Re-regulating Labor and Market through Trade Liberalization in Agriculture

1. Regional Academic Seminar "Changes and Challenges in Greater Mekong Sub-region” 17-19 January 2008 Re-regulating Labor and Market through Trade Liberalizationin Agriculture MIYAKE Yuki RCSD, Faculty of Social Sciences, Chiang Mai University

2. Introduction • Running after the late-20th century’s Western trend, Thailand has rushed negotiation and conclusion of bilateral Free Trade Agreements (FTA) with several countries including China since the beginning of the 21st century.

3. Thai FTAsProgress * Implemented as Early Harvest Scheme

4. Why Trade Liberalization? • Trade liberalization: One way of practice of neoliberalism. • Neoliberalism: A process of deregulation. • In agricultural sector, it is a challenge against trade barriers, domestic subsidies for farm products, and government intervention through such as restriction of chemicals. Thai Merit of FTA with China • - Economic welfare = revitalization of domestic economy through trade liberalization.

5. Argment against Neoliberalism • Neoliberalism is discourse. • It in fact increases re-regulation and control of local by the state and market.

6. Objectives 1. To show how trade liberalization under neoliberalism imposed new regulation on small-scale farmers in terms of both production system and labor process. 2. To show the complex and diverse response to it by local farmers.

7. Case Studies Trade liberalization of garlic in Thailand • Garlic is most affected product by FTA in a negative sense. • After FTA with China, cheaper Chinese garlic (1/3 price of Thai garlic) flowed into Thai market. • Thai government provided 12,000 baht of monetary compensation for the cancellation of garlic production. • The local farmers response: Receive and not receive.

8. Research Site • Sii Dong Yen sub-district, Chai Pra Karn district, Chiang Mai province in northern Thailand. Because Chai Pra Karn is one of the most garlic producing district in Thailand.

9. Garlic production area size and amount of garlic production of region in 2005 Source: Office of Agricultural Economy www.oae.go.th (cited by interior report by Focus on the Global South)

10. Garlic production area size and amount of garlic production by province in 2005 Source: Office of Agricultural Economy www.oae.go.th (cited by interior report by Focus on the Global South)

11. Garlic production area size and amount of garlic production by district in 2005 Source: Office of Agricultural Economy www.oae.go.th (cited by interior report by Focus on the Global South)

12. Research Site • Sii Dong Yen sub-district have grown garlic as a cash crop for more than 30 years…

13. Outline of Presentation 1. Theoretical Background of Trade Liberalization: From Regulation to De-regulation of Market and Labor • Introduction of a Case: Thai FTA with China 2. Trade Liberalization as Re-regulating Process • A case study 3. New Regulation as Contested Space

14. 1. Theoretical Background of Trade Liberalization: From Regulation to De-regulation of Market and Labor • 19th century economy • Neoclassical economy  • Keynesianism   • Neoliberalism 

15. Theoretical Background of Trade Liberalization

17. A Case Study: Impact of Thai FTA Gainer • Tapioca producers (export to China) • Automobiles and its parts sectors (lose with China but gain from export mainly to Australia) • Shrimp and seafood sectors (to various countries) • CP Group Loser • Garlic producers • Diary farms sectors

18. Garlic Price Change Price (baht/kg) Source: Office of Agricultural Economy www.oae.go.th (cited by Kingkorn 2006)

19. 2. Trade Liberalization as Re-regulating Process

20. Globalization is a Political Project • Under WTO, the Agreement on Agriculture (AoA) promotes deregulation by reducing trade protection, farm subsidies, and government intervention.  The world agricultural product price fell by 30 % or more. • Agribusiness has grown  The small-scale farmers went bankrupt. = Globalization is a political project (McMichael 2004)

21. Trade Liberalization as Re-regulating Process • WTO: Re-regulation than deregulation (Harvery 1990) • Flexible accumulation increased insecurities in financial sector.  Government intervention • In agro-food sector, TNCs have come to regulate production and consumption = ‘Private global regulation’ (Friedman 1993)

22. Various Processes of Re-regulation • Competition under market mechanism. • ‘Food insecurity’ Food control by the developed countries or TNCs, and ‘re-colonization’.  Regulates and disciplines farmers. • Quality control (QC): Regulation at the local level. And cam emphasize power relations.

