio to the farmer more
uncertain.


Rice Farmer Behavior Under Risk and Uncertainty

A systems approach to understanding the Northeastern rice
farmer's decisionmaking, which considers the most important structural
constraints, reveals a model for farmer behavior under high levels of






agronomic and economic risk and uncertainty. Over years of
experience, the subsistence farmer has had a single-minded objective
and has developed a strategy and many tactics for achieving this
objective. The objective is security and survival of the family and
the farm, i.e. a subsistence level-of-living. The farmer seeks to
exploit to the maximum his only two resources, labor and land, given
all the constraints. This objective is rational, very conservative,
but viable in the short run.

The general strategy to achieve the objective of security and
survival is to minimize risk and uncertainty by implementing a low-
input, low-output production scheme that concentrates first on
subsistence food production and secondly on cropping or off-farm
employment for cash income. For the subsistence crop this strategy
means cash inputs are minimized and new inputs used only when some
resource in the strategy becomes constraining. Thus, soil fertility
amendments are undertaken only when rice yields fall below subsistence
levels. Otherwise, the farmer continues to exploit the natural
fertility of the soil. Capital inputs such as the "iron buffalo" are
considered only when labor becomes scarce during peak demand periods.
This- strategy is a rational maximization of the two most important
resources possessed by the subsistence farmer: family labor and land.

Within this general strategy of risk minimization via low-inputs
and low-outputs, a whole host of tactics are pursued to achieve the
overall objective of security, survival, and perhaps, some wealth
accumulation. Examples include choice of rice varieties, on-farm rice
storage, allocation of labor over the cropping season, and minimum
investment in land or capital improvements that cannot be shifted from
one crop to another. The farmer's tactics are easily observed but all
too often they are not seen as rational.

In this model of farmer behavior, the strategy and tactics are a
rational response to a risk-prone environment and represent a
maximization of returns to land and labor. Unfortunately, this model
of the farmer's objective and strategies is not shared by many
agricultural scientists, FSR advocates, or the Ministry officials in
Thailand. Frequently, these people view the Northeastern rice farmer
as poor, backward, inefficient, and resistant to change. One Japanese
agronomist has characterized Northeastern farmers as lacking the
"enthusiasm...temperament, knowledge, and technology to modernize".
During field visits, Ministry of Agriculture economists have described
rainfed rice farmers as "inefficient, unproductive, and not wanting to
maximize profits." Personal field experience leads me to sharply
disagree. Nonetheless, if the Thai farmer is viewed by Ministry
officials and others as poor and backward, then it follows that the
logical governmental response should be development assistance based
on "giving" farmers modern inputs--seeds, vaccines, wells, irrigation
water--and extension education. If on the other hand the farmer is
seen as a rational economic man with a good sense of his own best
interests, then agricultural development assistance should not create
dependency-type assistance programs but concentrate on working within
the farmer's objective and strategy to overcome productivity
constraints, improve the farmer's decisionmaking capacity, and assist
Ministry officials in recognizing and responding to farmer needs.







The environmental and economic structure for the NERAD project,
and probably most other FSR projects, is such that the "window of
opportunities" is relatively small for significant improvements in the
productivity and well-being of poor farmers. Improvements will only
be realized if development efforts concentrate on changes that are
economically viable within the given economy, biologically feasible
under on-farm conditions and farmer management, and socially
acceptable within the current farmer objective and strategy.
Therefore, any proposed improvement or change to the existing farming
system must:

(1) Complement the current strategy and tactics given structural
constraints;

(2) Reduce some element of economic and/or agronomic risk; or

(3) Remove some productivity constraint or some source of risk
and uncertainty.

In this context the spread of cassava in Thailand--now the most
important upland crop--should be viewed as an improvement that is
profitable and complementary to the existing system; adoption of
drought-resistant rice varieties in the Northeast--the only widely
adopted introduced rice technology--should be seen as a risk reduction
improvement; and provision of irrigation or improved water control
can be seen as a reduction in the single most constraining resource.

A report several years ago by the Mekong Committee summarized the
situation in the Northeast this way:

"The traditional bunded field-systems represent a feat
of land reclamation of tremendous magnitude in the lower
Mekong basin. It is estimated that some 50 million
individual bunded fields exist in the basin, all constructed
by traditional means without the benefits of agronomists,
foreign agricultural experts, benefit-cost analyses, and
loans from international assistance agencies.

The rich store of down-to-earth technology for
traditional agriculture efficiently adapted to each micro-
ecological situation should not be underestimated. It is
remarkable how this invaluable knowledge has remained intact
throughout the ages, in spite of historical vicissitudes.
Civilization may come and go, but the efficiency of the
individual subsistence farmer seems to remain untouched.

However, traditional farming systems evolved for
traditional population levels, so their potential for further
expansion is very limited. Swidden agriculture is already
over-extended and bunded agriculture is in many areas at the
limit of maximum productivity. It has been estimated that in
Northeast Thailand 50 per cent of the bunded fields are
marginal rice lands which give unpredictable yields and fail








in many years. (Agriculture in the Lower Mekong Basin,
Committee for Coordination of Investigations of the Lower
Mekong Basin, Feb. 1978).



CONCLUSION

Implementation within national agricultural programs is the real
test of the efficacy of FSR/E in realizing real benefits to the
world's poorest farmers. FSR/E projects and programs within Third
World national agricultural systems will undoubtedly encounter serious
economic and environmental structural constraints and must recognize
these as critical variables. The NERAD experience in Thailand
illustrates that this may result in a relatively narrow "window of
opportunities" possible in the face of recognized environmental and
economic structural constraints.

In addition, the implementation of FSR/E within national
agricultural programs will also encounter institutional constraints,
another equally important structural constraint. The challenge of
innovation within the institutional setting should be approached in
the same manner as the farmer and his situation is approached in FSR/E
methodology:

(1) rapid appraisal of the institutional "system";

(2) identification of critical institutional constraints;

(3) field testing of organizational systems designed to reward
cooperation and reduce rilk,for cooperating scientists and
bureaucrats;

(4) adoption of clear new policies designed to diffuse the FSR/E
approach within the.national program.


It seems evident that FSR will not survive as an agricultural
development alternative unless structural constraints are recognized
and field implementation modified to produce change that is
economically viable, biologically feasible, and socially acceptable.
That is the challenge facing those involved in FSR/E for the remainder
of the 1980s.




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