| The objective of this study is to examine the impacts of agriculture-led development on economic growth and income distribution in Thailand using computable general equilibrium (CGE) analysis. The scope of the analysis includes three production sectors (agriculture, industry, and services), two types of labor and capital (agricultural and nonagricultural), and two household groups (rural and urban).;Agriculture-led development is defined in model specification as simultaneous increases in agricultural productivity and government investment in agriculture, and a reduction in export taxes. Using base period (1980) data in simulations, agriculture-led development stimulates agricultural growth and overall economic growth in all three models. Income distribution shifts in favor of rural households in Models II and III, and against rural households in Model I.;In contrast, when world prices for agricultural commodities are assumed to be lower than in the base period, agriculture-led development sustains agricultural growth, but in all three models income distribution shifts in favor of urban households. Alternatively if world prices for agricultural commodities are assumed to be higher than in the base period, then again this strategy increases economic growth, but income distribution shifts in favor or rural households in the three models. The results of the simulation shows that an agriculture-led development strategy was plausible for Thailand under the conditions prevailing in the early 1980s.;Three CGE models were designed. Model I is neoclassical with full employment of labor. Model II assumes a fixed nonagricultural wage leading to unemployment of labor. Model III incorporates an under-utilization of nonagricultural capital into Model II. Data were organized within social accounting matrix (SAM) framework. Each model was calibrated to base period data, and then subjected to individual and multi-step combined simulations for various policy scenarios. |
