Vol. 28 No.

Thailand Development Research Institute

March 2013

Contents Intricate Issues behind Public Debt Management by Pakorn Vichyanond Proposed Reforms in the Structure of Thailands Sugar and Cane Industry by Viroj NaRanong Child Poverty in Thailand: A Study Using Non-income and Income Concepts by Jiraporn Plangpraphan and Somchai Jitsuchon 3 6 13

Many countries are now suffering from public debt crises. Thailand must be prudent in managing governments borrowings. Without efficiency of resource usage and continual efforts in limiting debt commitments, the country might also encounter sovereign debt problems. See related article on page 3.
ISSN 0857-2968

TDRI Quarterly Review

Vol. 28 No. 1

TDRI Council of Trustees and Board of Directors

* Mr. Kosit Panpiemras Chairman TDRI Council of Trustees and Board of Directors; and Executive Chairman Bangkok Bank Public Company Limited * Dr. Ammar Siamwalla Vice Chairman TDRI Council of Trustees and Board of Directors; and Distinguished Scholar * Dr. Anat Arbhabhirama Director and Advisor to the Board of Directors Bangkok Mass Transit System Public Company Limited * Mr. Apilas Osatananda Chairman Development Cooperation Foundation * Dr. Bandid Nijthaworn President and CEO Thai Institute of Directors Association * Mr. Banyong Pongpanich Chairman Phatra Securities Public Company Limited M.R. Chatu Mongol Sonakul Chairman M.T.R. Asset Managers Company Limited Dr. Chirayu Isarangkun Na Ayuthaya Director-General Crown Property Bureau Mr. Isara Vongkusolkit Chairman, Mitr Phol Group * Dr. Juree Vichit-Vadakan Chairperson, Center for Philanthropy and Civil Society National Institute of Development Administration (NIDA) * Dr. Kessara Thanyalakpark Assistant Professor Faculty of Commerce and Accountancy Chulalongkorn University Mr. Teisuke Kitayama Chairman of the Board Sumitomo Mitsui Banking Corporation, Japan * Ms. Kobkarn Wattanavrangkul Chairperson Toshiba Thailand Company Limited * Dr. Kobsak Pootrakool Executive Vice President Bangkok Bank Public Company Limited Mr. Mechai Viravaidya Chairman, Population and Community Development Association * Dr. Narongchai Akrasanee Chairman of the Board of Directors Seranee Group Dr. Pasuk Phongpaichit Professor Faculty of Economics Chulalongkorn University Dr. Piyasvasti Amranand Chairman Energy for Environment Foundation * Dr. Pranee Tinakorn Professor of Economics Faculty of Economics Thammasat University H.E. Mr. Shigekazu Sato Ambassador of Japan to Thailand * Dr. Snoh Unakul Chairman TDRI Foundation * Dr. Somkiat Tangkitvanich President, TDRI Mr. Sompop Amatayakul President B.B. Business Management Co., Ltd. * Dr. Twatchai Yongkittikul Secretary-General Thai Bankers Association * Dr. Virabongsa Ramangkura Chairman of the Executive Board Double A (1991) Public Company Limited * Prof. Dr. Yongyuth Yuthavong Senior Advisor to President National Science and Technology Development Agency

* Indicates membership on the TDRI Board of Directors.

The Thailand Development Research Institute Foundation was established in 1984 to conduct policy research and disseminate results to the public and private sectors. TDRI was conceived, created and registered as a non-profit, non-governmental foundation, and is recognized as such by the Royal Thai Government. The Institute does technical and policy analyses to support the formulation of policies with long-term implications for sustaining social and economic development. TDRI has six research programs: Human Resources and Social Development, International Economic Relations, Macroeconomic Policy, Natural Resources and Environment, Science and Technology Development, and Sectoral Economics.
Caption: Nujpanit Narkpitaks Assistant: Wattana Kanchananit Editor: John Loftus (2nd and 3rd articles) Head of Publications Unit: Jirakorn Yingpaiboonwong

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TDRI Quarterly Review

Intricate Issues behind Public Debt Management

Pakorn Vichyanond*

1.

INTRODUCTION

In recent years (2011-12) economic stresses and

strains as experienced by many industrial countries clearly demonstrate the importance and widespread repercussions of public debt management. The United States of America, for example, encountered its limit on government debt of U.S.$ 16.4 trillion by the end of 2012, so whether the legal amendment or fiscal cliff will occur will certainly have strong impact on global economy. Japan and some countries in the Euro zone could hardly restrict their governments borrowings, so Japans short- and long-term debt surged to 229 percent of GDP in 2011, while those of Greece and Italy reached 160 percent and 120 percent respectively (see Table 1). Another surprise was that even though the European Union (EU) has regulations controlling member countries annual fiscal deficits to stay within 3 percent of GDP and public debt outstanding within 60 percent of GDP, actually both member countries and Japan continually undertook fiscal policies in several formats so as to support income of the general public as well as the status of their economies. Governments provided various kinds of welfare which gave rise to enormous amounts of long-term obligated fiscal expenditures. Besides, those welfare programs became the channels which stimulated the general public to request for continual or even more assistance from the governments. In other words, the role of fiscal measures has been converted from being temporary rescuing instruments during economic recession or excessive boom to the permanent ones as demanded by the public. And when the governments could not collect adequate revenue, growing expenditures pressured them to commit more debts on a continual basis until public debt predicaments not only emerged but also persisted or even worsened. Thailand is not any exceptional case. Even though its ratios of public debt outstanding and fiscal deficit to GDP (41% and 4% respectively) are well below those of EU countries, most political parties tried to utilize fiscal measures in various fashions so as to

attain popularity. Examples of these policy actions were rice pledging, first-time car purchase, free bus service, financial credits extended to small businesses, debt refinancing for low-income farmers, and many other populist measures. Before trying to derive some useful guidelines to achieve optimal public debt management, it is worth reviewing the fundamental roles of public debts in most economies. Primarily, those borrowings are meant to complement tax revenue in financing public spendings and basic infrastructure projects. Secondly, those borrowings enable the government to implement some fiscal policies in order to stabilize the countrys economic growth path. Thirdly, government securities normally play some important roles in the recycling of domestic savings to fund investment and consumption. For example, rates of return on treasury bills and government bonds typically serve as benchmarks for financial instruments issued by private entities, because the government is ordinarily given the best ranking by most credit rating agencies. Moreover, government securities serve as a means of financial intervention in the secondary markets by the central bank for the purpose of tightening or loosening liquidity in domestic financial markets. Such intervention enables the government to flexibly adjust local liquidity in order to properly cope with global trends and/or pressures on the domestic front.

