What Kind of Farmer Isn’t Afraid of Falling Rice Prices?

 Rice Prices Fall, Varieties Lost

Before telling this story, let me set the scene. Thailand is the world’s second-largest rice exporter, yet selling rice has grown increasingly difficult: a sharp rise in US tariffs has hit sales of Thailand’s premium jasmine rice, and India’s resumption of rice exports has intensified international competition. In early 2025, the average price of Thai paddy fell by around 30 per cent compared with the same period the previous year, at just over 2,000 yuan per tonne.

Amid overproduction and fierce internal competition, many local rice varieties have also vanished. Northeastern Thailand is the country’s main grain-producing region. Historically, it relied on farmer-saved seed and local varieties, which were well adapted to local ecological conditions, required little in the way of new technology or inputs, but had lower yields and limited commercial appeal. From the late twentieth century onwards, as part of a government-led drive towards agricultural modernisation and market integration, high-yield varieties developed by international and government agencies spread rapidly through agricultural extension stations and subsidy programmes. In particular, improved varieties suited to local conditions gradually displaced traditional farmer-saved seed. In 2000, 43 per cent of farming households were still growing local traditional farmer-saved varieties; by 2009, that figure had fallen to 11 per cent.

Smallholders sit at the bottom of the value chain, with the rice variety they grow determined by international market demand and policy subsidies. Thailand’s export market pushes farmers towards two options: either grow varietal purity-certified, high-value-added soft glutinous fragrant rice for export to the United States, or grow high-yielding hybrid ordinary long-grain rice for export to the Middle East. And when competition in the export rice market heats up, farmers cannot simply switch to other varieties overnight. To take one example: although Thai jasmine rice commands a premium price, it is highly dependent on the rainfall and light saline-alkaline soils of northeastern Thailand, and being a photoperiod-sensitive, low-yielding, late-maturing variety, its output is subject to considerable fluctuation. Most smallholders simply do not have the conditions to grow it, and must barely make a living by steadily increasing the yields of their own varieties. This means investing more in labour and inputs while experiencing diminishing marginal returns.

Is this a vicious cycle? One village in Thailand shattered our pessimistic assumptions.

Farmers Can Collaborate on Breeding, Too

In late September 2025, we joined our Southeast Asian partners who work on environmental and community issues to visit Khok Sa-at village in northeastern Thailand (referred to hereafter as K Village), where we found a group of farmers who grow no export varieties, operate on no scale, and yet still live well.

In K Village, the villagers use organic manure in place of chemical fertilisers and pesticides, persist in saving and breeding their own old rice varieties, and rely entirely on hand sowing and harvesting. Set against the logic of industrialised, capital-intensive, large-scale modern agriculture, K Village looks like a textbook case of a pre-modern agricultural society. Yet we found that not only have they not been displaced by the commercial world, they face no survival pressure at all. Without getting dragged into the mainstream market’s competitive grind, yet still turning a profit – just what methods have they actually used?

K Village sits more than 70 kilometres west of the Mekong River. It is a traditional farming village, well known in the area for its conservation of old local rice varieties. A young man in the village, Aew, became an environmental journalist after his studies and has travelled widely. More than a decade ago, after learning that Thailand has over 5,000 rice varieties, he began collecting old seed from farmers in the northeast. The first year, Aew gathered only five rice varieties; the next year the number grew to over a dozen, and over time he has collected more than 250 varieties from across the various provinces of the northeast.

Conserving old rice varieties is far from as simple as collecting seed. Aew also mobilised farmers in his own village to start saving and breeding their own seed. Members of the rice group observe which varieties tiller well – a single grain can produce 10 to 20 tillers (in some cases up to 60). They examine the tillering characteristics of each panicle – for instance, whether the grains are densely packed, whether the spacing is even, whether the panicle shape is attractive – in order to select high-yielding varieties. The village now has a public paddy field owned by the local church, which everyone has turned into a trial plot, growing more than 200 native rice varieties. The entire field is jointly tended, as volunteers, by the 15 members of the breeding group. Members exchange techniques with one another at the Farmer Field School and, through repeated trials, transplant the varieties they favour and find well suited to their own paddy fields. Over the past seven years, the breeding group members have also been developing a signature K Village variety with the help of a local research institution; it is expected to be ready for release in about three years.

We were fortunate to taste both small black rice and red rice in a single meal – both are well-known old local varieties. The small black rice grains are relatively short; even after cooking they largely retain their shape, have a chewy bite, and are so fragrant you could eat them plain. The red rice, once cooked, is softer and fluffier, easier to digest, and provides a counterpoint to the green papaya salad (som tam) that is so punishingly spicy it feels like your soul is leaving your body. Compared with irrigated rice, the rainfed crop may have a lower yield, but its flavour is actually more intense.

Can Old Seed Alone Bring a Bumper Harvest?

But can this seemingly idyllic, pastoral way of life – growing only old rice varieties – actually make money?

