The Battle to Win Thailand’s Election Starts in Bruised Farms

(Bloomberg) -- Only a headlamp helps Wanna Graikoom navigate the darkness in southern Thailand as she works through the night with her husband and son harvesting rubber sap from more than 1,000 trees.

After 12 hours of work, the three of them typically end up with 300 baht ($9.5) -- less than the minimum wage for one laborer in Thailand, the world’s largest rubber producer and exporter. The roughly one in 10 Thais who depend on the rubber trade are also suffering after global prices fell 65 percent since 2011, the last time the Southeast Asian nation held a credible vote.

The distress could upend the traditional regional divide when Thailand votes on March 24 in an election restoring democracy after a 2014 coup. Voters in the country’s two main rubber-growing areas -- the south and the northeast -- are looking for fresh ideas, no matter which party comes up with them.

The Battle to Win Thailand’s Election Starts in Bruised Farms

Like the majority of people in the south, Wanna has always voted for the Democrat party, which lost power in 2011 to the Pheu Thai party backed by exiled former Prime Minister Thaksin Shinawatra. But she would consider voting for any party most likely to boost rubber prices and increase her family’s income.

“It’ll be a hard decision,” Wanna said. “There’s barely enough money to survive. We have debts and no savings and I don’t know what we’re going to do if we’re sick or if something happens.”

The Battle to Win Thailand’s Election Starts in Bruised Farms

Similarly, rubber producers in the northeast -- a region that has helped Thaksin and his allies win every election since 2001, only to be ousted by the military or courts -- are also looking around.

“Some of us in this area can’t afford to send kids to school and some have defaulted on their car loans,” said Sa-nga Kunkum, leader of a local rubber-growers’ group in the northeastern province of Loei. “They’ll probably vote for whoever they think can help them the most.”

Price Plunge

Thailand’s low-income earners and farmers make up more than half the country’s electorate. Political parties have long sought to win their votes with guaranteed crop prices, inexpensive loans and cheap health care.

The Battle to Win Thailand’s Election Starts in Bruised Farms

Global rubber prices have plunged in recent years partly due to a burst of planting in Thailand, Indonesia and Vietnam. As these trees matured, a flood of supply hit the market, while demand from China, the world’s largest importer, declined. The value of Thai rubber exports contracted by 24 percent in 2018, compared with the previous year.

Prayuth Chan-Ocha -- who led the 2014 military coup against Thaksin’s sister, Yingluck Shinawatra, and hopes to return as prime minister after the election -- has blamed oversupply and declining prices partly on the exiled leader. Thaksin himself was ousted in a 2006 coup and convicted for corruption in a case he calls politically motivated.

Before Thaksin took power in 2001, Thailand’s rubber production was concentrated in the southern and eastern regions. He then introduced policies to add hundreds of thousands hectares of rubber acreage to his political base in the north and northeast, which is now the second-largest rubber producing region after the south.

Critics said this led to a rapid expansion of rubber acreage, some in areas with unsuitable soil, resulting in oversupply. But proponents said Thaksin created new job opportunities in regions where the potential to grow rubber trees had been dismissed.

The Battle to Win Thailand’s Election Starts in Bruised Farms

So far, many political parties have proposed solutions focused on price support for farmers rather than addressing a lack of demand.

Among major political groups, the Democrat party -- Pheu Thai’s top rival -- has made the most ambitious proposal so far: An income guarantee of 60 baht per kilogram, up from the current price of around 35-40 baht per kilogram.

Skeptical Voters

Thaksin’s Pheu Thai party has pointed to its track record of boosting agricultural prices, including rice subsidies that helped it win the 2011 election. Yet his opponents said that program was rife with corruption, and a negligence case forced Yingluck to flee Thailand in 2017. She has said the case was politically motivated.

“People can see that Pheu Thai takes boosting agricultural prices seriously and that we’ve done it successfully in the past,” Kittiratt Na Ranong, Pheu Thai’s deputy leader and former finance minister, said in an interview. “From my many visits to the south, I can feel that people who’d never voted for Pheu Thai would vote for us this time.”

Pheu Thai and Future Forward, another pro-democracy party, have called for increasing prices with measures to lift domestic consumption through rubber road construction or processing natural rubber locally. Yet those are similar to measures already tried by the military government that have failed to raise domestic prices.

The Battle to Win Thailand’s Election Starts in Bruised Farms

“The government is already doing these things,” said Nakorn Takkavirapat, deputy governor of the state-owned Rubber Authority of Thailand. “We need to restructure the market. Why do we have to sell through traders? Why are the prices being dictated by futures markets? Why do we have to rely so much on exports?”

Many in the industry are also skeptical of the political promises. Manus Boonpat, leader of the Rubber Tappers and Smallholders Association, a local group based in southern Thailand, said that boosting prices in the long-run requires a total restructuring -- getting rid of big companies serving as middle men and establishing a tire-making industry in Thailand.

“Political parties will say anything to get their votes ahead of the election,” he said. “Can they really deliver anything on their promise? I doubt it.”

©2019 Bloomberg L.P.