2.

THAILANDS REGULATIONS AND THEIR SHORTCOMINGS

Given the prominent roles of public debts in most economies as stated above, the two questions that several parties may have in mind are (1) whether the Thai government has regulations controlling public (domestic and foreign) debts, and (2) whether those rules are adequately prudent ensuring that Thailand will certainly not encounter public debt crises such as the ones in EU and Japan. Details of those rules are the following.

Dr. Pakorn Vichyanond is Research Director of the Macroeconomic Policy Program at TDRI. He wishes to thank Dr. Chalongphob Sussangkarn, Distinguished Fellow at TDRI, for valuable comments.

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Vol. 28 No. 1

Table 1 Public Debt Outstanding as a Percentage of GDP in 2011

Greece Italy Portugal Ireland Spain Japan U.S. France Canada U.K. Germany NewZealand China Australia Source:Eurostat 160.81 120.11 106.79 104.95 68.47 229.77 102.94 86.26 84.95 82.50 81.51 37.04 25.84 22.86 Singapore Malaysia Thailand Philippines Indonesia Laos Myanmar Vietnam Cambodia Singapore Taiwan SouthKorea HongKong 100.79 52.56 41.69 40.47 25.03 57.36 44.32 37.97 28.60 100.79 40.80 34.14 33.86

(1) In each fiscal year the governments total borrowings cannot exceed 20 percent of annual budgetary appropriations plus 80 percent of repayment expenditures. In other words, the government can borrow funds to refinance maturing debts. (2) In each fiscal year the governments commitments of external debts have to stay within 10 percent of annual budgetary appropriations. And the ratio of foreign debt service to export earnings must not exceed 9 percent. (3) Total governments debt service (principal plus interest) remitted to domestic and foreign creditors must not exceed 15 percent of fiscal revenues. The above-mentioned regulations may indicate that Thailand is careful about preventing its public sector from borrowing to an excessive extent. However, a closer scrutiny reveals that these rules contain several loopholes as illustrated below. (1) Financial commitments by state enterprises are only restrained in the aspect of government guarantee. For instance, if the public agencies are limited companies (e.g., Thai Airways Co., Ltd., Bangkok Dock Co., Ltd.) or financial institutions (e.g., Krung Thai Bank, Government Savings Bank, Government Housing Bank), the total amount of government guarantee in each fiscal year cannot exceed 10 percent of the budgetary appropriations. In each ease, if the borrower is a limited company, the amount guaranteed by the government cannot exceed six times of the capital fund of that company. If the borrower is a financial institution, the amount guaranteed cannot exceed four times of the capital fund of that financial institution. However, if the public agencies are organizations or authorities (e.g., Electricity Generating Authority of Thailand, TOT Public Company Limited, State Railway of Thailand, Bangkok Mass Transit Authority, Metropolitan Waterworks Authority, Provincial Electricity Authority), there is no limit on the amount of government guarantee. Special preference is given to the agencies providing public utilities such as water works or electricity generation and distribution. (2) At various times the Thai government issued particular legal decrees enabling the government

to borrow additional funds for extra spendings. Even though some of these borrowings which are allocated to serve emergency incidents (such as the Decree on Soft Loan for Flood-Affected People, B.E. 2555, the Emergency Decree on Water Resource Management, B.E. 2555, the Decree on Insurance Pool Fund, B.E. 2555) may seem justifiable, these special legal decrees effectively nullify the above-mentioned 20 percent limit of government borrowings, so they could lead the country to face public debt predicaments. (3) Worse yet, recent Thai governments favor the adoption of various populist measures in order to capture public attention. Examples of these populist projects are tax reduction on first-car and first-house purchases, debt suspension for low-income farmers, overall health insurance or the 30-baht scheme, free bus service, and rice pledging program. These fiscal policy actions can easily induce the public sector to be trapped in a vicious deficit cycle such as the ones in Euro zone countries. (4) Certain ceilings of public debt outstanding to GDP ratio, such as 50 percent or 60 percent, are often announced by the Thai government as a policy guideline in managing public debt. However, this limit has never been legalized. So it does not have any steadfast and favorable impact on public debt management.

3.

SUGGESTED AMENDMENTS AND THEIR RATIONALES

(1) A very crucial issue in managing public debt is fiscal sustainability. This should be wellpreserved at all times for the purpose of supporting stable economic growth path. To achieve this, the Maastricht criteria to limit budget deficits should be put into a law, such as the one by the Indonesian government. This law prescribes that the consolidated national and local governments deficit on the overall cash balance be limited to 3 percent of GDP in any given year, and that the total central and local government debt not exceed 60 percent of GDP. This

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TDRI Quarterly Review

law will certainly help in ensuring fiscal sustainability. In this context, what also deserves strong attention is that the above-mentioned consolidated and overall cash balance is defined to cover those on- and offbudget expenditures of all government agencies and state enterprises so as to avoid loopholes. (2) In complying with the limit of debt commitments, the government should thoroughly examine the public sectors debt servicing capacity in the macro context, not just current expenditures. Examples of items which determine the debt servicing capacity are expected revenue and net project earnings. The government does not have unlimited debt servicing capacity since it cannot always resort to the central bank as a certain source of funds, because doing so may conflict with the prevailing restrictive monetary policy. Neither may it raise particular taxes at any time due to political reasons. Worse yet, it may have difficulties in issuing bonds to the general public or investors overseas if its credibility has deteriorated to some extent. To be on the safe side, the government should disperse its future debt service over the long run and continually abide by its obligations on time. Otherwise, it may get caught in a debt trap or evil cycle such as the ones experienced by some Latin American countries in the past and some Euro zone countries now. (3) Debt servicing capacity largely depends on the efficiency of fund usage. Therefore, the government should give strong preference to productive investment projects when it comes to the allocations of public borrowings. Special emphasis should be placed upon the investment projects which yield high returns plus low risks within a short time frame. (4) To achieve efficiency of resource usage essentially requires good coordination and cooperation among relevant parties, including public and private ones. Such coordination and cooperation will also help yield benefits from economy of scale. Route planning or logistics of transport is one clear-cut example of projects that need comprehensive cooperation among several concerned authorities holding responsibilities in designing and constructing roads, railways, subways, expressways, and skytrains. Thus, strong attention

