SIDELINES: Farmers left behind in the dust again

BANGKOK -- There was disturbing news on Friday that the Council of Economic Ministers will discuss on Tuesday a rescue package for the construction and real estate sector which remains in a deep slump due to over-supply and low demand.

Not only that, the economic turmoil has caused an unmistakably assets price collapse. Real estate assets are no longer sure-fire collateral for anyone who wants to obtain bank loans. Land title deeds are filling the vaults of banks and their value are depressingly declining.

Not that the sector should be neglected. After all, the real estate business was the mother of all economic bubbles when Thailand enjoyed a twin boom in the stock and property markets before the heavens of the new rich caved in a few years ago.

With a sharp reversal of fortune, big-time real estate developers who had been much revered as men with the Midas touch, have become the mother of all non-performing loans with reported defaults in foreign borrowings. The virtual collapses of a few of them can actually drag small or medium-sized companies down with them.

The rescue would involve state-owned banks, which are still solvent, to stimulate public demand for housing and lighten up the glut in the market. Certainly, demand is there if consumers think that what they are offered is fair and not at over-inflated prices.

The point here is that the government could attract more criticism from other economic sectors. The assistance for the real estate business is seen as a means to help bankers recover from the financial meltdown and speed up an economic turnaround.

That will unfortunately cost the government dearly in terms of political consequences. It has been receiving a widespread bashing from the rural farm sector and the real sector for giving little attention to their hardship. Their problems are mainly tight liquidity and credit crunch.

The bankers' problems are that they have too much money and bad debts, and are not in the mood to extend any more loans for fear that the NPLs would rise further.

What are the headlines these days about the domestic economic situation? The sugarcane planters and millers will get a helping hand from the government to iron out their differences in the supplementary and final prices of sugarcane. A potential trouble has been defused.

There are reports about an increasing severity of the drought. It has been predicted as one of the worst ever in recent years, certainly an unexpected change from just a few months ago when there were worries that Bangkok could face serious flooding.

What has the government done to possibly alleviate what is to become a real crisis in the rural sector, and relieve the hardship of the poor farmers? Not much of substance, or something encouraging to assure the farmers that they would not be left out to face the harsh adversity alone.

What the farmers have been hearing from government officials were all unpleasant messages and dire warnings -- that they should refrain from planting the second crop of paddy because there would not be enough water supply from the dams, and that water remaining in the reservoirs would be conserved for household consumption so that there would not be shortages during the dry season.

Of course nothing can be done to increase water supply to the rain-fed dams in the North. The farmers might still want to take risks to either try the second paddy cropping or highland crops because they have not got anything better to do. More likely is their perception that they have been accustomed to risks and disregard from the central government throughout their lifetime. Another failure would not matter.

But this does matter a lot for the embattled Democrat-led coalition government which will continue to hear more hue and cry about the rich being propped up at the expenses of the poor. The government has managed to brush aside this accusation when it worked out a costly rescue package for financial and banking institutions because they are the pillar of the national economy. It is going to be tougher this time to find receptive ears.

One could ask: after the help to the construction and real estate sector, now what? When will such a relief be provided to the poor farm sector? Would there ever be a debt restructuring for the dead beat farmers and their corroded backbone of the national economy?

A senior US commerce official was in Bangkok about two months ago. During a press conference, while he gave dutiful lip service about the Thai economy being on the right track under the IMF rescue package, he expressed concern over a possibility that Thailand would shift its development direction from the industrial sector to the farm sector.

Why should the official be concerned about talk about our revival of the farm sector? It competes with US farm exports, that's why. That's enough as a clear signal. If what the US says is bad for Thailand, then we can probably and rightly assume that it's really good for this country, and we should spare no efforts to go our own way to survive whatever problems through sufficient food supplies.

After all, food will be the necessity in decades from now as the world population is rising steadily. It could be too late to boost production by that time if we do not do something to the agricultural sector now.

Directly or otherwise, the farm sector is bearing the burden of propping up the finance and banking sector, though the current economic turmoil has never been its own guilt. Now it's time for the government to support another sector which has nothing directly to do with the poor farmers.

The real estate boom was the cause of the mushrooming of golf courses and resorts which affected ecology, natural resources and the environment, not to mention other social ills such as high-powered greed and consumerism.

Those in the farm sector can wait, because they have no other choices than marching to the Government House. But it is obvious that their patience is running out quickly. With the drought threatening their livelihood, the government is a prime target for them to vent their fiercest wrath when the harsh situation becomes intolerable.

The government should not tempt the farmers to do just that when they reach the boiling point. The consequences could be beyond our imagination as well.

BY SOPON ONKGARA

The Nation