Thesis Abstract of AGS Students

Anang Gunawan Yahya (1991)

Huai Tadd is one of numerous villages under the supervision of highland development agencies in Northern Thailand. Information gathered from the whole village (66 farm families) was included in the study.

The indigenous crops are upland rice, corn and tea. Fifty two farmers adopted coffee and recently 20 farmers adopted lychee. Most of the farmers practise terracing with perennial crops and contour grass strips with field crop as recommended. Crop cultivation was generally low input based. Working at local tea companies was the major source of income for the small farmers (63 to 91 percent of total income). It becomes less important (20 to 45 percent) as farm size increases.

For further expansion of permanent farming systems, Multi-period Linear Programming is employed to determine optimum plans over 20 year planning horizon which provide maximum net present value of income and efficient resource use under present soil conservation practices and family consumption needs. The planning is made for 18 farm size groups individually under several economic scenarios.

The solutions show that lychee is the dominant crop as suggested by the initial optimum plan and only 2 groups should grow rice baside lychee. Coffee completely replaces lychee when its price rises from 42.00 baht/kg to 60.00 baht/kg. Inversely, when price of lychee is 15.00 baht/kg, lychee becomes the only crop in all plans.

This price sensitivity analysis suggests that relative price of both crops determines the alter-natives. The planning, thus, relies on expected prices. To reduce risk, a combination of both crops may be desirable.

Tea is not recommended unless its price double which is unlikely. However, increasing productivity of coffee and tea is possible and is necessary if both are to compete with lychee.

Wage income accounts for more than 40 percent of total income when off-season labor is fully employed. This is sufficient for perennial crop investment and consumption. Credit is required only when demand for or supply of labor reduces to 60 percent unless interest rate is lower than 12 percent per year. The drops of off-farm employment to 60 percent and 40 percent also allow coffee and rice to enter to some farm plans.

When minimum rice requirement is imposed to satisfy semi-subsistence farmers' need of security, the minimum land area required is kept aside and the remaining is again devoted to lychee or the most profitable perennial crop. Under this situation the small farmers need to work more off-farm than the situation without this requirement.

The important conclusion is that even though off-farm employment is not a prerequisite, it is necessary for feasibility of expanding permanent farming systems in the highlands.

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