should be given to the timing of cooperative efforts to undertake the targeted projects. (5) The time profile is a very important element of public debt management in many respects. Other than the timing of cooperative efforts among various agencies involved, the government should investigate the overall profile of its existing debt service before committing new debts. This consideration will help select proper maturities of new debts so that the countrys future debt services do not cluster in any particular period. Avoiding such bunching-up will help the government reduce the risk of encountering debt tension. Close and continual monitoring of the overall debt service profile together with global financial atmosphere will give opportunities for adjusting or improving the prevailing debt obligations by prepaying or refinancing some parts of the debts already committed. Examples of such improvements are to reduce foreign exchange risks, lessen debt burden, and smoothen debt service structure in the future. (6) Another crucial facet of public debt management is its consistency with the prevailing and upcoming monetary and exchange rate policies. Otherwise, conflicts may arise and generate adverse effects to all concerned parties. Strong attention should also be given to global economic atmosphere and domestic income distribution. These elements are suggested because domestic policy actions are ordinarily subject to the prevailing external constraints. Meanwhile, those actions certainly have impact upon income distribution. The above-mentioned six aspects of measures recommended to deal with public debts may seem complicated and difficult to implement, but they should assist the country in averting sovereign debt difficulties. They deserve continual efforts, because once the degree of investor confidence is shaken or declines due to the high chance or actual occurrence of sovereign debt crises, the recuperation tends to take a very long period of time as widely experienced by several member countries in the Euro zone (e.g., Portugal, Ireland, Italy, Greece, and Spain) between 2008 and 2013.

TD DRI Quarterly Re eview

Vol. 28 No. 1

Propo P osed Reform R ms in the Struct S ure of f Thail lands s Suga ar and d Can ne Ind dustry y
Viro oj NaRano ong*
1. BACKGR ROUND

D uring th he past three decades, the e Thai sugar and cane industry y has been und der the state-c controlled syst tem
known to th he public as the 70:30 revenue-shar ring system, whi ich has been implemented i since 1982/83 3 in the wake of f unanticipated d oversupply of cane and the g price of o sugar in 1981/82. To gain g fall in the global support from m the major stakeholders, the governm ment set new dom mestic prices of sugar at twice t that of the then global prices. p The ex xcess profit fro om the increa ased price of the domestic sal les (the so-ca alled Quota A) A h farmers and mills. The 19 984 was used to support both ugar Act was enacted to form the backbone Cane and Su of the system m. For 15 1 years sinc ce that time, the system ran rather smooth hly. The nego otiations on ca ane prices, wh hich once had be een unpredicta able and occasionally o v violent or the cause of str reet demonstr rations were w p talks at the negotia ating table. replaced by peaceful The Thai T sugar industry has gr rown from be eing the fifth or sixth largest exporter in the world to be curing the so olid among the top three, eventually sec position of Number 2 exporter. Ironically, this ecause of the stability s affor rded expansion was possible be by the gove ernments con ntrol and the 1984 Cane and Sugar Act, both b of which h were designe ed in light of f the South Africa an system to curb c the area planted p with cane c and the capac city of mills. The 1997 1 Asian financial f crisis, which had d its origins in the e overvaluatio on of the Thai Baht, resulted d in floatation of f the currency y from the be eginning of July J that year. Th his resulted in n de facto de evaluation of the Baht from an n exchange rat te of about 25 5 baht to US$1 to more than 50 5 baht per dollar. d As a result, r the glo obal price of sug gar (when co onverted into baht) tended d to catch up with, w and, occ casionally sta ayed above, the controlled domestic d price. Whenever r this happen ned, sugar disappeared from the domestic ma arket. g bega an to be dissa atisfied with the The growers (rather stabi ilized) price of cane, which w had been b determined based b on the weighted w average of the exp port

and d domestic prices p of sug gar (the latte er which has s rem mained consta ant for more t than 15 years s), and started d to apply pressure for a hike in domestic sugar prices. . ost governmen nt administrat tions did not want w to touch h Mo the e controlled price of dom mestic sugar, which still l rem mained higher r than the exp port price most of the time e (Fi igure 1), bu ut often work ked around it to satisfy y gro owers deman nds by having g the Cane and d Sugar Fund d (CSF) borrow extra money y, most of th he time from m vernment ban nks, to top up the cane price es paid by the e gov mills under the 70:30 schem me. On the su urface, CSFs s bt was the industrys o own debt. However, H the e deb pro oducers appar rently had no o plan or intention to o rep pay the debt, which w reached a total of 25 billion baht t in 2008, when the late form mer Prime Mi inister Samak k undaravej deci ided to raise t the domestic price p of sugar r Su by 5 baht/kg (an n approximate e 33% increase e) and use the e tra revenue so olely for debt r repayment. ext While th he core of th he 70:30 rev venue sharing g sys stem was ba ased on the South African model in the e 1980s, our sy ystem implem ments only half of its s abilization sy ystem, i.e., CSF compe ensated both h sta gro owers and mi ills (also base ed on the 70:3 30 ratio) in a bad d year; however, it never collected a significant fee e fro om them in a good year. The small stabilization fees, , usu ually around 0.5 percent o of the revenue, were often n col llected after CSF C had alread dy got into debt. Under th his system, ca ane prices are e paid in two o ins stallments: the e initial (pre-se eason) and the e final prices.

Dr. Viroj NaRanong N is Research Dir rector on Hea alth Economic cs and Agricul lture at Thaila and Developm ment Research h Institute (TDRI). ( Corre espondence: E-mail: E viroj jtdri@yahoo.c com or viroj@ @tdri.or.th; F Fax: +66(0)2 718 5461-3; ; Mobile: +66(0)81 382 7846.

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TDRI Quarterly Review

Figure 1 Controlled ex-factory price vs export price of sugar January 2001 to May 2012
25

Baht/Kg

20

15

10

0 Jan01 Jun01 Nov01 Jul03 Dec03 May04 Oct04 Mar05 Aug05 Jan06 Jun06 Nov06 Apr02 Jul08 Dec08 May09 Oct09 Mar10 Aug10 Sep02 Feb03 Jan11 Jun11 Nov11 Apr07 Sep07 Feb08 Apr12

Exfactorypriceofrefinedsugar(VATexcluded) Exportpriceofrefinedsugar Averageexportpriceofwhiteandrefinedsugar

Source: Compiled by the author based on data from the Office of the Cane and Sugar Board (OCSB) and the Office of Agricultural Economics(thelatterisavailablefromhttp://www.oae.go.th/oae_report/export_import/export.php).

