The origins of Thailand’s current political tension lie in the dilemmas of this transformed fiscal relationship. State investment, combined with wide-ranging support for the tenure of small-holders, has enhanced agricultural income and has created numerous sources of non-farm employment agencies. However, the overall impact of this state support for rural Thailand has been to help develop and maintain a middle-income peasantry rather than fundamentally transform it. The government’s performance on agricultural productivity has been lackluster by the standards of many of its regional neighbors and, more importantly, it has had limited success in developing non-farm rural enterprise. As a result, the government’s massive investment in the rural economy has help to maintain a large rural population that, despite significant livelihood improvements, is insufficiently productive to fully meet the aspirations that economic growth has aroused. Political activity in rural Thailand is not driven by an impoverished peasantry that is staging a rearguard action against dissolution, but by a middle-income peasantry that is assertively negotiating the terms of its persistence. Political society, rather than civil society, is the primary site of mobilization for this middle-income peasantry