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Executive summary

This report presents the characteristics of the Thailand livestock industries classified by type of livestock and examined government policy regarding the livestock sector.

Following a short introduction on the fundamental economic situation in Thailand, the characteristics of beef industry are described in section 2 including cattle and buffalo numbers, distribution and trade. Thailand had an estimated 6.7 million cattle in 1997, an increase of 2.3 million from those in 1984. The greatest proportionate increase occurred in the Northern region, while the slowest growth occurred in the Southern region. The increased mechanization that has occurred in Thai agriculture has resulted in the replacement of buffalo on many farms by tractors and other mechanical implements, this trend is likely to continue. In 1995 the buffalo numbers were 3.7 million, 28 percent below the numbers in 1984. Most of the buffalo are found in the North-east region. Thailand has imported live cattle for use as breeding animals and for fattening from Australia, New Zealand, Myanmar and Costa Rica. Cattle and primarily beef cattle were exported to Laos and Malaysia between 1991 and 1995.

Section 3 covers the history and the problems facing the dairy industry. These relate to high production costs due to high feed prices; low milk production efficiency due to poor management and poor quality animals; the use of low fat powdered milk to produce drinking milk rather than raw milk because of lower costs; and the poor quality of raw milk. Additionally, the high price of land has led to a shortage of forage while employment opportunities away from the farm for the younger generation has led to labour shortages.

Section 4 discusses the development of the broiler and layer industries. The broiler industry is completely integrated with feedmilling companies and mainly produces for export markets. The Thai poultry production system has been a great success. The layer industry began in 1950 at Kasetsart University, but rapid development only began in the mid-1970s when commercial layer hybrids were introduced from western countries. Modern management is used in the layer industry, and each bird produces 250 to 260 eggs per year.

The swine industry is examined in section 5. Pork has become the second most important meat in local consumption, with average consumption of about 4.7 kg per person per year in the late 1990s. This consumption would have been much higher were it not for the government’s restrictive policies towards the slaughtering industry, which have disadvantaged the beef industry.

Section 6 discusses the prices of livestock and livestock products and gives some indication of the price spread between the wholesale price and the farm gate price. It appears that the price spread for beef is wide relative to that for poultry and pig meat and this may be a disincentive for small farmers to become involved in beef cattle production.

Section 7 investigates the animal feed industry and livestock performance. Thailand has a surplus in energy feeds but a deficit in protein feeds and water scarcity is a problem for the livestock sector. As farmers do not pay for surface water, there is no incentive for them to use it efficiently. The livestock industries have experienced problems obtaining water for animals to drink, for the cleaning of animals and their pens and for cooling pigs in the summer when it is hot and dry.

The government policy related to the livestock industries is presented in section 8. Livestock industries, with the exception of the poultry and pig meat industry, have been a relatively minor part of Thailand’s agricultural sector. The Fourth Economic and Social Development Plan indicated that the government should encourage industrialisation concurrently with agricultural development and give support to basic industries, supporting industries and agro-industries. The Board of Investments offered incentives designed to encourage industry to locate in rural areas outside of the Central Plains region.

Section 9 describes other issues involved in livestock industries, including finance and financial institutions. Development of new agricultural industries has been slowed by the reluctance of financial institutions to lend to farmers without land collateral. Whether this situation will persist in the medium to longer term in light of the difficulties that the Thai financial sector now faces is unclear.

The conclusion is that the information related to the livestock sector in Thailand is useful in designing policies for the livestock sector overall and for individual livestock industries. The design of appropriate policies will assume increased importance since the livestock industries are expected to grow with economic growth in Thailand.

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