At the beginning, millers fought for the low initial prices of cane, but later they tended to agree to high prices so that growers would have an incentive to expand. This practice also increased the chance that both parties would be compensated by CSF. In 2006/07, in spite of the 3-baht sugar price hike, CSF was liable to pay the mills 9.8 billion baht (70% of which was for the overpaid cane and 30% to compensate mills for their low return). The Cabinet during the Surayud Chulanont Administration decided to have CSF borrow from the Bank for Agriculture and Agricultural Cooperatives (BAAC, which is a government bank) to pay the mills. The government committed itself to allocate a specific annual budget of 450 million baht to CSF, which would use that fund to repay BAAC until the debt would be paid off in 2020. As mentioned previously, in 2008, Prime Minister Samak decided to increase the domestic sugar price by 5 baht/kg, the revenue from which would be designated to repay the accumulated CSF debt, which had reached 25 billion baht by then. Based on an initial study by the National Economic and Social Development Board (NESDB) and repeated requests from the Beverage Association to reduce the domestic price of sugar after CSF would supposedly complete its debt repayment in late 2011,1 the Ministry of Industry (MOI), based on a Cabinet resolution of the Abhisit Vejjajiva Administration, had CSF commission the present research project to be carried out by the Thailand Development Research Institute (TDRI) in 2011.

In late 2011, as MOI proposed to the new government that CSF borrow an amount to top up the cane price for the year 2011/12 by 154 baht/ton, the Cabinet of the Yingluck Shinawatra Administration asked MOI to oversee our study to make sure that it would be finished by its September 2012 deadline in order to be able to implement our proposal in this canecrushing season (2012/13). The final TDRI report was submitted in September, but was under scrutiny by the overseer committee for almost four months before it was approved, after only minor revisions were requested, at the end of January 2013.

2. MAIN OBJECTIVES The main objectives of the proposed reform are as follows: To prevent occasional sugar shortages in, or disappearance from, the domestic market when the global price is higher than the controlled domestic price To work out a system that provides a fair price of sugar for the downstream industry To reform the cane pricing system (also known as revenue sharing system) to improve efficiency and flexibility as well as lessen controls

TDRI Quarterly Review

Vol. 28 No. 1

To reform CSF so that it can provide stability for both the growers and the industry To conduct organizational reform, including drafting, or overhauling the Cane and Sugar Act 3. PROPOSED REFORMS Based on our lengthy analysis (see the full report in Thai available from http://tdri.or.th/research/ structural-change-sugar-cane-industry/), it is proposed in the study that structural reforms be instituted in all major aspects, mainly the domestic sugar market, the cane buying/pricing system, including the role of CSF as the price stabilizer, and organizational and legal reforms. 3.1 Domestic sugar market Even with, or because of, the overly controlled system a combination of domestic quota and price controls it has been repeatedly the case that the existing system has failed to guarantee the availability of sugar when the export price is significantly higher than the controlled ex-factory price. Whenever that happens, sugar tends to disappear from the market to be sold at higher prices in the black market, as well as be smuggled across borders to neighboring countries. The study proposes three or rather one actual measures to solve this problem, since the other two are in fact non-measures. The first one is to abolish the domestic price control of sugar. This non-measure alone will provide every stakeholder with an incentive to supply sugar to the domestic market at all times.2 In order to ensure domestic availability and a reasonable price, and to provide small and independent mills with a level playing field in the domestic market, the domestic quota (Quota A) would remain in place, where the annual quota will be allocated to each mill according to its past share of cane crushing, but shorter-term allocations such as the current weekly allocation would be strictly forbidden since there are risks that this

cartel-like mechanism might be exploited to facilitate price collusion in the absence of price controls. Once the price controls are lifted, the administration of the domestic quota should be much easier than in the past, since there would be no gain from selling sugar in the domestic black market. The current ASEAN Free Trade Area (AFTA) agreement under which all neighboring countries now charge zero import tax on sugar should also curb any incentives to smuggle sugar across the border, since the smugglers cost would not be significantly less than that of the importers. Since it is possible that such reform could result in an increase in domestic consumption of sugar, and to ensure that there would be no shortage as people might change their buying behavior, it is proposed in the study as a precaution that the Sugar Committee increase the domestic quota by at least 10 percent in the first year of implementation, a rate which is significantly higher than the usual increase in annual consumption. If this proves to be too much in the sense that millers cannot sell their whole allotted quota while the wholesale price is in line with the export price the formal first year quota could be adjusted accordingly at the end of the year in order to honor reality. For the subsequent years, it is proposed in the study that loose but binding rules for the Sugar Committee be followed: (a) if the average wholesale price is greater than the average export price by x percent, the domestic quota for the next year must be increased by at least x/2 percent; and (b) if the average wholesale price is less than the average export price by y percent, the domestic quota for the next year can be decreased by no more than x/5 percent, but the Committee is allowed to maintain or even increase the quota if it deems necessary. Moreover, the Committee can impose an extra quota during the year if it finds that the average wholesale price in the previous few months is significantly greater than the average export price. In such a case, the extra quota should be offered to all mills according to their initial share, but every mill should be allowed to decline such an offer. The third non-measure is also a precautionary one that is designed simply to deter price collusion. In principle, it is proposed that the government abolish protection and allow the import of white sugar, including from non-ASEAN countries, at zero tax. As the worlds solid second-largest exporter of sugar, under normal circumstances, it is not expected that anyone in Thailand would find it profitable to import sugar to compete in the domestic market. However, this non-measure might be necessary to discourage any attempts to tacitly form a cartel aimed at establishing a monopolistic price in the domestic market. Together, these measures should be sufficient to make the domestic sugar market resemble a competitive one. Their impacts on households since the sugar price would occasionally be higher than the currently

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Vol. 28 No. 1

Figure 2 Actual versus simulated cane prices based on the proposed formula
(Unit:bahtpertoncaneat10CCS)
1,600 1,400 1,200

Note:

1,000 800 600 400 200 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 /98 /99 /00 /01 /02 /03 /04 /05 /06 /07 /08 /09 /10 /11 /12 690 485 478 689 530 531 504 658 847 702 672 918 1,000 1,039 1,075 690 600 550 689 550 611 580 658 847 800 803 918 1,000 1,144 1,229 765 529 493 736 609 602 570 713 1,024 700 739 958 1,188 1,460 1,344 765 1,022 1,110 1,125 1,160

Finalcaneprice Finalcanepriceplusloan Canepricebasedontheproposed formula Finalcanepriceincase5bahtis addedtothenormalpricecalculation FinalCanePriceincase5bahtand loanareaddedtothenormalprice calculation

896 1,022 1,110 1,230 1,314

The final price that the growers receive might differ from that in our formula, depending on the compensation from CSF orthefeetheyhavetopayCSFthatyear. Source: Compiled and simulated by the author based on data from the Office of the Cane and Sugar Board and United States DepartmentofAgriculture.

