Impact of Trade Liberalization on the Agricultural Sector and Adjustment Policy: The Case of Shallot Plantations in Northeastern Thailand

Abstract

     This research examined the impact of the Free Trade Agreement on shallot plantations in Northeast Thailand, the government's adjustment policy, the results of that policy, and ways to improve the policy. The methodology involved collecting research data from 770 households and 44 villages in Sisaket province in Northeastern Thailand using questionnaires for households, structured interviews for village heads, and in-depth interviews of the people in related agencies. The results of the study show that trade liberalization has affected shallot plantations in many ways. The policies for coping with the impacts have not been effective, as reflected in an increase in product quality while production cost have risen, and a decrease in sale price when compared with inflationary conditions. The overall results suggest the strategic recommendation that the government should formulate policies, both general and area-specific, which focus on competition-building under their comparative disadvantage, such as the re-establishment of specific policy-response committees at the provincial level. Moreover, government should also encourage the creation of and support for selfreliance, such as the production by farmers of their own fertilizer and account trading among co-operatives.