Impact of Rainfall on Agricultural Growth in Thailand: Evidence in Farming and Fishing Activities

Abstract

Rainfall is related to economic growth. This is especially true for the agricultural sector which is a key food source. Rainfall has beneficial impacts in both arid and poor regions. Thailand, as an upper middle-income country according to the World Bank, has a tropical climate although rainfall varies between each region. Precipitation in the northern and northeastern regions is low while the southern region, as a narrow strip of land running north-south bordering the Andaman Sea to the West and the Gulf of Thailand to the East, has the highest rainfall. Agricultural product characteristics differ between regions. In arid areas, agrarian products are largely from farming while fisheries predominate in the southern region. The effect of rainfall on GDP growth was explored on a region-by-region basis using panel data from 2004 to 2015 at provincial level. The FGLS (Feasible Generalized Least Square) estimator was used in the regression models. Results showed that in northeastern and northern regions, rainfall stimulated economic growth in all dimensions of the agricultural sector and agricultural subsectors. The economic impact of rainfall played a major role in the fishing subsectors compared to the farming subsector. Overall, results identified the regions and agricultural subsectors that were economically profitable as a result of increased rainfall.

Keywords: Rainfall, Economic growth, Agricultural subsector, FGLS estimator, Panel data

DOI: 10.7176/JESD/10-16-19

Publication date: August 31^st 2019