Update on COVID-19 impact in Thailand
As COVID-19 ravages across the globe, Thailand has also been severely impacted. Apart from the measures that have been taken by the government to contain the virus, this article also details the implications for agriculture and the economic impacts of COVID-19 on different agricultural sectors.
Thailand reports 2,613 cases of COVID-19 infections, with 1,405 patients recovered and discharged from the hospital while 1,167 remain hospitalized. The country counts around 40 deaths due to COVID-19. The infections are found in 68 provinces, with the highest share in Bangkok.
On the 25th of March, the Thai government declared nationwide state of emergency in an effort to limit the COVID-19 outbreak. This was accompanied by a ‘soft lockdown’, by closing most non-essential businesses. Supermarkets and markets are allowed to operate for selling food and other necessary goods. Restaurants and other food providers can remain open for delivery and take-away. In addition to this, all international flights are banned from landing in Thailand, except for cargo flights. Land border crossings are closed as well. Citizens are asked to limit their traveling and practice physical distancing. Since the 3rd of April, the government imposed a curfew (22:00 - 04:00) to discourage citizens to violate physical distancing.
Impact on economy and per sector
Because of the massive global impact of COVID-19 and the government’s ‘soft lockdown’, there have been severe economic consequences as well. Thailand’s economy is expected to lose 1.3 trillion THB (40 billion US$) in 2020. The tourism sector is impacted the most, since all travel from abroad is suspended and domestic travelers are encouraged to stay at home. The Thailand Central Bank forecasts that the Thai economy will contract 5.3% in 2020, which is the weakest performance since the 1997 Asian Financial Crisis. The impact will most likely result in 5 - 7 million people facing unemployment, a huge portion of the 38 million people in the workforce. This figure could go up to 10 million if the COVID-19 outbreak continues until Q3. The sectors most heavily impacted by unemployment are tourism, retail & wholesale, restaurants & food shops, hospitality industry, logistics and construction.
Agriculture has also been affected, and the Ministry of Agriculture and Cooperatives (MOAC) COVID-19 Operation Center has launched policies to aid the affected farmers. The most important measures are:
A total of 10 million farmer households will be paid 5,000 THB monthly for 3 months.
The State Bank for Agriculture and Agricultural Cooperatives (BAAC) extends the repayment period of farmers & cooperatives with an exemption of principal repayment during the first 3 years. Cooperatives can apply for new loans to restore cooperative business.
Repayment by cooperatives to Cooperative Development Fund is extended up to 31 October 2020. Members (farmers) of Cooperatives are granted extension for repayments.
Agricultural Aid Fund extends repayment period to all farmer groups for another year, or until 28 February 2021. The members of farmer groups are approved to extend their repayment period without fine and no interest fee being charged.
Temporarily reducing unemployment in rural area, caused by business closures due to COVID-19. 16,200 local workers nationwide are employed by the Royal Irrigation Department for 6 months, with a 377 THB daily wage or 8,000 THB monthly.
MOAC has asked all governmental agencies to buy more agricultural and food products from farmer groups and cooperatives and deliver these to COVID-19 operation network.
MOAC promotes efficiency in the agro-food value chain (farm productivity) to ensure food security and safety.
Improve logistic and distributive capacity via e-marketplaces and cooperatives nationwide.
Collaboration with 1,300 agricultural cooperatives nationwide to launch an online community market to stimulate the buying of more locally produced agricultural and food products and deliver to COVID-19 operation network.
In the next section, the impact of COVID-19 on the different sub-sectors are discussed.
Productivity in agro-food chain
The agricultural sector value chain employs 24% of the total (38 million) workforce. Although production may not be the issue, demand is dwindling due to a lack of tourists and a diminishing purchasing power due to unemployment, as well as a sharp decline in exports. Thailand needs to focus on productivity in the agricultural value chain to prepare for export when the market restores, in line with the country’s food security and safety vision.
The poultry industry has been heavily hit by COVID-19, especially the domestic market which accounts for 62% of total production. Mainly because all the tourists have vanished, but also because of consumers making more economic choices with less meat. The price for a kg of chicken has decreased from 33-36 THB last month to 30 THB in April.
Fisheries and aquaculture
More than 85% of total fish and seafood production in Thailand is destined for export. Major markets are the USA, Japan, China PR, ASEAN and the EU. The sector may loose 600 - 1,180 million THB due to the crisis and many international buyers have delayed their orders. The cancellation of international and domestic flights could also further delay fishery products.
The export of live and chilled shrimp products to China PR could decrease 50 - 90 %, and the local fisheries market could lose 530 million THB to a lack of domestic demand.
Thailand will likely produce 3 million tropical fruits in 2020, of which durian, longan and mangosteen account for 80%. The export of fresh fruits from Thailand is worth 86,000 - 88,000 million THB per year. Export of all fruit products (fresh, chilled, frozen, dried) by Thailand is worth 113,000 million THB per year. China PR accounts for 50% in this number (64,000 THB), but this number is expected to drop to 45,000 THB in 2020.
The floriculture production area in Thailand is 11,200 ha. 16,000 farmers and 300 exporters are active in this sector, with an annual export value of 3,500 - 4,000 million THB. The biggest markets are Japan, USA, EU, China PR, India and the Middle East. However, since most festive events and big gatherings are canceled, the sector is heavily hit with a decline in demand.