The New Theory aims at self-sufficiency for farmers to a reasonable extent, in keeping with the overriding principle of moderation, the Middle Way. They are not meant to turn back to an ancient way of life, in which individuals provide for themselves in every aspect. Instead, farmers are empowered by means of producing enough food to sustain themselves, while benefiting from basic trading of produce and production factors to their full potential. They are encouraged to organize themselves as groups for enhanced bargaining power and efficiency in marketing and trading with outside parties, with mutual trade benefits.
His Majesty the King succinctly explained the philosophy of Sufficiency Economy for the first time in his royal address to well-wishers on the eve of his birthday anniversary on 4 December 1997, in this remark:
By sufficiency, we do not mean that each family must produce its own food, weave its own clothes. That is just too much.
His Majesty gave a further explanation in his royal address on the same occasion of the following year, on 4 December 1998. He provided a guideline for the implementation of the Sufficiency Economy:
This Sufficiency Economy can be implemented for only half, not the entire economy. Even one fourth is good enough, not one fourth of the area, but one fourth of the action.
This implies that the implementation of Sufficiency Economy need not cover the economy of an entire country, which is impossible. Should one family or one village turn to Sufficiency Economy entirely, it would be like taking backward steps to the Stone Age.
Faculty members of the Faculty of Economic Development, at the National Institute of Development Administration, in 1999 conducted a study on the New Theory pertaining to economic development. The main thrust of the New Theory was shown to correspond with the theories of several thinkers and theorists in economic development in the West. The three phases of the New Theory, for instance, are interlinked as the progression in economic development from a subsistence economy to commercialization, in line with various economic development theories.
Moreover, the New Theory corresponds with the theory of trade and economic development put forward by Myint (1958), which described the transformation from a subsistence economy to commercialization through the expansion of production from subsistence level to the production for sale or export outside the locality and the country, to distribute excess produce not needed for consumption.
The New Theory concept of transferring resources to be invested in the building of water sources and a central water supply system to distribute water to farmers means the transformation of resources into capital for farmers, to increase their productivity, which corresponds with recent economic development theories that place the emphasis on creating economic growth in tandem with fair income distribution. Such a transfer of resources as "capital" for the poor may adversely affect national economic growth as a whole, but will contribute to fair income distribution in the long run, with increased productivity seen among the poor who benefit from the capital.
The increase of capital for farmers in the form of water sources enables them to grow crops the whole year round, easing the problems of underemployment, disguised unemployment, and seasonal unemployment, while enhancing productivity on land for cultivation that is under-utilized because of a lack of complementary factors, particularly water, which prevent their limited land areas from being fully utilized. In the end, the productivity of the land and farm labor is enhanced as a result.
The allocation of part of the farmland for the digging of a pond is a sacrifice of land for cultivation in exchange for water, an essential factor for agriculture. The digging of a pond represents an investment in water to replace the land. As a consequence, however, yields from the remaining land area can be doubled. Farmers can regulate water to ensure steady growth of their crops, reducing their dependence on rainfall.
Surplus farmhands that became unemployed in the dry season would be able to find plenty of work all through the year, with the maintenance of the water pond, fish breeding, and plant protection and nurturing. Therefore, with existing land and labor, production can be increased and diversified, with enhanced quality and added value.
The New Theory aims at self-sufficiency for farmers to a reasonable extent, in keeping with the overriding principle of moderation, the Middle Way. They are not meant to turn back to an ancient way of life, in which individuals provide for themselves in every aspect. Instead, farmers are empowered by means of producing enough food to sustain themselves, while benefiting from basic trading of produce and production factors to their full potential. They are encouraged to organize themselves as groups for enhanced bargaining power and efficiency in marketing and trading with outside parties, with mutual trade benefits.
His Majesty the King succinctly explained the philosophy of Sufficiency Economy for the first time in his royal address to well-wishers on the eve of his birthday anniversary on 4 December 1997, in this remark:
By sufficiency, we do not mean that each family must produce its own food, weave its own clothes. That is just too much.
His Majesty gave a further explanation in his royal address on the same occasion of the following year, on 4 December 1998. He provided a guideline for the implementation of the Sufficiency Economy:
This Sufficiency Economy can be implemented for only half, not the entire economy. Even one fourth is good enough, not one fourth of the area, but one fourth of the action.
This implies that the implementation of Sufficiency Economy need not cover the economy of an entire country, which is impossible. Should one family or one village turn to Sufficiency Economy entirely, it would be like taking backward steps to the Stone Age.
Faculty members of the Faculty of Economic Development, at the National Institute of Development Administration, in 1999 conducted a study on the New Theory pertaining to economic development. The main thrust of the New Theory was shown to correspond with the theories of several thinkers and theorists in economic development in the West. The three phases of the New Theory, for instance, are interlinked as the progression in economic development from a subsistence economy to commercialization, in line with various economic development theories.
Moreover, the New Theory corresponds with the theory of trade and economic development put forward by Myint (1958), which described the transformation from a subsistence economy to commercialization through the expansion of production from subsistence level to the production for sale or export outside the locality and the country, to distribute excess produce not needed for consumption.
The New Theory concept of transferring resources to be invested in the building of water sources and a central water supply system to distribute water to farmers means the transformation of resources into capital for farmers, to increase their productivity, which corresponds with recent economic development theories that place the emphasis on creating economic growth in tandem with fair income distribution. Such a transfer of resources as "capital" for the poor may adversely affect national economic growth as a whole, but will contribute to fair income distribution in the long run, with increased productivity seen among the poor who benefit from the capital.
The increase of capital for farmers in the form of water sources enables them to grow crops the whole year round, easing the problems of underemployment, disguised unemployment, and seasonal unemployment, while enhancing productivity on land for cultivation that is under-utilized because of a lack of complementary factors, particularly water, which prevent their limited land areas from being fully utilized. In the end, the productivity of the land and farm labor is enhanced as a result.
The allocation of part of the farmland for the digging of a pond is a sacrifice of land for cultivation in exchange for water, an essential factor for agriculture. The digging of a pond represents an investment in water to replace the land. As a consequence, however, yields from the remaining land area can be doubled. Farmers can regulate water to ensure steady growth of their crops, reducing their dependence on rainfall.
Surplus farmhands that became unemployed in the dry season would be able to find plenty of work all through the year, with the maintenance of the water pond, fish breeding, and plant protection and nurturing. Therefore, with existing land and labor, production can be increased and diversified, with enhanced quality and added value.
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