Effects of Rice Subsidies on the Thailand Harvard Case Solution & Analysis

Effects of Rice Subsidies on the Thailand Case Study Solution

Analysis

Thailand is one of largest producers of the rice in the world. Since, the Thailand has historical relation with the agriculture industry, and the agriculture industry consists of 50% of country’s employment. Furthermore, the recently risen prices of the rice in the international market,have attracted the government to benefit from the gap between the demand and supply, which has risen the prices of the rice.

Indeed, the recent Thai government,which had been toppled by the military coup, due to the allegations creating distrust among the farmers.By defaming the name of the country into the international market. Because the government has created a program, in which it contracted the Thai farmers to purchase the rice over 50% high prices than in the international market.

So, the intention was to increase the demand gap in the international market by cutting the supply. Consequently, the prices of the rice would rise, and then the government could sell the rice in the international market with huge prices, and meet with its promise with the farmers. However, it can be determined, that country have taken big risk in creating the demand in the market by cutting the supply.

Because government had failed to realize many other countries such as the India, Vietnam has also reduced the production of the rice, and they also have restricted to export the rice with an intention to keep balance the supply and demand in the domestic market. Because the shift in demand could be the result of declined supply, so the prices in the domestic market would have to increase.

However, the Thailand government in contrast, contracted the farmers to purchase the rice over 50% high then international markets, and government also influenced the farmers to increase the production.So the government had made a huge stockpile of rice in its stores, in anticipation that prices in the international market would rise by blocking the supply.

Effects of Rice Subsidies on the Thailand Harvard Case Solution & Analysis

 

However, the scheme totally went unfulfilled since the prices in the international market did not rise, because the India and Vietnam were filling the demand-supply gap into the international market. Consequently, prices could not be stimulated to rise. Furthermore, it can be determined that demand and supply in the market is a natural phenomenon,which occurs naturally on the demand and supply required by people.............

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Effects of Rice Subsidies on the Thailand

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