Labor Productivity in Thailand Rice Farming: A Typical Farm Approach

Somporn Isvilanonda and Piyatat Pananurak

Knowledge Network Institute of Thailand

South East Asian agri benchmark Rice Network Workshop at the Liberty Central Hotel - Hồ Chí Minh/Vietnam

December 9-12, 2013

OUTLINE

2. Trends in Rice Labor Force and Aging Farmers

1. Development in Rice Cropping Intensity and Productivity Improvement

4. Concepts in Measuring Rice Labor Productivity

5. Conclusion and Suggestions

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3. Driving Force Toward Farm Mechanization Adoption and Progress in Machinery Using

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From 1967 to 2012, rice production increased nearly 4 times. The contribution to this improvement was a result of a widen MVs adoption and rice cropping intensification, mostly in irrigated areas.

Planted area(million ha) Production(million ton) Ave.Yield Year wet

season dry

season total wet

season dry

season Total (kg/ha)

1967 7.43 0.04 7.47 13.73 .06 13.79 1.85 1987 9.27 0.58 9.85 16.27 2.77 19.04 1.93 2012 10.40 2.88 13.28 25.87 12.22 38.09 2.87

Source: Calculated from OAE (Office of Agricultural Economics) data

In 2012, total rice production was 38 million ton. About 40% was produced from irrigated area.

1. Development in Rice Cropping Intensity and Productivity

Average rice yield in Thailand is relatively low or 2.87 t/ha/annum 3

2. Trends in Rice Labor Force and Aging Farmers(1)

In Thailand, the share of rice labor force alone has significantly declined from 47.5% to 27.1% during the past three decades.

Year Total Labor force Ag. Labor force Rice labor force

(million p.) (million p.) (%) (million p.) (% ) 1973-1977 22.80 15.28 67.0 10.83 47.5 2003-2007 36.29 15.29 42.1 9.83 27.1

Source: Calculated from OAE (Office of Agricultural Economics) data

An essential driving force was from an increasing importance of industrial and service sectors. A continuous high growth rate in non-farm sector for more than the past few decades has essentially created farm labor out-migration to cities and urban areas.

2.1 Declining Trend in Rice Labor Force

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Year Country Central region Northeast region Age of Household Head (years)

1988 49.7 55.3 44.2 2009 62.5 62.2 62.8

Size of HH 1988 5.0 4.9 5.1

2009 4.3 3.8 4.8

Source: Ananchanok S. (2012)

2.2 Aging Farmers and Shrinking Farm HH Size

In the past two decades, farm household has the age of HH head increasing significantly from 50 to 63 years.

But, the HH size significantly declined from 5.0 to 4.3 person.

2. Trend in Rice Labor Force and Aging farmers(2)

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Need shorten time for preparation of planted areas and harvesting for increasing rice crop intensification.

3. Driving Force Toward Farm Mechanization Adoption and Progress in Machinery Using(1)

Improvements in farm profit in irrigated areas. Rising farm wage rate. Rural farm wage rate rose 4 times(in nominal value) in the past few decades.

Period Wage Rate

(baht/day) (US$/day) 1990-94 1/ 67 2.16

1995-99 1/ 76 2.45

2000-04 2/ 128 4.13

2008-12 3/ 250 8.13 Note: 1/ from center for applied economic research, Kasetsart University; 2/ Labor force survey; 3/ KNIT farm interview

Need to reduce labor use in rice cropping activities

3.1 Factors Contributing to Mechanization Adoption

Power tillers were firstly adopted to replace for draft animal labor in around late 1970s in preparation of paddy field, including water pump.

Uses of power tiller and combine harvester by smallholders are commonly found in rice production regions.

Threshing machine and combined harvesters were later adopted around early 1990 as a result of hired labor shortage during harvesting season.

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Expansion of medium term farm credit by BAAC played significant role in accelerating the machine using.

3.3 Access to Machinery in Farming Operation

Nearly 71% of the HH owned power tiller since the price is not expensive . A price of 8-10 HW of power tiller is around 2,000 US$.

Year Power tiller 4-whele tractor Water pump with engine

Combined harvester

1,000 machine

1991 1/ 854.28 65.01 na na

1995 1/ 1,515.69 148.84 na 2.50

1998 2/ 1,967.08 142.84 1,267.67 6.08

2003 2/ 2,091.45 204.54 1,008.12 24.85

2008 2/ 2,644.98 287.23 1,430.98 41.14

Note: 1/ TRF (1998) “Opportunity and Option of Machinery Industry Under Free Trade Policy” 2/Office of Industrial Economic (2011) “Agricultural Machinery, inistry of Industry

For combined harvester and tractor, contractors provided services for plowing and harvesting at a relatively cheaper cost than using the labor. A harvesting service cost is about 111 US$ per ha.

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3. Driving Force Toward Farm Mechanization Adoption and Progress in Machinery Using(2)

Source: TDRI (2013)

4. Concepts in Measuring Rice Labor Productivity(1)

4.1 A General Approach

Labor productivity is measured by using production divided by rice labor force.

Year Average Production (million ton)

Average Rice labor force

(head)

Average Labor productivity (ton/head)

1986-90 16.58 11,05 1.51 1991-95 17.44 10.92 1.61 1996-00 18.81 8.86 2.13 2001-05 22.66 9.89 2.30 2006-10 23.61 9.84 2.40

Labor productivity in rice farming seemed to increase over the past few decades..

For first rice crop, labor productivity rose from 1.51 ton per head during 1986-90 to 2.40 ton per head during 2006-10.