If the realized price falls below the initial price, the final price would be the same as the initial price (i.e., the farmers would not receive any more payment than the amount they had already received as the initial price, and CSF would draw from its stabilization fund6 to compensate the mills for the overpaid price, plus 42.86 percent7of that amount to compensate the mills for their unanticipated low revenue).8 If, however, the realized price is higher than the initial price, but below the estimated price, the final price would be the same as the realized price, and the mill would be liable to pay the difference to the farmers.9 The other case is that the realized price is higher than both the initial and the estimated prices (and the estimated price was also higher than the minimum price), the final price would be equal to the estimated price plus 80 percent of the difference between the realized and the estimated prices. The mill would pay the farmers the difference (between the final and initial prices), and deliver the 20 percent of the difference

between the realized and the estimated prices to CSF on behalf of the farmers plus 42.86 percent of that amount as its own contribution to the stabilization fund of CSF. Under this set of rules (also spelled out in the proposed Cane and Sugar Act), CSF would act as the price stabilizer, a much more credible role than now exists (as well as in the past three decades) under which CSF is liable to compensate the mills in a bad year (according to Article 56 of the 1984 Cane and Sugar Act). However, there is no explicit rule to collect a significant stabilization fee from the industry in a good year; the combined practices have forced CSF to be in continuous debt with neither means to repay nor credibility to borrow, except from government banks under the governments guarantee.

3.3 Organizational and legal reforms The current governing body of the industry consists of the Cane and Sugar Board (CSB) and its subordinate boards: the Executive Board, the Cane Board, the Sugar Board, and CSF, and two administrative offices: the Office of the Cane and Sugar Board

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11

(OCSB) and the Office of the Cane and Sugar Fund (OCSF). In the study, it is proposed that the Cane Board be abolished, as cane quantity control has never been enforced and is deemed rather undesirable to do so now. It is also proposed that the Sugar Board be reorganized in such a way that the members from the government would constitute half the board, with one of the members appointed by the Minister of Commerce to serve as the chairperson, since the boards role in allocating the domestic quota and preventing monopoly would become a more important issue after the abolishment of the domestic price control. CSF (and OCSF) would have more important roles and would need to be more independent as well as have better financial and administrative measures in place. In the study, it is proposed that a designated stabilization fund be set up as an independent fund within CSF to ensure that the fund would be allowed to be used for price stabilization only and for no other purpose.10 The cane and sugar industry (and OCSF) should devise a long-term research and development plan as well as set up a research institute that would work within the industry and coordinate with other governmental funding and research agencies. CSB and CSF should also work together to determine research and operational fees accordingly, which in the study are proposed to be collected from farmers and millers on a 50:50 (rather than 70:30) basis. OCSB would be relieved of most of its control work and should be geared toward being an information and strategic center, which should become a more important and compelling task as Thailand has continued to expand its cane and sugar production almost fivefold within only three decades, making more peoples welfare dependent on the industrys long-term health and sustainability. The Ministry of Commerces role would be shifted from maintaining price controls to preventing collusion and protecting consumers through such means as product labels. The 1984 Cane and Sugar Act The 1984 Cane and Sugar Act was designed in such a way that it provides very extensive power to CSB. However, CSB and its subordinate boards and organizations have been selectively using their power or enforcing the law, which has resulted in a lack of implementation of some key articles, such as Article 57, which requires the mills to send their as well as the growers surplus revenue to CSF, but in practice the calculation of the final cane price was done in such a way that there would never be any surpluses. Since this practice that tends to leave CSF in constant debt benefits both mills and growers, it has been allowed to be administered against the spirit of the law for almost 30 years.

The study, therefore, includes a draft of a new cane and sugar act in such a way that the stakeholders would have to follow and comply with the main system design and specified formula, and that the system would not be swayed or swung by political or bureaucratic judgments, or rely too much on results of negotiations by the main stakeholders. However, if chosen by the government and agreed upon by CSB, all the proposed reforms could be undertaken even now under the current 1984 Act while the new draft is still being put through the legislature. In this respect, the current law itself, or the processes that are needed to enact the new law, is not the obstacle that would prevent the reform from being implemented in this coming season (2012/13), although the new law is still badly needed to ensure that the reforms that would be carried out in the future would not deviate from their essential designs, which are necessary to achieve all the objectives proposed in the study.

ENDNOTES
1

The debt, however, had never been repaid in full because CSF was later forced by the growers to borrow again to top up the cane price for the year 2011/12. While the existing measures appear to provide an extra incentive for selling sugar in the domestic market as the controlled domestic price tends to be higher than the export price most of the time, they failed miserably when the relative prices were reversed. The original formula proposed 7 percent, with a contingency clause that it would be upgraded to 8 percent in the following production year should the government follow its commitment to abolish the sale of 91 RON (Research Octane Number) gasoline. Since this actually happened in 2013, the multiplier 1.07 would be changed to 1.08 should this formula be used in the next production year (2013/14). Interestingly, Indias Rangarajan Committee Report, which came out in October 2012 just a few weeks after our submission proposed a cane price that is equivalent to 70 percent of revenues from sugar and all byproducts, or 75 percent of revenues from sugar alone. It should be noted that the latter share of 75 percent is almost identical to the multiplication product of our 1.07 x 70 percent. The Standard sugarcane at 12 CCS has been chosen because it is the closest representative to the average CCS of Thai cane in recent years. Even if one excludes the northeastern region of Thailand, the average CCS in each of other regions would still be higher than 11 in normal years. Therefore, on average, the proposed minimum price (1,100 baht per ton of cane of 12 CCS) would mean that the

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farmers in every region still receive more than 1,000 baht per actual ton of cane.
5

At present, the formal Quota B is 0.8 million tons per annum, but the actual amount put up for bidding by the Thai Cane and Sugar Corporation is only one half of that (0.4 million tons of the raw sugar, at the average polarization of about 98).
9

of the expected price fell below the minimum price. In such a case, while CSF would still compensate the mills fully for the price they overpaid the farmers, its designated compensation to the mills would be limited to 42.86 percent of the difference between the 90 percent of the expected price and the (lower) realized price. If necessary, in these years the Cane and Sugar Board (CSB) may also vote to collect the stabilization fee from both farmers and millers up to 3 percent of the annual revenue of the industry. Normally, however, this would not happen since the farmers and millers combined constitute the majority of CSB, so it is unlikely that they would vote to tax themselves unless they agree that it is absolutely necessary. Including its rather small administrative costs, which will have to be shouldered by the main CSF fund.

