Political and Economic Impacts of the Price Intervention Policy on Longan (in Thai)
Pakapon Saiyut and Charuk Singhapreecha, Ph.D.
This article analyzes the performance of the longan price intervention policy by using the rate of forfeiture, the revenue loss to the government, and the change in farmersí income. The study includes an analysis of the policy formulation process and its effect on the policy performance. During year 2002-2004 the government lost 90.98% of its total intervention investment. Farmersí income increased merely 23%. Some of the budget was transferred to interest groups particularly by means of stealing the farmersí right. A number of factors ranging from inappropriate policy instruments to opportunistic behavior, contributed to poor policy performance and the tendency towards graft and corruption. Direct deficiency payment (the difference of target price and market price) to farmers would reduce the complicated procedures, which tended to generate corruption. Using this measure, farmers would likely get more benefit.
Keywords: price intervention policy, longan, political economics, decision-making process of economic policy
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