The mechanisms of corruption in agricultural price intervention projects: Case studies from Thailand

In Thailand, agricultural price intervention has recently been under severe criticism for its ineffective management and proneness to corruption. This study focuses on the mechanisms of corruption and how such destructive activities might be minimized. Case studies of three well-known crops in Thailand, namely paddy, cassava, and shallots, were utilized as the main investigative tool. Findings suggest that government price intervention programs generate significant economic rents for various stakeholders (i.e. farmers, millers, warehouse owners, exporters, etc.). To deal with this problem, the magnitude of economic rents should be curtailed through strict quantity limits and monitoring needs to be enhance both through better human resources and integrated information technology. In the long term, such blunt intervention projects should be replaced with more sophisticated, market-oriented risk management techniques, and strict information transparency must be ensured.