The study also proposes that CSF open a specific stabilization fund/account whereby the fund cannot be used for other purposes (including its administrative costs, which should be drawn from the main CSF. This is to ensure credibility of the stabilization fund, especially if it would have to borrow from a financial institution. 42.86 percent is equivalent to 30/70. Except for the case where the minimum price kicked in as the initial price which means that 90 percent
10

7 8

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Child d Pov verty in i Tha ailand d: A S Study Using Non-in N ncome e and Incom me Co oncep pts
Jirapor rn Plangp praphan Somc chai Jitsuchon*

T his repor rt is based on two t research projects p finan nced by the UNIC CEF office of f Thailand. The T first resea arch
project, whic ch was comp pleted in 2008, was aimed d at producing a set of ind dicators on deprivation that t measure Th hai childrens s poverty si ituation that go beyond the monetary dim mension. The indicators were w u data fr rom the Mu ultiple Indicat tors computed using Cluster Surv vey (MICS), which was a pioneer sur rvey conducted by y the Nationa al Statistical Office O (NSO) ) of Thailand wi ith financial support from m UNICEF. The T basic set of deprivation d ind dices were computed based d on methodology y developed in i the Univer rsity of Bristo ols child pover rty study. Under U that method, m absol lute poverty amo ong children is i measured by b deprivation n of human needs s in many are eas (food, safe e drinking wa ater, sanitation fac cilities, health h, shelter, edu ucation, inform mation, access to t services). However, H we follow an NS SOUNICEF rep port in groupi ing the variou us MICS indi ices into eight cat tegories as fol llows: 1. 2. 3. 4. 5. 6. 7. 8. Nu utrition Ch hild health Re eproductive health h Ch hild developm ment Ed ducation En nvironment Ch hild protection n Ch hild vulnerability, includin ng to HIV/AID DS, an nd orphanhood d

This basic b set of deprivation d ind dices was furt ther investigated to find correlations with Th hailands official ors (using the Socio-Econom mic monetary poverty indicato S in the same year (200 06). This exerc cise Survey, or SES) has importan nt policy im mplications. Fo or those indi ices which were strongly pos sitively correl lated with mo oney, finding ways w to incre ease househol lds tary poverty income shou uld suffice to simultaneous sly reduce deprivation. For the t remaining g indices, whi ich can be eit ther reversely co orrelated or uncorrelated with monet tary poverty, we need policy y measures th hat are specia ally c the pr roblem, and sh hould not exp pect designed to correct that increased d income wou uld help.
*

t task is to co onstruct differ rent levels of f The next mposite child d deprivation indices. The first level is s com the e computation n of composite e deprivation indices of the e eig ght categories s following th he above-men ntioned NSOUN NICEF list. Th he eight comp posite indices s were further r lum mped into a single child composite in ndex for each h hou usehold. The composite ind dices for the first fi two levels s are e classified ac ccording to the eir severity. The T third level l of the composi ite indices is s at the prov vincial or the e gional levels, where w the hou usehold depriv vation indices s reg are e further aggre egated into pro ovincial or regi ional indices. Since the e MICS surv vey in 2006 was w a special l sur rvey that might not be r routinely con nducted on a reg gular basis, th he issue of su ustaining the monitoring m of f chi ild deprivatio on arose. The e second research project t wa as initiated to examine the s suitability of using another r sim milar survey, the Child an nd Youth Su urvey (CYS), , wh hich is routine ely conducted d by NSO to produce p child d dep privation indi ices of the sa ame nature as s those using g MI ICS. The stud dy used CYS S for 2008 to compare the e dat ta with MICS S 2006, and re eported the fin ndings. Of 61 bas sic deprivatio on indices in n MICS, only y 20 can be e rep produced usin ng CYS (see Table 1). Th hese matched d ind dices fall int to six NSO-UNICEF ca ategories; the e missing two are a nutrition and reprodu uctive health h bec cause the qu uestions in th he questionnai ire that were e nee eded to com mpute the rel levant indica ators are not t pre esent in the CYS. Since the numbers s of matched d

Ms. Jirap porn Plangpra aphan is Sen nior Research her, and Dr. Somchai Jits suchon is Res search Director, Inclusive e Developm ment, Macroeconomic Policy y Program, TDRI. TD

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Table 1 Comparison of deprivation variables from MICS and CYS

MICS Nutrition MICS6 MICS7 MICS8 MICS45 MICS15 MICS16 MICS17 MICS18 MICS19 MICS41 MICS9 MICS10 Childhealth MICS25 MICS26 MICS27 MICS28 MICS29 MICS31 MICS32 MICS33 MICS34 MICS35 MICS23 MICS22 MICS24 Environment MICS11 MICS12 MICS13 MICS14 MICS95 Reproductivehealth MICS21 MICS20 MICS44 MICS4 MICS5 Childdevelopment MICS46 MICS47 MICS48 MICS49 MICS50 MICS51 Education MICS52 MICS54 MICS55 MICS56 MICS60 Childprotection MICS67_1 MICS67_2 MICS68 MICS69_1 MICS69_2 MICS101 Vulnerablechildren MICS75 MICS76 MICS78 MICS81 Indicators Underweightprevalence Stuntingprevalence Wastingprevalence Timelyinitiationoffirstbreastfeeding Exclusivebreastfeedingrate Continuedbreastfeedingrateat2023months Timelycomplementingfeedingrate Frequencyofcomplementingfeeding Adequatelyfedinfants Iodizedsaltconsumption Lowbirthweightinfants Infantsweighedatbirth Tuberculosisimmunizationcoverage Polioimmunizationcoverage Diphtheria,pertussisandtetanus(DPT)immunizationcoverage Measlesimmunizationcoverage HepatitisBimmunizationcoverage Fullyimmunizedchildren Neonataltetanusprotection Useoforalrehydrationtherapy(ORT) Homemanagementofdiarrhea ReceivedORTorincreasedfluidsandcontinuedfeeding Careseekingforsuspectedpneumonia Antibiotictreatmentofsuspectedpneumonia Solidfuels Useofimproveddrinkingwatersources Useofimprovedsanitationfacilities Watertreatment Disposalofchildsfeces Slumhousehold Contraceptiveprevalencerate Antenatalcare Contentofantenatalcare Skilledattendantatdelivery Institutionaldeliveries Supportforlearning Fatherssupportforlearning Supportforlearning:childrensbooks Supportforlearning:nonchildrensbooks Supportforlearning:materialsforplay Nonadultcare Preschoolattendance Netintakerateinprimaryeducation Netprimaryschoolattendancerate Netsecondaryschoolattendancerate Femaleadultliteracyrate Marriagebeforeage15 Marriagebeforeage18 Youngwomenaged1519currentlymarried/inunion Spousalagedifference:age1519years Spousalagedifference:age2024years Childdisability Prevalenceoforphans Prevalenceofvulnerablechildren Childrenslivingarrangements Externalsupportforchildrenorphanedandmadevulnerable CYS X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