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Year Average Production (million ton)

Average Rice labor force

(head)

Average Labor productivity (ton/head)

1986-90 2,530,450 519,395 4.84 1991-95 2,540,351 548,065 4.64 1996-00 4,623,841 839,660 5.51 2001-05 6,065,086 1,097,844 5.53 2006-10 7,924,769 1,231,176 6.45

4. Concepts in Measuring Rice Labor Productivity (2)

For second rice crop, labor productivity increased from 4.84 ton per head during 1986-90 to 6.45 ton per head during 2006-10.

Source: TDRI (2013)

4.1 A general Approach (continued)

Labor productivity in second rice crop was larger than that in first rice crop.

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Typical Farm Characteristics of Second Rice crop in Irrigated Area

Items/activities Irrigated Area Typical Farm

Farm size (ha) 4.32

soil Loamy soil

Yield(ton/ha) 5.6

Varieties RD 47 and Pathum Thani 1

Production system Pre-germinated direct seeding

Water resource Gravitation system

Land preparation 1st plowing with owned small tractor second plowing with owned power tiller

Seed Buy seed

Fertilizer input Using compounded fertilizer

30 days after broadcasting:46-0-0 and 16-20-0

65 days after broadcasting:16-20-0

Harvesting Hiring combined harvester

BAAC membership Yes Source: From survey

4. Concepts in Measuring Rice Labor Productivity (3) 4.2 Typical Farm Approach (continued)

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activities Irrigated second rice production crop year 2012/13 Month Dry S.

Tillage Hired Labor with Machine beg 05

Plowing Family Labors with Tractor two wheels beg 05

Seeding RD 47 and Pathum Thani 1, 174 kg/ha mid 05

Herbicide#1 Hired Labor mid 05

Herbicide#2 Family Labor end 05

Irrigation Family Labors with Water Pump 05-06

Insecticide + Fungicide#1 Hired Labor mid 06

Fertilizer#1 Hired Labor / 46-0-0 and 16-20-0 / N = 29.4 kg/ha, P = 19kg/ha (avg. for #1 and #2) mid 06

Fertilizer#2 Hired Labor / 16-20-0 beg 07

Insecticide + Fungicide#2 Family Labor mid 07

Insecticide + Fungicide + Hormone#3 Family Labor mid 08

Weeding Hired Labor mid 08

Harvesting +Transportation Hired Labor with Machine end 08

4. Concepts in Measuring Rice Labor Productivity (4) 4.2 Typical Farm Approach (continued)

Production system of second rice crop in irrigated Area

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Labor use of typical farm of second rice crop in irrigated area Item Family Labor of 4.32 ha farm Hired Labor Total Labor

No. Day Hr/day Total (Hr) No. Day Hr/day Total (Hr) (Hr)

Tillage 1 1 8 8 - - - - 8

Plowing 2 2 8 32 - - - - 32

Seeding 2 1 3 6 5 1 3 15 21

Herbicide#1 - - - - 5 1 2 10 10

Herbicide#2 4 1 2 8 - - - - 8

Irrigation 1 12 1 12 - - - - 12

Insecticide#1 - - - - 5 1 2 10 10

Fertilizer#1 - - - - 4 1 3 12 12

Fertilizer#2 - - - - 4 1 3 12 12

Insecticide#2 4 1 2 8 - - - - 8

Insecticide#3 4 1 2 8 - - - - 8

Weeding 1 1 1 1 8 1 8 64 65

Harvesting & Transport

2 1 10 20 2 1 10 20 40

Total (Hr) - - - 103 143 246

Total Labor(MD) 12.88 17.87 30.75 Source: From survey in September 2013

4. Concepts in Measuring Rice Labor Productivity (4) 4.2 Typical Farm Approach (Continued)

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Machinery use of typical farm of second rice crop in irrigated area Item Machine Use of 4.32 ha farm

No. Day Hr/day Total (Hr)

Tillage 2 1 8 16

Plowing - - - -

Seeding - - - -

Herbicide#1 - - - -

Herbicide#2 - - - -

Irrigation 1 10 4 40

Insecticide#1 - - - -

Fertilizer#1 - - - -

Fertilizer#2 - - - -

Insecticide#2 - - - -

Insecticide#3 - - - -

Weeding - - - -

Harvesting & Transport 1 1 10 10

Source: From survey in September 2013

4. Concepts in Measuring Rice Labor Productivity (5) 4.2 Typical Farm Approach (Continued)

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Item unit 2st rice

acreage ha 4.32 yield t/ha 5.79

Labor Use MD/ha 7.12

Harvester Use Hr/ha 2.32

Labor and harvester Productivity Measurement

Labor productivity Ton/labor day 0.78

Harvester Productivity Ton/hr 2.50

Source: calculated from field survey

Farm and labor productivity of second rice crop

It is found a disparity between using a broader concept and a farm record concept to measuring labor productivity in rice farming. A development of measuring technique for measuring labor productivity is necessary.

4. Concepts in Measuring Rice Labor Productivity (6) 4.2 Typical Farm Approach (Continued)

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5. Conclusion and Suggestions (1)

Labor productivity in rice farming seemed to improve due to a substitution of machinery to labor in farming activities.

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Small farm holds could access to relatively high cost of machinery use through contractor services at a reasonable rate.

It is indicated that ,by using a typical farm approach, a labor day in rice farming could produce 0.78 ton of rice.

For using combined harvester, its machine hour could produce 2.5 ton of rice.

A large disparity was also found between using a general concept and a typical farm concept in measuring labor productivity.

5. Conclusion and Suggestions (2)

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For improving labor productivity, it is suggested that:

3. Land consolidation might be considered as an another option for providing advantage of mechanization using.

1. Enhancing farm management skill for farmers, particularly younger family members, are necessary.

2. Labor saving technology investment and development as well as yield improvement technology are important, particularly for seedling, weeding and harvesting activities.

Thank you

Q&A