The Impacts of Aging Society on the Agricultural Total Factor Productivity of Thailand

Abstract

This study aimed to examine and forecast the impact of the aging society on the total factor productivity of Thai agriculture by using the Stochastic production frontier analysis with unique constructed farm-level dataset. The study mainly used the data obtained from the survey of socioeconomic, household, and agricultural labor conditions from the crop years 2010/2011 to 2019/2020 collected by the Office of Agricultural Economics. We found that the aging society had a negative impact on the agricultural total factor productivity of Thailand. As a result, when the proportion of aging agricultural workers to all agricultural workers in farmers' households increased by 0.01 on average, the agricultural total factor productivity declined about 0.0367 percent. In addition, the study found that large-scale farm households were mostly affected by the aging society, followed by small-scale farm households and medium-scale farm households, respectively. The study predicted that by 2029, the higher level of entry into an aging society will lead to an average decline of 0.88% in the total factor productivity of Thailand's agricultural sector. However, the development of other factors, such as access to irrigation system, increase in education level, increase in non-agricultural income, participating as members of farmer’ institutions, and increase in farm diversification, will contribute to the improvement of total factor productivity in the agricultural sector. Nevertheless, the study also revealed that the difference between the maximum and minimum temperatures had a negative impact on the total factor productivity of Thailand's agricultural sector.