Short-term Subsidy Programs, Policy Dependency and Policy Inequality: Evidence from Field Research on Northeastern and Central Rice Growers

Abstract

     This paper examines how the government’s subsidy programs affect the productivity process in rural Thailand. The researchers argue that the programs result in policy dependency in that the producers have to rely heavily on the government’s subsidy programs in every stage of their production process. We also argue that the programs cause policy inequality in that rich farmers are more likely to access the government’s programs than their poor counterparts. Examining the effect on rice growers in Northeastern provinces of the 2012 rice pledging schemes for the first season, we find that the farmers are heavily dependent on the government’s subsidy programs in terms of the selection of rice type and investment in cultivation. We also find that the poor farmers, having less production, are less likely to access the rice pledging programs. Therefore, the government’s programs make the farmers less self-reliant, and these programs discriminate against poor farmers. The researchers propose that the government should revise its farmer assistance programs by adjusting them into various types of programs so that every group of farmers is able to benefit from the government’s programs.