The Impacts of Cabbage Importation on Cabbage Production in Thailand

Abstract

This paper investigates the impacts of a rising trend of cabbage import after the ACFTA  enacted. A system of cabbage demand, supply and harvested area equations are estimated using   yearly data between 1998 and 2015 and the Generalized Method of Moment (GMM) estimation. The results reveal that an increase in cabbage import quantity will significantly reduce the domestic price, harvested area, and output supply. Using the producer surplus as a welfare measurement, our calculation shows that Thai cabbage farmers will lose money of 131.219 million Baht for each percentage increase in cabbage import quantity. In the short run, production subsidies might be needed to alleviate the harmful effects on the farmers. However, in the long run, the food safety standards for imported cabbage should be established and used as a non-tariff barrier and consumer protection. Besides, the government should support the farmers to improve their production process and product quality, so that they can compete sustainably against the import.