Assessing the Economic Sustainability of Price Intervention Policies: Evidence from Thailand’s Cassava Market

Although many countries have reduced the use of agricultural price intervention policies, such measures continue to be applied intermittently by the Thai government. In the current work, which examines the cassava price intervention policy from 1981 to 2024 in Thailand through a supply and demand framework, the authors estimate a dynamic simultaneous equation model (DSEM) via the lag-augmented three-stage least squares (LA-3SLS) approach in order to measure the welfare effects of these interventions. The results indicate that the policy mainly redistributes welfare among market participants rather than improving allocative efficiency. Producers experience temporary income gains during intervention periods, but these gains dissipate once the policy is withdrawn, leaving long-run total surplus largely unchanged. When fiscal costs are incorporated, the intervention generates a net welfare loss, suggesting limited contribution to long-term economic sustainability. The findings suggest that policy approaches emphasizing income stabilization and productivity enhancement are more consistent with long-term welfare and fiscal sustainability than reliance on direct price controls, with direct relevance to SDG 1 (No poverty) and SDG 8 (Decent work and economic growth), highlighting trade-offs between income support, market efficiency, and fiscal sustainability in agricultural policy design. This study contributes by integrating a welfare-based dynamic econometric framework with sustainability assessment, which enables long-term welfare metrics for evaluating the economic sustainability of agricultural price policies.