23. A Case Study: Trade Liberalization of Garlic and Re-regulation

24. Re-regulation by market mechanism • Before 1950s or 60s: Self-subsistence or small selling  Capitalist economy  Global market competition under globalization • Today, small-scale farmers are vulnerable and have to be rigid and to discipline themselves.

25. Re-regulation of Labor by Quality Control (QC) • Quality control is found also in the garlic production process, in the process of post-harvest product processing. • In order to compete cheap Chinese garlic, importance of QC is increasing. • Power relations among local producers and traders or consumers.

26. Sorting the cloves as quality control. - Need to be sorted by size and quality for selling.-

27. Government Support Scheme with ‘Conditions’ 1. Monetary compensation 12,000 baht per rai for the cancellation of garlic plantation (2005-). 2. A guarantee of garlic price at 18 baht in 2005 and 12 baht in the next year of 2006. [Conditions] • No future growing garlic in the reported land plot. • New crops should NOT be shallot, onion, tangerine orange, longan, and litchi.

28. Decrease of Garlic Planted Area Source: Office of Agricultural Economy www.oae.go.th (cited by interior report by Focus on the Global South)

29. Contract Farming is also Re-regulation Process • Thai government also recommended contract farming in stead of “instable” garlic production. However… • Production system is strictly regulated. • Farmers easily take subordinate position to the companies, and are controlled and regulated by them.

30. Re-regulating Labor: Increasing Feminization in Garlic Processing • Lastarria-Cornhiel (2006): Due to high competition among agri-business firms to reduce costs, agribusiness corporation employs women with low-wage, long-hour working. = Feminization of labor under post-Fordism = Re-regulating process • This is applicable to garlic processing.

31. Breaking the bulb into a small cloves for selling or for seeds.

32. Tying good-looking garlic bulbs up again in a beautiful way as decoration for sale.

33. Impact of Falling Prices on Wage Laborers • The piece rates is changed in line with the fluctuation of the garlic prices. • The middle-woman: “When the wholesale price of garlic is bad, I have to buy garlic at a lower price from farmers, pay lower wage for processing to decrease costs, and yet face difficulty in selling because the price is low everywhere.

34. Problems of piece-work job under flexible accumulation • Both seasonal and temporary, insecure, uses long-hours, under unhealthy conditions, pays low wages, and comprises mainly unskilled labor. • Decrease in wage, especially after trade libealization.  Discipline and control labor. • To sum up, thanks to such positive and yet exploited and flexible female labor, agro-food commodity in Thailand is kept price low.

35. 3. New Regulation as Contested Space • Look at actors with anthropologist approach.

36. New Regulation as Contested Space: Diverse Responses by Farmers Toward the government recommendation of cancellation of garlic production • Some followed. • Some have not follow but tried to survive by themselves. (Both continued to grow garlic and stopped it.) • Some pretended to follow, received a monetary compensation, and yet continued grow garlic in practice. • Some stopped growing garlic a part (such as 2 rai), received compensation for it, and continued growing garlic for the other. • Some stopped plantation for a few year, received a money, and come back to grow garlic again after that.

37. Diverse Response by Farmers * Reason of not following • Did not like given conditions by the government (prohibit 6 crops). • The 12,000 baht of compensation is not enough. * Reason of continuation of growing garlic • Do not know what they should grow instead of garlic. • The garlic price may regain in the future. After all, there is no way to control or regulate people as such in a top down manner although it works to some extent.

38. A Symptom of Monopolization of Garlic Plantation • Farmers who own land tend to continue growing garlic, while farmers who rent land stop growing garlic. Some farmers who continued growing garlic expanded the area of garlic plantation by newly renting a land plot from others.

39. Female Labor are also not passive but positive • Garlic processing makes small wage, but sometimes can make up to 200 baht in a day (cf. A normal daily wage in agriculture: 120 baht/day for women). Give motivation. • Women’s narration: Garlic processing is an exclusively female sphere, because “men cannot do this kind of detailed and sensitive job.” Female laborers are much positive than passive in making money through the piece work.

40. Conclusion • Trade liberalization under neoliberalism is not increasing profit for people based on the comparative advantage but rather increase the state and market control of small-scale producers through new regulation by the state and market mechanism. • By doing so, they promote uneven development. • However, local people are also constantly negotiating and contesting such a large structural flow coming down from the top. • The neoliberal idea is also embedded into local practice.