The Economic Crisis and Rural Households in Thailand : Impact and Response

Abstract

As a consequence of the economic crisis in early 1997, one of the most prominent and urgent problems was unemployment. There were reports of almost two million migrants having to return to their villages of origin in the Northeast, besides those seeking refuge in the urban "informal sector." Certainly, this would create great pressure on rural households, not only in terms of the reduction of their off-farm income, but also in having to bear the burden of unemployed family members. Adding to the crisis was a weakened baht value that caused a hike in the cost of consumable goods and agricultural inputs, thus affecting rural households and communities as a whole. This paper aims to reveal how the economic crisis impacted on rural households; and how they coped with it; as well as to what extent the agricultural sector could accommodate the returned labor force. To explore these issues a qualitative approach with three main concepts was used for the analysis: (1) agricultural base of households, (2) necessary dependence on external resources, and (3) social networks. From the empirical cases in four villages that varied in terms of agricultural and non-agricultural resources within and in their vicinity, the paper shows the impact rural households received varied in terms of degree and diversity depending on their existing agricultural resources and dependency on external resources. Three groups of households were classified based on the degree of impact created by the economic crisis: those least affected, moderately affected, and strongly affected. In relation to how the crisis affected each type, these households also reflected different degrees of coping with the crisis, ranging from households needing no adjustments to households still unable to adjust. Their differing coping mechanisms were based on social networks that could be kinship or non-kinship based in nature. It was also found that the agricultural sector supporting the returned labor could be considered as direct and indirect, and closely related to households and village agricultural resources. However, most returned migrants preferred to do off-farm work. Their decision making concerning agricultural or off-farm activities depended on their skills, capital and social networks.