Agriculture plays a significant role in economic growth and development, especially in the
beginning stage of the transformation to an industrialized nation (Southworth & Johnston,
1967). In this regard, Johnston and Mellor (1961) state that, in developing countries, 40 – 60%
of the national account is from agriculture and that employment in agricultural production is
typically 60 – 80% of the labour force.
Thailand, an agricultural country, was expected to become a newly industrialized country
(NIC) by the 1990s because of its positive economic growth rate since 1960. However, the
1997 Asian financial crisis delayed that transformation. Thailand’s Gross Domestic Product
(GDP) grew gradually from 133,336 million baht in 1951 to around 500,000 million baht in
1971 (see Table 1.1). It rose dramatically to 3,095,041 million baht the year before the 1997
Asian financial crisis. The export growth rate slumped to its lowest level since 1986, the
financial sector (the stock market and some financial institutions) collapsed and, more
importantly, the Thai baht depreciated (Pasuk & Baker, 1998). Because of the crisis, the GDP
growth rate actually declined in 1997 for the first time (0.72%) and in 1998 (10.51%).
However, the GDP increased from 1999 at 4.45% from 2,871,980 million baht to 3,851,295
million baht in 2005 (Table 1.1).