THE IMPACT OF PRODUCING PULP FROM KENAF ON EMPLOYMENT AND INCOME IN NORTHEAST THAILAND
Abstract
A new pulp mill for processing kenaf into paper pulp is under construction in the study region of northeast Thailand where cassava, sugarcane, and kenaf are the primary upland crops and generate a great amount of employment in the region. The pulp mill can utilize up to 200,000 tons of kenaf. The new pulp processing technology creates a new demand for kenaf (air dry kenaf). Farmers who produce air dry kenaf will use less labor in production since air dry kenaf uses less labor than the other upland crops. This study addressed the question of estimating the change in income and total employment of labor in the region as the technology is introduced. The consequences of alternative economic conditions in the markets for upland crops competing with air dry kenaf (cassava, kenaf retted fiber and sugarcane) and in the pulp market are explored. A regional perspective was required in order to determine the effects of various government policies and market scenarios. Conceptually, the components of the region included farms (the production sector), processing plants, transportation of sugarcane and air dry kenaf and the collection centers for air dry kenaf. A model of regional production using linear programming was developed and included representations of two upland farming situations in the study region. Using the model, a total of nine experiments were devised to analyze the effects of the new market for air dry kenaf on income and labor employment in the region. The nine experiments were: the base case, the effects of the inclusion of air dry kenaf market, cassava prices of lower and higher than the base case, kenaf retted fiber prices lower and higher than the base case, sugarcane prices lower and higher than the base case, and upper bounds on the off-farm work and nonfarm household work. The analysis generally suggested that with the inclusion of an air dry kenaf market the total employment of labor in the region decreased, but the total farm household income in the region increased due to nonfarm employment of the labor not used in production.
Degree
Ph.D.
Subject Area
Agricultural economics
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