Urban farms have been touted in the west as the next step in urban development. Rooftop farms and community gardens offer an opportunity to create green space where only concrete existed before.
The produce feeds the neighborhood, neighbors are afforded a chance to build communities and cities become a little bit more sustainable.
“Urban farms are wonderful and it is being incorporated more and more into architecture and city planning,” said Nate Baquero, an urban planner working with the Minnesota State Government.
“You’re not only create green space in a city but if done right it can help alleviate problems of wastewater, of empty decaying lots and contribute to the local economy,” he told Thai Enquirer.
But western models of urban farming do not necessarily apply to the situation in Thailand.
Here, urban farms have been perverted by large landholders as a way to avoid taxes and increase real estate prices.
Legal loophole
According to the Land and Building Tax Act, which came into effect at the start of 2020, the tax on land and buildings used for agricultural purposes shall be subjected to a tax rate not exceeding 0.15 per cent of the tax base.
This is significantly less than land that is left empty or unused which is subjected to a tax rate not exceeding 1.2 per cent of the tax base.
The first law was designed to help the agricultural sector and alleviate the tax burden on farmers. The second law was passed to penalize large landholding companies and families who buy land and leave it unused hoping that the price would appreciate.
Large landholders, seeing an opportunity to minimize their tax liability, have begun turning their large real estate holdings into makeshift farms including plots within downtown Bangkok.
The most expensive lime in the world
That is why just a stones throw away from Bangkok’s Asoke Montri road is a lime plantation that seems out of place.
Judging by the real estate prices in the CBD, these lime trees could be worth millions.
There are examples like this popping up all over Bangkok.
Two empty plots of land around 50 rai in size around Ratchadaphisek that belongs to Laemthong Corporation and the Wittayakorn family is also now full of lime and banana trees.
The land is worth about 1 million baht per square meter or 10-20 billion baht per plot. The land used to be empty a month before the new land tax came into effect in January.
Under the new law, the tax rate for the land would have been 0.7 per cent of the land’s total value per annum.
Now that it is “farming land,” that rate is down to 0.1 per cent.
Further tax avoidance
Some profiteering owners have even taken a step further and re-zoned their land, allowing farmers to rent the land to build small plantations.
By doing so, the landowner is allowed to push their tax burden onto the farmers working the land.
These legal loopholes allow large landholders to continue amassing real estate and speculating on prices without having to pay a heavy tax burden.
Not that they’re repentant either.
“Of course we are planting farms as a way to avoid tax,” said one heiress with a 10 rai plot in Bangkok’s Ladprao road.
“But at least now the land is being put to use, we’re creating produce. Otherwise it would just sit empty like it has for the past ten years.”
