Let’s talk about debt, baby

Like many small-scale farmers around the developing world, most farmers in Thailand live their life on a knife edge. A failed crop can have drastic consequences that often plunges families into a cyclone of debt that spins them around like a rag doll and spits them out once it has beaten the life out of them.


Debt issues in the countryside weren’t a secret to us before we came here. But when you hear some of the stories from just the local village many people are being held prisoner on their own land, and will continue to pay of relatively small debts for pretty much the rest of their life. And that’s to the legit organisations like banks and authorised money lenders. Below that there are loan sharks, who can be much scarier.



To illustrate this take my brother-in-law and his wife. They own some land and grow rice – mainly for the family – casava and sugar cane. Prices for casava and sugar cane fluctuate, and your fate is in the hands of local dealers. Also, with these crops you rely on a periodical pay day.


Looking for another source of income they found catching and drying fish and selling the packs around the local area could provide a regular steady income. But to do this they needed transport, and a motorbike wasn’t going to do the job.


They found a car and secured a loan, but they needed to put their land up as a guarantee. A risky decision but it was the only option.


After a few months of building up a good-sized customer base, disaster struck. An accident put the car out of action, stopping the new blossoming business in its tracks, and more credit needed to get repairs done. All while still having to pay regular payments on the car.


Fast forward three years to now and the repairs are still being paid off, and only interest on the car loan is being covered. Although the dried fish business continues to do well and they earned a good price for a recent casava crop, the debt continues. And there is no end in sight.


As it stands now the debt is pretty much where it started, so if just one crop fails to produce over the next few years any gains made are lost. It’s a burden that plays on the minds of many Thai farmers, and the suicide rate in Thailand is alarming. The kingdom has the highest suicide rate in Southeast Asia, at 14.4 per 100,000 people, according to the World Health Organization, and covid-related issues have only compounded the ongoing issue of borrowing money.


The most frightening aspect of this is that most loans are for relatively small amounts of money, from a western perspective. The brother-in-law borrowed around £5,000 but has to put land worth multiple times that as collateral. Sometimes friends or neighbours ask you to become a guarantor, and this is fraught with risk.


This story made the news this week of one such incident. One man and his family have offered to sell their eyes and kidneys to prevent their land from being sold under them. They will have the support of their local community, and many similar communities around Thailand. But nothing will change until the government, and the banks and money lenders, begin to see farmers as an investment worth supporting.


Agriculture accounts for around 6% of GDP and involves almost one third of the total labour force. Thailand is a leading global producer of rice ($5.7 billion), rubber ($4.6 billion) and sugar.


Thailand is the world’s largest exporter of tapioca products (casava),and rubber, as well as frozen shrimp, canned tuna, and canned pineapple.


The global rice export market is worth $25.4 billion annually. Thailand is the second-largest exporter with a 22.7% market share.


Thailand is the biggest exporter of natural rubber in the world and has a 33.3% share of a global export market that is worth $13.9 billion annually.


Annual global sugar exports total $23.6 billion. Thailand is the second-largest exporting country with a 12.4% market share.


Farming should be a huge investment area, and in my uneducated view, switch to having more diverse crops. Food mixed with non-food, for example.


More importantly farmers should be supported and not punished with year-long debts that don’t have an end in sight.


Whether this is done through localised micro-financing, debt moratoriums or some other method Thailand’s greatest resource it is fertile land, and, as I am learning, a huge number of people who understand the land and how it works. A critical asset as climate change gathers pace.


We are lucky. Comparatively speaking we are rich in bits of paper. But Thai rural communities and farmers need to be valued more by the government and society, and given help to move out of debt to be able to thrive in the future.

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