This is the third in a series of posts which will provide short extracts from my new book on Thailand’s Political Peasants. In the first extract I wrote that “rural Thailand’s new ‘political society’ is energized by a fundamental desire to be productively connected to sources of power.” In the second extract I explained what I mean by “political society” focusing on the productive intersection between the welfare and subsidy programs of the state and the preservation of the peasantry. In the following extract I focus on the core dilemma arising out of this preservation – the relatively low productivity of a large proportion of Thailand’s workforce (pp. 45-46):
As Thailand’s economy has diversified and grown, the contribution of agriculture to GDP has declined. In 1960, agriculture contributed 36 percent of Thailand’s GDP. This share declined steadily over the next three decades and reached a low of only 9 percent in 1993. This declining share has stabilized since then, helped by the sharp blow to manufacturing and services caused by the financial crisis of 1997 and healthy crop prices in recent years. In 2008, agriculture made up 12 percent of Thailand’s GDP, somewhat higher than the average for middle-income countries throughout the world (9 percent) but still much lower than it had been in Thailand in the 1960s and 1970s.
However, the change in the structure of Thailand’s economy has not been fully matched by workforce transformation. Thailand is typical of other countries that make the transition from low-income to middle-income status in having a pronounced lag in the movement of labor out of agriculture and into industry and services. Many rural households have diversified their livelihoods–and this has made an important contribution to increasing rural incomes–but the overall movement out of agriculture has been rather slow. In the early 1960s, agricultural workers made up 83 percent of the labor force while in 2008 their percentage had fallen to 42 percent. This is a significant reduction, but it is considerably less than the reduction in agriculture’s share of GDP and it has occurred from a much higher base. By one account, labor movement out of agriculture has practically ceased since the economic crisis of the late 1990s. There may be a degree of overestimation in agricultural workforce statistics–with many farmers combining on-farm and off-farm labor–but it is clear that with more than one-third of the workforce producing only about one-tenth of Thailand’s total output, labor productivity in agriculture is low in comparison to other sectors. In other words, the main challenge for Thailand’s agriculture–its relatively low labor productivity–arises from the persistence of an agricultural peasantry, not its disappearance.
These two paragraphs sum up what I have been arguing during the past 15 years. However, it looks like this message has not been able to penetrate very far into the society full of conventional (plus recently made) myths on our proud agricultural heritage.
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To see the full picture of Thailand’s workforce transformation you also need to take the change in population into account.
Since the early 60’s Thailand’s population has grown from about 30 million to 70 million today. Although the share of workers in agriculture has declined from ~80% to ~40%, the absolute number is still pretty much the same, approx. 15 million people. The growth of jobs in manufacturing and services has basically only been enough to offset the increasing size of the labor force.
With the population leveling out and with an ageing population, the labor force will remain the same or even shrink. Thus the future should look different than the past, and the transition out of agriculture should become more rapid. All new jobs added in manufacture and services will be jobs taken out of agriculture.
Keeping this in mind, I think it’s possible that the share of agricultural workers will go down to as low as 10% over the next 15 years. This will require ~800,000 new jobs to be created annually. If someone can dig up the number of non-agricultural jobs Thailand has added annually in the past 10 years, it should be possible to see if this is reasonable prediction.
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Thanks Chris, some quick figures from my data (downloaded from World Bank a couple of years ago):
Between 1998 and 2007 the agricultural labour force declined by 1.3 million; the industrial labour force increased by 2.2 million; and the services labour force increased by 3.4 million. So that’s about 5.6 million non-agricultural jobs over 10 years. If there is the same growth in the non-agricultural labour force over the next 10 years and it is all supplied from the agricultural sector (rather than population growth) then the percentage of the labour force in agriculture will decline from 41% to 27%. If the same thing happens for another 10 years after that agriculture would account for 12% of the labour force. So your calculations are not far off. The Democrats just have to be patient!
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The total workforce expanded from about 23 million in 1980 to more than 39 million in 2010, employment in services expanded from 4.3 million to 15.1 million, with a more modest increase from 2.3 million to 7.1 million in industry over the same period. Agriculture went from just over 16 million to 16.8 million (NSO).
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While NSO’s data are useful/informative, we have to be careful when using them. Like Andrew has pointed out in one of his earlier posts, often a significant part of a Thai farmer’s/peasant’s income come from off-farm or non-farm activities. NSO has at least a few regular surveys (LFS & SES) that touch upon these figures. I think the 40% figure come from the usual definition of farmer (which include ones who work not so many hours on farm but spend more time on farm than on other economic activities). More than a decade ago, when almost 50% of the labor force was categorized as “farmers”, I processed a few surveys using a definition of farmer as one whose main income was drawn from farm/agricultural activities, the percentage of farmers was down to less than 30%. I believe that now the percentage of farmers under the definition I used would be even less than that.
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IIRC, agricultural productivity of the true peasant household, i.e., one not producing for the market but soley for household/family, is higher than that of the semi-peasant mentioned above.
This latter, though, reduces the reproduction cost of labor to capital hence assists the mass and rate of capital accumulation relative to conditions otherwise.
Wages are reduced by the semi-peasants’ -relative- self-sufficiency and, yes, this can induce greater contradiction between production and sales……….
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