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Rethinking the Role of the Agricultural Sector in the Thai Economy and Its Income Distribution: A SAM Analysis

Thaiprasert, Nalitra (2004): Rethinking the Role of the Agricultural Sector in the Thai Economy and Its Income Distribution: A SAM Analysis. Published in: Forum of International Development Studies , Vol. August, No. 27 (August 2004): pp. 187-212.

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Abstract

The Agricultural sector has played a significant role in the Thai economy. It has been an engine of Thai industrial growth in the past. Its various kinds of good-quality agricultural produce and its strong comparative advantage are globally well-known. However, Thai agriculture has been devitalized since the 1980s and its population has been excluded from the country’s rapid development and growth opportunities. The bias of government policies has been the main cause of the depressed agrarian conditions. This paper investigates potential for reviving the role of the agricultural sector in the Thai economy and improving its income distribution, using a Social Accounting Matrix(SAM)for analysis. It studies how stimulations of the Thai agricultural sector would affect the Thai economy and its income distribution compared to the manufacturing industrial sectors. Results from the policy simulations show clearly that agricultural and agricultural-processing sectors in Thailand have higher potential to increase domestic production through linkage or multiplier effects compared to that of manufacturing industrial sector. The agricultural and agricultural-processing sectors also have better potentials to generate more income to different households, to create better income distribution, and to induce more savings in the country.

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