Floods in the North and Northeast and Central regions, and a drought at the start of the planting season damaged the harvest of significant crops, particularly rice.

The trend for the agricultural economy in 2003, measured by real gross domestic product, indicated improved growth of 3.88% to 378.55 billion baht, compared with 364.39 billion baht in 2002, said Adisak Sreesunpagit, secretary-general of the Agricultural Economics Office (AEO).

The 1.3% growth rate for the sector in 2002 was lower than the 2.88% target set in the Ninth National Economic and Social Development Plan. In 2001, the country recorded 6.17% growth in the sector, mainly from big gains in exports of shrimp and chicken.

Mr Adisak said the seeds for improvement in 2003 were actually sown in 2002, as many farm product prices began to rise, stimulating farmers to increase production.

The palm forest of Kam Chanode in Udon Thani province. Major crops like rice, rubber, palm oil, soybeans and tapioca fetched higher prices in 2002 because of increasing demand.

The AEO foresaw no severe natural disasters in the coming year so it projected growth in all segments, except forestry-related ventures, he said.

Mr Adisak attributed the below-target growth in 2002 to floods in the North, Northeast and Central regions, and a drought at the start of the planting season that had damaged the harvest of significant crops, particularly rice.

As well, external factors, especially trade restrictions related to food safety and hygiene, had severely affected exports of Thai fishery products and poultry.

Plant production rose 1.41% from 2001 as the floods and the drought trimmed output.

Paddy production was almost two million tonnes below last year's harvest, accounting for 32% of total GDP in the sector, a fall of 5.29%.

Production of tapioca and palm oil was also greatly reduced, resulting in planters receiving higher prices for the crops.

Crops with higher production included sugarcane, vegetables, fruit and rubber.

The livestock sector grew by only 0.83% in 2002 because of the continuous reduction in the raising of buffaloes.

Chicken production was hurt by the European Union's detection of banned chemicals in Thai products exported to Europe and false reports that Thai chicken might have been exposed to feed containing the bacteria linked to mad cow disease.

The poultry segment contributed around 30% of GDP in the farm sector

The AEO forecasts 2% growth in 2003 following the effective handling of the chemical residue problem and Thai authorities success in persuading the European Union to ease its zero- tolerance inspection regime.

Rubber growers in Nakhon Si Thammarat wait for Prime Minister Thaksin Shinawatra, who visited the provience early in August for a rubber seminar. A banner saying: "One kilogramme of rubber for one dollar" was put up at the venue.

Growth in the fishery sector fell by 1.13% in 2002, mainly because of problems with shrimp exports since the beginning of the year.

Problems ranged from the detection of chloramphenicol in Thai shrimp by the EU, the discovery of lead in shrimp heads, the incidence of disease in some farming areas and dumping accusations by American farmers.

This sector is likely to record 2.58% growth in 2003.

Growth in the forestry sector fell by Legal logging currently takes place only on state-managed plantations and in some private reforestation projects.

However, logging is playing a diminishing role as production of wood- replacement materials rises.

Growth in the forestry sector is expected to fall by 2.77% in 2003 due to a reduced supply of logs.

Agricultural services also reported a fall in growth of 0.54%, largely because there was less use of labour in line with the decrease in available farmland for the second paddy crop and sugarcane harvest.

The segment is forecast to expand by 1.27% in 2003.

The GDP in primary farm processing rose by 4.85%, mainly because of the many initiatives to add value to farm products promoted by the government under its One Tambon, One Product and Village Fund programmes.

The segment is forecast to grow by 3.76% in 2003 due to continuing promotion.

Mr Adisak said generally major crops like rice, rubber, palm oil, soybean and tapioca received higher prices in 2002 because of increasing demand.

Prices declined for crops including sugarcane, green beans, cotton, jute and several fruits as a result of higher production.

Ajva Taulananda, the chairman of the Thai Chamber of Commerce, said the prices of many crops had recovered to levels that allowed farmers to cover their costs and make modest returns.

Rubber prices averaged 30 baht a kilogramme while the price of cassava root was over one baht a kilogramme.

Workers at Mahachai show off the catch of the day late in October. The first phase of the expanded market, which has the largest trading piers in the country for fish and shrimps, opened on Nov 11.

Rice exports, meanwhile, were poised to exceed seven million tonnes after the government signed a co-operation pact with four other major rice exporting countries, initially through information exchanges.

Participants insist the programme is not an Opec-style cartel as the aim is not to control prices but to improve returns to farmers through better control of production.

Dr Ajva said the growth of the farm sector in 2003 would depend on government policy and whether it could negotiate with China to lower import tariffs on Thai farm products.

Although China has been meeting its World Trade Organisation commitments and reducing tariffs on farm products to an average of 20% from 40%, many non-tariff barriers remain.

Dr Ajva said that if the government was successful in negotiating the relaxation of import regulations and procedures, Thailand was likely to expand its fruit markets in China.

Thai rambutans, jackfruit, durians and mangoes are expected to find a large market in China as purchasing power continues to rise.

Thailand will be able to export more fragrant rice to China, which was committed to taking 3.9 million tonnes of rice imports in 2002, increasing to four million tonnes in 2003.

Thailand estimates that its rice exports to China will be 500,000 to one million tonnes.

The export outlook for Thai shrimps and chicken is likely to improve in 2003 because the government has taken a proactive role in solving problems related to chemical residues.

New barriers spring up