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The strategic role of the private sector in agriculture and rural development - Thailand
 

The strategic role of the private sector in agriculture and rural development - Thailand

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Join IFAD and the Global Donor Platform for the launch of the report: The strategic role of the private sector in agriculture and rural development. Jonathan Mitchell (ODI), lead author of Platform ...

Join IFAD and the Global Donor Platform for the launch of the report: The strategic role of the private sector in agriculture and rural development. Jonathan Mitchell (ODI), lead author of Platform Knowledge Piece 3 will be joined in his presentation via video by the authors of the Tanzania, Thailand and Vietnam country studies: Frédéric Kilcher, Wyn Ellis and Pham Thai Hung. A Question and Answer session will follow each discussion point.

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  • Growing concentration at all levels, particularly in the retail and processing sectors;Shortening / rationalization of supply chains – large-scale retailers / manufacturers relying on specialized procurement channels and dedicated wholesalers;Shift to higher value products, specialization (e.g. organics) driven by global demandPrivate sector standards for food quality and safety;‘Professionalization’ of farming;Increasing farm size as firms seek economies of scale in production, food manufacturing, marketing, distribution;Transactions / production increasingly arranged through use of contracts;Food increasingly channelled via formal sector retail outlets, such as supermarkets, rather than being sold informally in local wet markets or wholesale spot markets

The strategic role of the private sector in agriculture and rural development - Thailand The strategic role of the private sector in agriculture and rural development - Thailand Presentation Transcript

  • Thailand country studyWyn Ellis – Novia Consulting Group 28 March 2012
  • Structure of presentation1. Subsectors covered by the study2. Key trends3. Private sector response4. Current interventions / lessons learned5. Donor strategies6. Conclusions2
  • Value chains studied1. Rice2. Chickens3. Horticulture4. Cassava5. Rubber6. Sugarcane(All strategically important either as domestic staples or asexports)3
  • Key trends1. Commodity-based support policies2. Restructured supply chains driven by expansion of modern trade retailers (domestic / overseas)3. Contract farming based on private safety / quality standards4. Emerging interest in organic / GI / Fair Trade markets4
  • Private sector responses in agricultureMain sources of investment• Domestic agribusiness conglomerates• International retailers• Institutional investors (e.g. IFC)Recent changes in value chains• Food increasingly channelled via formal sector retail outlets• Growing concentration at all levels• Shortening / rationalization of supply chains• Shift to higher value products• Private sector standards for food quality and safety• ‘Professionalization’ of farming / increasing farm size• Contract farming5
  • Current interventions- summary Macro-level interventions to improve enabling environment Intervention Main lessons • Commodity-based support policies • Need integrated policy-making based on economic rationale • Current policies adversely impact export competitiveness • Rice pledging scheme • Distributional impacts of policies favour business, hurt farmers, increase inequity • Distortion of cropping systems Direct financial assistance to business • BOI incentives (tax exemptions and holidays for • Agribusiness, not farmers, are the prime beneficiaries overseas food industries) • BAAC credit scheme for farmers • Large farmers dominate among beneficiaries • IFC US$70 million financing package for Saha • Need for investors in contract farming operations to focus Farms group to expand poultry operation on equity for small farmers Market development • OTOP scheme aimed to help SMEs • Mkt development should be demand-driven and requires closer linkages with real markets • Food safety standards initiatives • Strengthen control systems / surveillance / traceability to strengthen international credibility Dialogue & partnership with business • TCC/FTI are govt’s de facto dialogue partners • Broader, genuine consultation processes needed6 Source:
  • Donor strategiesPolicy dialogue• Structural adjustment programmes• Policy reform to enhance coherence and tackle rural inequity• Re-examine land and water policy• Reform public sector research programmesMarket development• Facilitate market access, credit for smallholders• Incentivize private sector engagement with smallholder producers• Minimize market distortions and perverse incentives affecting the poor• Implementation of safety, quality and ethical standards• Institutional reform- support producer groupsFinancial assistance to businesses• Social venture capital to boost grassroots initiatives supporting smallholders• Specific assistance to strengthen competitive position of small farmers• Finance for income diversificationDialogue /partnerships• Strengthen stakeholder consultation processes• Encourage private sector partnerships to promote technological innovation / upgrading among smallholders7
  • Conclusions & challenges• Agribusiness continues to flourish, though agricultural competitiveness is declining• Policy environment distorts markets, promotes inequity• Restructured supply chains marginalize small producers, impact rural economy• International donor community has a role at both policy and grassroots levels in addressing inequity, market linkages and access to knowledge, technology and finance for smallholders8
  • Policy, institutional reform and governance - key tolong term competitiveness Isvilanonda (2012)