Evaluating the Rice-Pledging Scheme in Thailand from a Free Market Perspective

Abstract Thailand’s rice-pledging scheme of the Yingluck Shinawatra government is a policy which has been widely criticized by both the opponents and the supporters of this scheme. After operating this scheme for almost 3 years, the problems derived from this policy have been emerging continuously. This paper has an objective to evaluate the rice-pledging scheme in Thailand during the production years of 2011/12 and 2013/14. The framework used in this evaluation consists of the characteristics of a free market economy such as limited governance, price mechanism and perfect competition to mention a few. Also, the paper provides an analysis of the impact caused by the inconsistency between the policy implementation and the characteristics of free markets. The author will also discuss the failure of the rice market in Thailand which may cause the market mechanism to lack efficiency in terms of resource management and, therefore, fail to accomplish various targets of the rice scheme in Thailand. Also, this paper will suggest an approach to solve the problems regarding the failure of the rice market and of the development of Thailand’s rice industry.