There’s another drought happening throughout Thailand and this doesn’t bode well for consumer spending upcountry.  Here’s some information that we’ve been able to put together.

Cause? 

• Massive deforestation in north was the fundamental cause as this has resulted in the lack of rainfall, especially in the North, where most reservoirs are situated.
• Specifically, at least 26m rai (4.2m hectares) of forest land, especially forests in the mountainous North, had been denuded.

Situation Today?

• The major dams are quite dry. Current rainfall was mostly concentrated in the South, where there were fewer reservoirs.
• The drought was most severe in the central region.
• The current water reserve is enough for 3.4m rai, which means that the remaining 3-4m rai of farmland in the central region will face a water shortage.

Solution(s)?

• The government would promote greater use of water from artesian wells.
• Artificial rain is to be created in areas with reservoirs.
• The general public was urged to save water.
• Farmers have been urged to switch to corps that need less water.
• A new strategy is to be developed to tackle deforestation in watershed areas.

Economic impact?

• In order to save water, farmers have been urged to cut or minimize the second crop (Nov-Apr). Note that after the main rice crop is harvested, Thai rice farmers with access to irrigation often grow a second or off-season rice corp.
• Farmers were asked to delay their first rice corp (from Apr).
• This year, in addition to the drought, farmers have already been hit by low rice prices. They have high household debt.
• Power generation could also be affected.