Besides not having to buy seed from outside each year, K Village has two further advantages: land and labour.

Take land first. In Thailand, more than 40 per cent of farmers do not own their own land and must rely on renting it to farm. These farmers grow three crops of rice a year, yet at the end of the day their income still falls short of their costs – inputs such as seed, pesticides, fertiliser, and machinery leave them heavily in debt.

K Village’s advantage is that the land is owned by the villagers – some of it passed down through generations – and that well-established water management systems are in place. Local farmers are well acquainted with the natural ecology of the area and can select varieties suited to the local climate. Right beside the paddy fields that cover the whole village stretches a dipterocarp forest; its extensive root systems retain water, reduce soil erosion, and regulate runoff. K Village’s land is dryland, and each year the villagers can grow only one crop of rice, during the well-watered months of May to October. In the low-lying areas they plant varieties with many panicles, a long maturation period, and high water requirements; on the hillsides they grow upland rice varieties with a shorter maturation period but relatively fewer panicles. I have heard of similar practices in the mountainous regions of Yunnan. The rice relies on rainfall, ponds, or stored water from reservoirs for irrigation – there is no need to divert water, dig wells, or excavate canals. Once the rice is harvested, the climate turns relatively dry, and farmers rotate to pumpkins or other crops with lower water demands, rather than forcing a second crop of rice.

Now, on to labour. Once Thai rice farmers began growing standardised varieties for export, the peak farming season demanded higher-density, higher-intensity work. Tasks such as rice transplanting, spraying, and harvesting gradually came to be carried out by specialised farm-machinery service teams. Farming work gradually shifted from a household chore that had to be done in-house to a market service that could be purchased.

However, K Village still follows traditional cultivation methods and does not require the high-density seasonal labour that modern monoculture agriculture demands. They do not need to hire outside workers; during peak season, members exchange labour with one another. At the same time, the rice group does not buy pesticides or chemical fertilisers from outside – they use plastic dummies to scare off sparrows and their own cattle manure as fertiliser.

Without the pressure to chase yields, and free from the burden of repaying debts or paying rent, it is far easier for farmers to practise diversified cropping. No need to worry about land rent, no need to purchase agricultural inputs – the cost of rice production can be extremely low. With low input costs, it is not so difficult for everyone to grow old varieties using ecological methods.

The Role of the Credit Cooperative

However, low production costs alone do not guarantee that the project will be profitable. Why, after getting a taste of what this approach offers, do farmers still choose to grow low-yielding old varieties with narrow sales channels, when the most stable option on the international market is “Thai jasmine rice”?

This brings us to the question of whether there is enough money. Unlike a typical rural enterprise, the Hom Dok Hung Rice Cooperative (hereinafter referred to as the cooperative) was established with the support of K Village’s credit cooperative (hereinafter referred to as the credit cooperative). More than 40 years ago, when the credit cooperative was first founded, it had only 17 members. Today, it has nearly 3,000 members from 21 nearby villages, with total assets exceeding 117 million baht – approximately over 23 million yuan.

It is worth explaining the relationship between an agricultural cooperative and a credit cooperative. Both are organisations in which members pool capital, share returns, and participate jointly in decision-making. An agricultural cooperative’s operations centre on cultivation, sales, and processing of agricultural products. A credit cooperative primarily provides financial services such as savings, lending, and payment settlement. In K Village, the Cooperative and the Credit Cooperative are nominally independent, but there is considerable circulation of funds and personnel between them.

Thailand’s first agricultural cooperative was established in 1916 to help rice farmers who were deep in debt during the early stages of agricultural commercialisation. Today there are nearly 2,000 cooperatives across Thailand, most of them agricultural in nature. Although cooperatives are numerous, credit cooperatives account for only 9 per cent of them. Most farmers have to turn to the Bank for Agriculture and Agricultural Cooperatives (BAAC) to meet their lending needs.

A credit cooperative differs from an ordinary bank in that it does not prioritise profit maximisation or shareholder returns. In other words, the Credit Cooperative’s earnings are not channelled into high-risk investments but are converted into a common fund, a risk reserve, or distributed as year-end dividends to members. While offering loan interest rates more favourable than those of commercial banks, K Village’s Credit Cooperative pays a deposit rate of 3.75 per cent (compared with 0.75 per cent at a typical commercial bank). The Credit Cooperative’s president has even wanted to raise the deposit rate further, but the government has not agreed. On top of this, the Credit Cooperative maintains a dedicated welfare fund to provide condolence payments to members who have lost a family member and interest-free loans to households in difficulty.

Meanwhile, the Rice Cooperative’s profits are deposited back into the Credit Cooperative. The movement of members’ assets is highly transparent and controllable, forming a circular ecosystem of fund flow.

However, a credit cooperative like this is not something that can be established just anywhere; it is also deeply intertwined with local culture. Urban residents long ago entrusted their personal safety and financial affairs to the government, financial institutions, and insurance companies. In K Village, by contrast, community leaders still command genuine authority. For the older, more conservative farmers of K Village, borrowing and financial management are unfamiliar concepts. The Credit Cooperative’s growth to its present scale would have been impossible without the pastor who has encouraged everyone to take part.