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MICS HIVandAIDS MICS82 MICS86 MICS89 MICS90 MICS91

Indicators ComprehensiveknowledgeaboutHIVpreventionamongyoungpeople AttitudetowardpeoplewithHIVandAIDS KnowledgeofmothertochildtransmissionofHIV CounselingcoverageforthepreventionofmothertochildtransmissionofHIV TestingcoverageforthepreventionofmothertochildtransmissionofHIV

CYS X X X X

indicators are too few, we are not able to compute composite indices using CYS as we did with MICS. Another limitation is that we cannot repeat the exercise of finding correlation between the MICS-like indicators from the CYS with monetary poverty from SES, as the two surveys seem to use a different sample frame. A comparison of MICS 2006 with CYS 2008 using individual MICS-like basic deprivation indices reveals that the child deprivation situation generally improved during the period 2006-2008. However, at the provincial level, the comparison of composite child deprivation indicators shows that the situation in some provinces was worse in spite of the general improvement at the country level. Detailed investigation of changes in individual deprivation indicators produces many interesting findings: for example, more children attended school and mostly at younger ages; families took care of their children better, in terms of both educational care and living care; and children were generally less vulnerable to being orphaned, or having parents or adults who were suffering from chronic illnesses. The report concludes with discussions of some policy implications and possible further studies. Two policy implications stand out. First, policymakers must not concentrate their attention on monetary poverty only, as there are many MICS deprivation indices that are not correlated with monetary poverty (Figure 1). Second, budget allocation into geographical areas, such as at the provincial and the regional levels, should take into account the areas general deprivation situation as well as deprivation specific to those areas. As for possible further studies, the findings of the report

suggest that more detailed investigation should be conducted regarding those deprivations not related to income, and that more in-depth analysis is needed at the provincial level, as well as maeso analysis. To study the linkages between MICS/CYS nonmonetary deprivation indices with the traditional monetary poverty indices we need to combine the MICS/CYS data set with the income and expenditure household survey data. We chose the SES conducted by NSO because it is the flagship data set for calculating official monetary poverty in Thailand. The linkages are possible at the national, regional, and provincial levels. There are potentially many methods to examine the links between the number of primary sample unit (PSU)-level deprivation from MICS/CYS and income poverty from SES. An odds ratio was chosen to calculate the links because it is an easy-to-understand correlation index. For example, if there is some positive relationship between, say, a households use of solid fuels and income poverty, then income-poor households would be more likely to use solid fuels when compared with non-poor households. Figure 2 illustrates the poverty status of the frequency counts of households falling into these categories, as depicted by A, B, C and D. The ratio measures the relative probability of a family being deprived, which is the comparison of the deprivation probability when that family is poor against when it is not poor. An alternative interpretation can go the other way around: the odds ratio measures relative probability of a family being income poor, compared with the case when the family is deprived versus when it is not deprived.

Figure 1 Underlying causal factors of child poverty and deprivation

Monetary factor

Childpoverty and deprivation

Nonmonetary factor

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Figure 2 MICS 24 deprivation (use of solid fuels), by poverty level

Deprived

100 % 90 % 80 % 70 % 60 % 50 %

C A D B
po o r Poor
Not n o tpoor po or

n o Not t-d edeprived pr iv e d

de pr iv e d Deprived

MICSdeprived MICSnotdeprived SESincomepoor A B SESincomenonpoor C D

Thus, the odds ratio is computed as follows: Odds ratio = (A/B)/(C/D) If the odds ratio equals 1, then there is no probability difference of being deprived and being poor. If the ratio exceeds 1, then there is a high probability that a poor family is deprived, or that a deprived family is poor. When the ratio falls below 1, the probability relationship is reversed: a poor family is more likely to not be deprived, or a deprived family not poor. In the solid fuel example, 14 percent of the income poor households indeed used solid fuels while only 2 percent of the income non-poor households did. The odds ratio therefore is: (14/86)/(2/98) = 7.98. Translated, that indicates that the income poor households were about eight times more likely to use solid fuels than the nonpoor ones. In other words, deprivation of proper cooking fuel had much to do with being income poor. The two concepts thus relate quite closely.

household composite indices and provincial composite indices. The 20 matched variables were classified into six subgroups: 1. 2. 3. 4. 5. 6. Child health 1 indicator Environment 4 indicators Child development 6 indicators Education 5 indicators Vulnerable children 3 indicators HIV and AIDS 1 indicator

CHANGES IN CHILD DEPRIVATION DURING THE PERIOD 2006-2008 This section reports on changes in the child deprivation situation during the period 2006-2008, by comparing the indices from MICS 2006 with those computed from CYS 2008. The changes can only be done for the matched 20 deprivation indices. Two ways of making the comparisons are possible, one between composite indices of the two years; the other, between individual matched indicators. Changes in composite deprivation indices during the period 2006-2008 The procedure for computing composite indices is similar to what was done in the 2006 MICS survey. As shown in Figure 3, three levels of composite indices are computed, namely categorical composite indices,

The 20 indicator variables in CYS were further classified according to their correlations with income poverty, as explored previously with the MICS counterparts, as shown in Tables 2 and 3. Note that the positively correlated CYS indicators are classified by their MICS counterparts odds ratios (in relation to income poverty) equal to or more than 1.5, the reversely correlated CYS by odds ratios below 0.75 and the uncorrelated CYS by odds ratios between 0.75 and 1.5. The 1.5 and 0.75 thresholds, rather than a threshold of 1.0, was used to account for statistical errors. Criteria for determining the severity of the categorical composite indices are shown in Tables 4 and 5 and reflect the new classification of household composite indicators.

