As rice turns yellow, debt is growing on flooded fields

KHON KAEN – The recent floods in the Northeast may not affect the country’s overall economy but it has hit the region’s small-scale rice farmers hard. Saddled with high household debt, farmers are struggling to cope with the destruction of an estimated one million rai, almost three percent of the region’s rice paddies.

More than 60 percent of the country’s 56 million rai (about 22.4 million acres) of rice paddies are located in the Northeast.

In late July, storm Sonca brought heavy rains to the Northeast, leading to floods that killed 29 people and causing an estimated ten billion baht (about $300 million) of damage.

In early August, flooding remained in nine northeastern provinces, affecting over 700,000 people, according to the Department of Disaster Prevention and Mitigation of the Ministry of Interior.

Despite its devastating effects in the region, Finance Minister Apisak Tantivorawong believes the floods won’t have a significant impact on the economy. The Thai Rice Exporters Association predicts that Thailand’s rice production and exports are likely to remain stable.

For many rural households in the rice-growing region, though, the economic outlook this year is bleak.

In Nakhon Phanom Province’s Na Kae District, some 75,000 rai (about 29,500 acres) of rice farmland was damaged by the recent floods.

Standing water, slow drainage

“This year all my fields were flooded; not a single rice plant survived,” says Buapha Tornorkam, a rice farmer from Na Kae District in Nakhon Phanom Province. “In 60 years, I’ve never seen floods this bad.”

Farmers in the Northeast are no strangers to flooding during the rainy season but this year rice paddies remained submerged for more than ten days in several provinces, often killing most of the crop.

“There’ve always been floods here but the rice usually survives because the water doesn’t rise too high, and drains after some days,” says Ms. Buapha.

Governor of Nakhon Phanom Province Somchai Witdamrong explained on 31 July, that several floodgates in the province were blocked slowing down the drainage of floodwaters from the fields into the Mekong River.

Household income drowned

Over 3,000 households were submerged by floodwaters in Nakhon Phanom and officials declared five districts disaster zones. Ms. Buapha’s district is one of the worst hit with some 75,000 rai (about 29,500 acres) of farmland damaged.

The 60-year-old farmer and her husband own 25 rai of rice land. Like most northeastern rice farmers who rarely have access to irrigation and depend on rainfall, the family can only grow one annual crop.

In the irrigated Central region, many farmers are able grow multiple crops per year but in the Northeast, Ms. Buapha’s family has to bank on the yields of a single growing season.

Like her neighbors, she divides the annual harvest into three parts: One third is kept to feed the family and provides some of the rice seeds for the next season. The remaining two thirds of rice, she sells to a local rice miller.

As the floodwaters turned the leaves of the young rice plants in Ms. Buapha’s fields to an unhealthy yellow, the family is left without its main source of income.

Debt grows in flooded fields

This season, Ms. Buapha invested about 23,000 baht to buy additional rice seeds and fertilizer, and hire workers to plough her fields. She also borrowed additional fertilizer worth 3,360 baht from a village fund supported by the Bank for Agriculture and Agricultural Cooperatives (BAAC).

Ms. Buapha budgeted the profit from selling her harvest to pay off the debt with the BAAC. But instead she might now be forced to ask for a suspension from the bank and borrow more money to pay for her daily expenses.

Wet Wongwiwong, a 53-year-old rice farmer from the same district, expected to make an income of 30,000 – 50,000 baht from selling off a portion of his harvest. But he lost all his rice crop to the floods, wasting an initial investment of 30,000 baht.

“This year, I will probably have to ask my children to send me money so I can buy rice to eat,” Mr. Wet says.

Thongdi Sa-ad, a 50-year-old rice farmer from That Noi District in Ubon Ratchathani Province, lost all of her rice crop to the floods.

In Ubon Ratchathani Province rice farmers are facing similar challenges in the aftermath of the floods that saw water rise to up to two meters in some districts in late July.

Thongdi Sa-ad, a rice farmer from That Noi District, lost 15,000 baht of investment when her 12 rai of rice paddies drowned in floodwaters. The 50-year-old expected a return of 40,000 – 60,000 baht from her rice farming this year.

Ms. Thongdi told The Isaan Record that without the income from her rice fields, she worries about how to pay back a 20,000 baht loan to the BAAC. These short-term loans can be taken out from the BAAC before the rice-growing season and must be paid back with interest after the harvest. The family now depends on the income of her husband who works as a taxi driver.

In recent years, household debt in Thailand has spiraled. In December 2016, the ratio of household debt to gross domestic product (GDP) stood at 79.8 percent, according to CEIC Data. The rate fell from 81.2 percent a year earlier but it remains among the highest in Southeast Asia.

Support for flood victims

On 8 August, Thailand’s military government approved a relief program for farmers hit by the floods worth 1.68 billion baht (about $48 million). Under the measure, 3,000 baht will be paid out to each of about 560,000 affected households across the country.

But rice farmers in Nakhon Phanom and Ubon Ratchathani provinces say this one-time payment is hardly enough to cover the costs to repair their damaged houses or make up for the loss of expected income from rice farming.

Thinking ahead of next year’s rice growing season, Ms. Thongdi is concerned that her family won’t have enough money to purchase rice seeds. She calls on the government to step up its flood relief efforts to support rice farmers in the region.

“Above all I want the government to help us by giving out Jasmine rice seeds so we can grow them next year,” Ms. Thongdi says.

Reporting by Watannu Suriyan and Phecharat Philarat. They are participants of The Isaan Journalism Network Project 2017 organized by The Isaan Record.