By Rattaphol Onsanit
May 9 (Bloomberg) -- Kamolsak Thongta was working at a garage in northern Thailand when rice prices began to soar. So he quit his job, found a plot of unused land and became a farmer.
``With the price like this, I don't think this is a risky business,'' said Kamolsak, 46. ``Rice gives good return.''
That rush to profit from the global rice shortage may cause long-term pain for Thailand and world markets.
Farmers trying to cash in now are depleting water supplies set aside for the dry season, which may curtail yields by as much as 75 percent later this year, said Prasert Gosalvitra, head of the government's rice department. More intensive farming also may make paddies less productive in the future, knocking Thailand from its spot as the world's biggest rice exporter, he said.
``It is scary in the long term,'' said Apichart Jongskul, secretary general of the national Office of Agricultural Economics. ``There are impacts on natural resources like water and soil that should be taken into account.''
Thailand's benchmark fragrant rice rose to a record $1,228 a ton on May 7, after global prices more than doubled in 12 months.
That may prompt farmers to cultivate as many as 16,000 hectares (39,520 acres) of previously idle land, Apichart said. In addition, many growers plan to plant an extra crop this year.
``Farmers have been struggling to survive,'' Prime Minister Samak Sundaravej said during an April 22 press conference. ``Now they have the opportunity.''
Rice growers and their families represent a third of Thailand's 65 million people. Those who own their own land earn an average of 12,837 baht ($404) a month, compared with 33,088 for a Bangkok family, the National Statistics Office said.
Exports Rise
Thailand is the only major rice producer that hasn't curbed exports as the World Food Programme warns of a ``silent famine'' caused by spiraling food prices. India banned overseas shipments to control inflation, and Vietnam has limited planting.
Thai exports rose 36 percent from a year earlier in the first four months of 2008. The country may supply 45 percent of world exports this year, compared with 31 percent last year, the Commerce Ministry said.
Before the shortage, Thailand estimated it would produce about 20 million metric tons of milled rice this year and export about 9.5 million metric tons. The additional cultivation may increase output by 660,000 metric tons -- enough to supply Mexico's annual imports -- Apichart said.
The extra production may work against farmers, said Frederic Neumann, an economist at HSBC Holdings Plc in Hong Kong.
``Reports that Thailand may exceed production forecasts by a substantial margin are likely to cool prices from the current highs,'' Neumann said in an e-mail.
`No Time to Waste'
That didn't stop 87-year-old Prasert Rittithongchailert from replanting his paddy one month after harvest, instead of waiting the usual three.
``We have to plant the next round soon or we don't get this price,'' Prasert said, fanning himself with a straw hat as the sun beat down on his paddy 50 kilometers (31 miles) from Bangkok. ``There is no time to waste.''
Many farmers normally plant in two crops: the main one around mid-year and the second near year's end. Now, they're planting at least three times, which means dipping into water typically saved for the dry season that starts in November.
In addition, pests such as aphids are more likely to develop resistance to insecticides when farmers don't let fields rest, the rice department's Prasert Gosalvitra said.
``There isn't enough water in some areas but farmers are still going against nature,'' he said.
Guzzling Water
The Royal Irrigation Department said April 10 that reservoirs were at 64 percent of capacity, down from 71 percent a year earlier. Two weeks later, it warned against planting a third crop in two northern provinces, citing limited reserves.
Paddies are guzzling 20 percent more water than normal, said Theera Wongsamut, director general of the irrigation department.
``Even if we have average rain later this year, the water reserves will be below normal,'' he said. ``Next year, our rice production may fall as we already use future water.''
The state Bank for Agriculture and Agricultural Cooperatives expects lending to rise 25 percent to 250 billion baht this year on increased demand from rice planters, bank President Thiraphong Tangthirasunan said.
``They are buying equipment like water pumps as they are planting more while water supply is limited,'' he said. Farmers also are buying fertilizer, seed and pesticides, and trading in buffaloes for mechanized plows.
Kamolsak's five-hectare field was overrun by giant mimosa plants when he found it in January. Without knowing who the owner was, he plowed the land and put in a crop.
Two months later, owner Prasit Chooduang, 42, came by and was dumbfounded by the sight of bright green sprouts of rice. He waded through the knee-high plants and posted a sign telling the farmer to call him. Kamolsak did, and the pair agreed on a lease.
``Everyone is going after rice,'' Prasit said. ``Isn't it crazy?''
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