Eighty per cent of the villagers here are Christian (the remaining 20 per cent are Buddhist, but everyone gets along well, working and living together). According to the Cooperative’s president, Christians are frugal and hardworking, and the education of the next generation and village solidarity are both factors in the Cooperative’s success. In terms of lifestyle, they bear some resemblance to American Mennonite communities – both are creating a small sanctuary of their own, set apart from the mainstream world.

The Village 7-11

“For the collective good” is no joke here. Maximising how much of every baht stays in the community requires action on multiple fronts. There is no restaurant, no entertainment venue – let alone a wet market – just a supply and marketing cooperative mini-market that has been open for more than 50 years.

The president proudly told us that people joke about calling this mini-market the village’s “7-11” precisely because the villagers resist the encroachment of chain enterprises. It feels the same as my experience in rural western America. Locals believe that chain stores, with their enormous scale and formidable price-setting power, not only squeeze out existing businesses but also funnel the hard-earned income from agricultural sales to distant corporate headquarters.

“The Village 7-11” operates on a membership system, with shares allocated on principles of fairness – essentially a consumer cooperative. Each family can purchase equal shares based on the number of people in the household, and profits are returned to members at year-end in proportion to their shareholding. The mini-market sells everyday necessities, buying and selling at market prices, then returning the profits to the community, forming a self-contained circular economy. Villagers are both shareholders and customers.

By the time we arrived it was the end of the month. Although the shelves hardly qualify as well-stocked, the basics are there, and prices for daily essentials are broadly the same as at convenience stores in Bangkok. There was soap (apparently it still works out cheaper to buy than to make their own rice-bran soap), laundry detergent, hair dye, cola, ice cream, and so on.

After Dispatching the E-commerce Parcels

Back to the Cabin for a Wood-Fire Meal

Farmers do more than work in the fields; they are responsible for the entire value chain, from seed selection to sales.

The organic rice is packaged in elegant small portions, highlighting the distinct texture and health benefits of each variety. Meanwhile, the broken rice, rice germ, and rice bran separated out during processing can be turned into raw materials for making shampoo bars – cutting the cost of shampoo bottles while also eliminating unnecessary plastic waste. The villagers have realised that even simple processing can add real value to the by-products of rice production.

A single grain of rice being turned into products like rice wine and soap at its place of origin may not sound remarkable, but without selling to first- or second-tier middlemen – instead shipping directly to urban consumers through e-commerce logistics – the share of profit that reaches the farmers naturally increases.

Consumers who prioritise health, the environment, and social justice are strong supporters of K Village cooperative’s business model. Their organic rice sells for twice the price of comparable products on the market. A Thai celebrity has even volunteered to promote it.

The collective economy is exemplified to the fullest in K Village’s rice cooperative, and it does so without relying on sales volume or government policy support. To sum up, the reasons come down to a few key points.

First, the Rice Cooperative was incubated by the local Credit Cooperative; its initial capital was the savings of the villagers themselves. Social relationships are directly embedded in the financial system, creating a very solid foundation of trust on both sides, with loans serving members directly. Second, the rice group, as the entity that generates revenue, distributes dividends according to Credit Cooperative shareholdings, enabling profits to grow and circulate within the community. Third, the cooperative’s rice bypasses conventional procurement channels and connects directly with the premium market. Achieving all this requires the combined contribution of a healthy ecological environment, well-developed financial institutions, and strong social cohesion.

However, not all Thai rice farmers are in a position to grow old varieties and command a good price the way K Village’s farmers do. In Thailand, high-yield rice and the lowland jasmine rice favoured by international markets still dominate. Meanwhile, international organisations, governments, and foundations are pouring tens of millions of dollars into the research and promotion of “climate-friendly” rice. More rural areas remain heavily in debt, with no internal financial system in place. Most rice farmers are still waiting for policy support from Bangkok, striving for bargaining power, and hoping rice prices will rise.

But in K Village, growing rice is not just about the contest between yield and procurement price; it is also about dignity, a sense of achievement, and the right to choose. Before we left, we briefly visited a family living among the trees. They live in a few simple wooden structures that barely qualify as houses; pots, bowls, and pans are laid out on bamboo racks outside, and they cook over an open fire every day. The eldest sister lifted the wooden lid off a large jar under the tree; I switched on my torch, peered in, and saw it packed full of loaches. Chickens scurried about beneath the tree, crabs scuttled in a plastic tub, and two idle local cattle stood under the cow shed. Tens of millions in net assets have not been enough to pull the villagers out of the world they know. Our vision of “a life of abundance” is still far too narrow.

– This is Foodthink’s 807th original article –

All photographs in this article are by the author unless otherwise noted.

Editor: Auntie Xiong

Layout: Minglin

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