Updated: 10:38 p.m. ET
Swaying rows of neatly planted rubber trees have become the latest political battleground in Thailand, as thousands of farmers barricade roads and railways for a second week to demand that the government subsidize low rubber prices. On Wednesday, hordes of enraged protesters blocked the main entrance to regional Surat Thani airport, popular with tourists visiting the famed Thai Gulf island of Koh Samui, prompting an angry response from the government. Blood has already been spilled with one protester killed and another injured during a confrontation with security personnel on Sunday, and the still escalating disquiet is being seen as an indictment of populist Prime Minister Yingluck Shinawatra’s Administration, as well as an avatar of the deep divisions that blight fractious Thai society.
Thailand is the world’s top exporter of natural rubber, but farmers complain weak global markets have hit them hard. Protesters have been demanding that the government guarantees prices of $3.7 per kg of “smoked rubber sheet” — around double the current local market price. “We, the farmers, cannot earn enough money to cover the cost of the farms,” Boonchot Romyen, a representative of rubber farmers from southern Thailand, told the Agence France-Presse. On Tuesday, the government upped its latest offer to $174 million — amounting to $97.8 per acre of rubber plantation to help with production costs, with extra funds set aside to increase the efficiency of mechanical processing.
Protesters remain unimpressed and have vowed to keep up the fight — currently affecting several southern provinces as well as the capital Bangkok — until Sept. 13 when as yet unspecified “further action” will be taken. Their steadfastness is born from the desire for parity with rice farmers in northern provinces who currently benefit from an $18 billion scheme — around 2% of GDP — to subsidize production after export prices for the grain plummeted. (The failure of prices to recover means 17 million tons of rice currently languishes in mills across the country.) Rubber farmers argue that the export value of their crop is $9.3 billion a year, compared with rice at $5.3 billion, and so they more than deserve an equivalent bailout.
The failure of the Yingluck government to acquiesce to these demands has been slammed by demonstrators as a political calculation. The vast majority of northern rice farmers are ardent Red Shirt (Pheu Thai Party) supporters of fugitive former Prime Minister Thaksin Shinawatra — Yingluck’s brother and party figurehead — while the southern rubber farmers tend to support the Shinawatras’ Yellow Shirt (Democrat Party) rivals. “There’s a perceived disparity between the government’s subsidies to its political base, many of them rice farmers, and the base of its foes — in this case, rubber farmers,” says Jonah Blank, a senior political scientist specializing in Southeast Asia for global-policy think tank Rand Corp.
Nevertheless, industry experts say any intervention would be counterproductive. The price of natural rubber has been declining since early 2011 because of weakening demand stemming from the global financial crisis. This has been coupled with an increasing supply of rubber from trees planted five to 10 years ago — production has leaped from 1.6 million to 3.8 million tons over the past two decades — as well as the resurgent U.S. dollar. (In fact, these conditions have similarly afflicted many other commodity prices.)
Prachaya Jumpasut, managing director of the Rubber Economist analyst firm, who has more than three decades of experience in the global rubber industry, tells TIME that the “best way to help is by strengthening the rubber-manufacturing-product sector, so that the excess rubber can be used internally and help to reduce the surplus as well as increase foreign-exchange earnings.” Subsidizing rubber, he warns, could encourage increased production and so “may push natural rubber prices down even further.”
The paramount Tokyo Commodity Exchange rubber contract jumped 3% this week on the back of China’s factory activity expanding at its fastest pace in more than a year. In Thailand’s southern Nakhon Si Thammarat province, however, exporters claim that distribution systems disrupted by the industrial action have delayed thousands of tons of urgently needed Thai rubber shipments for up to two weeks.
This has emboldened accusations that Yellow Shirt extremists have hijacked the rubber protest for their own cause of ousting the Pheu Thai Party, although these claims have not gained much credence with analysts. “I don’t really think the Yellow Shirts are behind the rubber protests exclusively,” says Josh Kurlantzick, senior fellow for Southeast Asia for the Council of Foreign Relations. “I think the Yellow Shirt movement is kind of dying out, and never had that much power anyway.”
Nevertheless, protest attendance has been high — lying somewhere between the 12,000 cited by police and the “tens of thousands” organizers claim. And tempers are also inflamed, with coffins bearing the names of Yingluck and Agriculture and Cooperatives Minister Yukol Lim-laemthong burned by the baying crowds. Deputy Prime Minister Pracha Promnok responded to the targeting of Surat Thani airport by saying officials would not hesitate to use force if necessary. “Under no circumstances will we accept it if they shut down the airport,” he told reporters on Wednesday. “This will ruin tourism not to mention the country’s image.” Despite the current blockade, flights continue to arrive with tourists using an alternative access route.
The good will and election votes garnered through subsidizing rice was deemed a calculated risk by the Pheu Thai Party, and the botched scheme continues to sap the nation’s coffers. But now with rubber farmers demanding equal treatment, and parallel noises emerging from the nation’s similarly afflicted palm-oil plantations, those all-conquering manifesto pledges are bouncing back to sting the embattled Prime Minister.