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Figure 3 Steps for constructing composite child deprivation indices

20indices Childhealth(1) Environment(4) Childdevelopment(6) Education(5) Vulnerablechildren(3) HIV/AIDS(1) Defineseverityin eachcategory Definecomposite indexat householdlevel Provincial deprivation

Table 2

Number of CYS-MICS deprivation indices, by correlation with income poverty

Positivelycorrelated 1 4 4 3 1 13 Uncorrelated 1 2 2 1 6 Reverselycorrelated 1 1 Total 1 4 6 5 3 1 20

Childhealth Environment Childdevelopment Education Vulnerablechildren HIVandAIDS Total

Table 3
MICS indices MICS24 MICS11 MICS12 MICS13 MICS95 MICS46 MICS47 MICS48 MICS49 MICS50 MICS51 MICS52 MICS54 MICS55 MICS56 MICS60 MICS75 MICS76 MICS78 MICS82

CYS-MICS indices and odds ratios of MICS indices with income poverty
Categories/description Childhealth Solidfuels Environment Useofimproveddrinkingwatersources Useofimprovedsanitationfacilities Watertreatment Slumhousehold Childdevelopment Supportforlearning Father'ssupportforlearning Supportforlearning:childrensbooks Supportforlearning:nonchildren'sbooks Supportforlearning:materialsforplay Nonadultcare Education Preschoolattendance Netintakerateinprimaryeducation Netprimaryschoolattendancerate Netsecondaryschoolattendancerate Femaleadultliteracyrate(age1524) Vulnerablechildren Prevalenceoforphans Prevalenceofvulnerablechildren Childrenslivingarrangements HIVandAIDS ComprehensiveknowledgeaboutHIVpreventionamongyoungpeople Oddsratio Oddsratiogroup (correlation) Positive Positive Positive Positive Positive Positive Positive Positive Uncorrelated Reversecorrelated Positive Positive Uncorrelated Uncorrelated Positive Positive Uncorrelated Uncorrelated Positive Uncorrelated

6.90 3.60 3.46 1.87 3.11 1.80 2.97 3.03 1.53 0.70 2.06 1.92 1.26 1.32 2.66 2.54 1.21 1.23 1.71 0.81

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Table 4

Nu umbers of MICS/CYS M ind dices and dep privation poss sibilities for each e category y
Category No.ofindice es 1 4 6 5 3 1 Pass/n notdeprived (12) (13) (13) (1) Fail Deprived (34) (46) (45) (23) Severe elydeprived

Childhealth Environment Childdevelopm ment Education Childvulnerab bility HIVandAIDS

Table 5

Cr riteria for ca alculating chil ld deprivatio on index at th he household level l

o.ofseverelydep prived No categories 3 12 12 0 0 0 34 02 46 13 0 No. N ofdeprivedca ategories N No.ofnotdeprive edcategories 02 34 02 35 6

Deprivationle evelforcomposit teindex Severelydepriv ved Moderatelydep prived Mildlydeprived d Notdeprived

g the criteria listed in Tab bles 4 and 5, the Using composite ch hild deprivatio on indices for r 2006 and 2008 were compu uted and com mpared. Figur re 4 reflects the distribution of household-level ch hild deprivat tion egion. There were w clear im mprovements over o indices, by re the two yea ars due to a smaller propo ortion of hou useholds falling g into the sev vere or mode erate deprivat tion category and d a larger pr roportion of those who were w mildly depri ived or had no n deprivation n. This was true t almost unifor rmly across al ll regions. As in the investiga ation into the child deprivat tion ng the MICS S survey in 20 006, it is alw ways situation usin hild deprivat tion index by region, 2006 6-2008 Figure 4 Ch

imp portant to be able a to identif fy geographica al areas where e the e problems we ere more serio ous, and/or wh here the problem ms were gettin ng more serious during the period 2006200 08. Regional distribution a as shown abov ve is certainly y not t very useful l. We therefo ore present th he household d com mposite depri ivation indices at the provi incial level in n Fig gure 5. The ge eneral improv vement in chil ld deprivation n at the regional level carries through to the t provincial l vel. There wa as a greater nu umber of prov vinces with a lev sm maller number of poor depr rivation indicators in 2008 8 tha an in 2006. However, th here are som me additional l fin ndings arising g from deta ailed investig gation at the e

100% 80% 60% 40% 20% 0% gBKK Bangkok BKK Bangkok South Central Northeast Central Northeast South Total North N th North Total

20 006

2008

Not deprive ed Not Depr rived

Mild dly deprived d Mil dly Deprived

Moderat tely deprived ed Moder ately Depriv

Severe ely deprived d Sever rely Deprived

Source: Calcu ulated from MICS 2006 and CYS C 2008. Thailand Developm ment Research h Institute.

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provincial level. For example, Mae Hong Son Province shows marked deterioration in child deprivation during the period 2006-2008. In 2006, the province did not make it into the top 10 most serious problems, but was ranked top in 2008. Closer investigation into individual MICS indicators shows that Mae Hong Son was worse in 14 of 20 indicators, indicating a more systematic deterioration rather than short-term limited effects.

The above finding about Mae Hong Son Province has a clear and powerful policy implication, as it once again emphasizes the inadequacy of using general improvement of child deprivation, as there are often areas suffering more from deprivation in spite of general improvement. More still needs to be done to ensure that these areas get the proper attention from policymakers that they deserve.

Figure 5 Provincial composite child deprivation index, 2006 and 2008

2006 2008

Weightedindex Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Provinces MaeHongSon BuriRam Nongkhai UdonThani Loei NongbuaLamphu Mukdahan KhonKaen ChiangRai SaKaeo Mahasarakham AmnatCharoen Yasothon Srisaket Phetchabun Nan Kalasin Surin LopBuri Phitsanulok

2008 25.27 24.42 21.91 21.44 21.12 21.07 20.98 20.84 20.84 20.80 20.64 20.63 20.59 20.50 20.50 20.08 20.06 19.99 19.90 19.75

Provinces Srisaket BuriRam Ranong Nongkhai Nan NongbuaLamphu Kanchanaburi Trat RoiEt Yasothon NakhonRatchasima SaKaeo UdonThani Kalasin Phichit MaeHongSon Yala Mahasarakham NakhonPhanom Kamphaengphet

2006 24.75 22.73 22.56 22.23 22.11 22.00 21.97 21.94 21.94 21.84 21.79 21.78 21.75 21.75 21.66 21.62 21.59 21.50 21.46 21.13

Source: Calculated from MICS 2006 and CYS 2008. Thailand Development Research Institute.

Thailand Development Research Institute

565 Ramkhamhaeng 39, Wangthonglang District, Bangkok 10310 Thailand Tel: 66 2 718 5460, 718 5678-89; Fax: 66 2 718 5461-62 Email: publications@tdri.or.th; Web site: http://www.tdri.or.th