Rationale
The New Theory is the most distinct and concrete example of the application of the Philosophy of Sufficiency Economy to the agricultural sector. His Majesty King Bhumibol initiated this theory to help Thai farmers who suffer from the impacts of economic crisis, natural disasters and other unproductive natural conditions.
The New Theory suggests that farmers apply the essential principles of the Philosophy of Sufficiency Economy, namely moderation, due consideration and self-immunity to their practice of farming as this would shield them from the risks and impacts of globalization and other uncontrollable factors in their farming.
The Risks and Impacts of Farming
Price fluctuation of agricultural produce and commodities as a result of modern economic development
Unproductive conditions such as dry spells and droughts
Natural disasters such as flooding and epidemics
The patterns of production such as plant diseases and pest problems, lack of manpower, debts, and loss of land
His Majesty believed that if the farmers acted with due consideration based on knowledge of past price fluctuations of agricultural commodities they would see how risky it is to concentrate all one’s resources in such commodities expecting large profits. And if they adopted the principle of self-immunity, they would prepare for price changes in the market by producing enough to eat as a priority and only then think of selling any surplus.
New Theory: Integrated and Sustainable Agricultural System
In a more tangible sense, His Majesty developed the New Theory as a system of integrated and sustainable agriculture, embracing his thoughts and efforts in water resource development and conservation, soil rehabilitation and conservation, sustainable agriculture and self-reliant community development. The aim is to optimize farmland.
Key Formula
In tune with the Philosophy of Sufficiency Economy, His Majesty introduced the unprecedented approach to manage farmland. Efficient water management was also developed to ensure year-around farming. To adopt the New Theory agriculture, farmers are advised to follow these three steps:
Phase I
Farmland Division for Optimum Benefits
The land is divided into four parts with a ratio of 30:30:30:10.
The first 30% is designated for a pond to store rainwater during the rainy season while during the dry season it serves to supply water to grow crops and raise aquatic animals and plants.
The second 30% is set aside for rice cultivation during the rainy season for the family’s daily consumption throughout the year to cut down on expenses and allow the farmers to be self-reliant.
The third 30% is used for growing fruit and perennial trees, vegetables, field crops and herbs for daily consumption. If there is any surplus, it will be sold.
The last 10% is set aside for accommodation, animal husbandry, roads and other structures.
Phase II
Communal Agriculture
After the first step has been realized, the farmers are encouraged to form groups or cooperatives to carry out farming and agricultural activities in the following areas:
Production (plant species, soil preparation, irrigation, etc.)
Farmers must cooperate in the production of crops, starting from preparing the soil, obtaining plant species, fertilizers, water supply, etc. for cultivation.
Marketing (rice drying space, silos, rice mills, the sale of crops)
When the rice crops are harvested, there must be preparations in many areas to gain the highest profits from them: preparing a common drying space, silos, rice mills, as well as cooperating in selling the produce to obtain good prices and cut down on expenses.
Living conditions (fish paste, fish sauce, food, clothing, etc.)
At the same time farmers must maintain a certain degree of proper living with sufficient basic requisites such as food, fish paste, fish sauce, and clothing.
Welfare (public health, loans)
In each community there should be necessary welfare and services, such as a health center in time of sickness or a fund providing loans to be used to carry out activities in the community.
Education (schools, scholarships)
The community should play an active role in promoting education, for example, setting up an education fund for children in the community.
Society and religion
The community should be the center for social and mental development, with religion as the binding factor.
All the aforementioned activities must receive cooperation from all parties concerned whether government or private sector, as well as members of the community.
Phase III
Loan and Credit Outreach
After the second phase, the farmers should move into the third phase by making contacts with banks or private companies to obtain funds to assist with investment or developing their quality of life. In this way, both farmers and banks or private companies will gain mutual benefits as follows.
- Farmers can sell their rice at a high price (since they are not forced to sell cheaply)
- Banks or private companies can buy rice for consumption at a low cost (by buying paddy directly from the farmers and milling it them themselves)
- Farmers can buy consumer products at a low cost since they buy them together in large quantities (from cooperatives stores at a wholesale price)
- Banks or private companies are able to disperse their personnel to carry out various activities for better results