Analysis of Thailand's Rice Market and Production Efficiency

Abstract

Rice is the main product of agriculture in Thailand. Besides, rice production relates to the Thai standard of living because most of Thai workers are farmers. In this thesis, we study Thailand's rice market and production efficiency which consists of three motivations. The first one is to study the Thai rice export market by focusing on the factors that influence the demand and supply of Thai rice exports. Furthermore, we consider the social welfare resulting from Thai rice exports with the copula-based simultaneous ECM approach. The results indicate that the aggregated GDP of importing countries has a positive impact on Thai rice exports. Meanwhile, Thai rice exports expected price and the Thai exchange rate have negative effects on Thai rice exports. The interesting finding of this paper is that most welfare benefits of rice trade have belonged to importing countries. The second motivation is to measure the technical efficiency of Thailand’s rice production by employing SFM based on the copula model. The empirical outcomes show that there is a positive and significant effect on rice production created by land labor and fertilizer. Moreover, the northern region has the largest average TE score. Another interesting issue focuses on the biggest difference between the lowest and highest TE scores for each region. The largest gap of TE score belongs to the central region. The difference of TE in each province is a key point to further investigate the factors of these differences. The province with the lowest TE score should be the first priority to be emphasized on urgent development. The third motivation is to analyze the factors that affect the inefficiency of Thai rice production, we apply the efficiency effects with a copula-based spatial panel SFM model. Only land variable and labor variable have a positive and significant impact on rice output. The interesting point is that although the highest TE scores belong to the central region, the difference between the lowest score and the highest score also belongs to the central region