Feasibility of Group Risk Income Protection Insurance for Para Rubber in Thailand

Abstract

The study investigates a promising sustainable crop-insurance risk mitigation plan, namely, Group Risk Income Protection (GRIP) insurance, for the cultivation of Para rubber, a crop for which Southern Thailand constitutes over half of the national harvested area, but which recently experienced a shift in prices and yields, substantially affecting farmers. The research takes as its starting point historical data covering the 2001-2018 period for this crop's cultivation in three of Thailand's Andaman South Coast provinces – Trang, Krabi, and Phangnga. The results indicate that, from a relatively high base in 2001, Trang's yields dropped sharply before a more gradual decline (apparently still ongoing), whereas those for Krabi and Phangnga followed a smoother downward trajectory throughout the period. Meanwhile, prices everywhere rose steadily before falling from 2011 onwards – a decrease that shows no signs of abating. The yield/price relationship was negative for one province and slightly positive for the other provinces. Furthermore, all provinces’ Para rubber income initially grew continually but fell after 2011, with this trend seemingly persisting to this day. The paper's findings suggest that, after early moves to entrench GRIP insurance, it looks set to become a feasible option for Para rubber, making policy agreement details an interesting subject for subsequent investigations.