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Reviewing Agricultural Trade Policies

To Promote Intra-OIC Agricultural Trade

137

4.5. Thailand

Thailand has moved up from a low-income to an upper-middle income status in less than a

generation, and has been an upper-middle income country since 2011, with a GDP of 455 billion

USD and per capita income of USD 5,960 in 2017, Thailand ranks the 20

th

in GDP (PPP) among a

total of 230 countries. Thailand’s economy reached a growth rate of 3.9 percent in 2017, the

highest since 2012, versus an estimated 3.0 percent of the global economy and 4.3 percent of

emerging markets and developing economies. The high growth in 2017 was realized largely by

a rapid export growth at the rate of 7.5 percent. Inflation in the country is low: At 0.7 percent in

2017, it remained even below the target range of 1-4 percent.

In 2017, agricultural sector in Thailand grew by 6.2 percent, fully recovering from the severe

drought in 2015. This growth helped offset negative effects of the fall in agricultural prices

amounting to 2.7 percent, driven by rubber and oil palm price decline. The production growth

has been especially important in rice paddy (6.5 percent) and sugarcane (16 percent), and

agricultural farm income grew by 3.4 percent during 2017 (WP Thailand, 2018). The growth in

agricultural sector is expected to continue in the future.

Table 4. 46 Share of Agriculture in GDP, Employment and Trade, Thailand

Year

% share in GDP

% share in

employment

% share in

exports

% share in

imports

2008

10.1

42.5

17.1

6.1

2009

9.8

39.0

17.4

6.9

2010

10.5

38.2

17.2

6.4

2011

11.6

41.0

19.9

6.5

2012

11.5

42.1

17.9

6.8

2013

11.3

39.6

17.3

6.6

2014

10.1

33.4

16.9

7.2

2015

9.0

32.3

15.8

7.6

2016

8.5

33.3

15.5

8.3

Source: CEPII BACI, Eurostat RAMON, World Bank, UN Comtrade, UN Trade Statistics, and authors’

calculations

Table 4.46 presents the relative importance of agricultural sector in Thailand for the period of

2008-2016. The share of agriculture in GDP declined from 10.1 percent to 8.5 percent, as the

share of agricultural sector in employment fell from 42.5 percent to 33.3 percent. The share of

agricultural sector in exports reduced slightly from17.1 percent to 15.5 percent, while the share

of agricultural imports increased from 6.1 percent to 8.3 percent in the same period. Despite

falling shares of agriculture, it remained a major source of income for Thai households.

Thailand introduced a 20-Year National Strategy aiming to become a high income country by the

year 2038. Although the strategy entered into force in October 2018, its goals had been taking

shape in the preceding years, as revealed by the increasing shares of manufacturing and service

sectors. Likewise, the fall in the share of agriculture can be viewed as one of the early results of

the envisioned transformation of the Thai economy.

Concerning international trade links, Thailand is a founding member of ASEAN and has strong

trade relations with the member countries. In terms of trade balance, Thailand has a surplus

both in its overall trade and in agriculture. As of 2016, agricultural exports worth 37 billion USD

led to the considerable agricultural trade surplus of 22 billion USD (see Figure 4.49).

A look at the decomposition of agricultural exports by subgroups indicates the following: