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Assoc.Prof.Juthatip Patrawart
Director of Co-operative Academic Institute (CAI)
March 28, 2016
Nontri 1 Room, KU Home, Kasetsart University
Thailand´s agriculture sector, Agriculture Cooperatives
and other Farmer Organizations situation and
perspectives on the AEC
ASEAN Learning Route on Agricultural Cooperatives : “Strengthening the
Role of Agricultural Cooperatives to Address the Challenges and
Opportunities of the ASEAN Economic Community for the Benefit of the Smallholder Farmers”.
Current situation of socio-economics development
in Thailand.
Roles of co-operatives, and related agencies
for developing the agricultural sector in Thailand.
The new challengers: The Strategic direction for
Thai agricultural cooperative .
1
2
3
Outline of Presentation
• Thailand is considered a
land of opportunities,
with our strategic
geographical location at
the heart of ASEAN
region, great network of
connectivity, and a
business-friendly
atmosphere
• We are also an upper
middle income economy
and the 2nd largest
economy in ASEAN
Current situation of socio-economics development in Thailand.
Current situation of socio-economics development in Thailand.
• Throughout the century, the agricultural cooperative development in Thailand has been
developed continuously.
• The agricultural production is replaced by the manufacturing production.
• Currently the production’s proportion of manufacturing sector is accounted approximately
90% of GDP, while the production’s proportion of agricultural sector is accounted only, 10%
of GDP
• Thailand is rank one of the tenth in agricultural and food export to the world market
• Since 2004 the government has launched the “Thai kitchen to the world” policy
with the aim to create a global presence for Thai Cuisine and food products and to
support SMEs.
• Thailand is strength as the world’s 12th largest exporter of food products lies in
food safety and food security.
• Recently, the
uncertainly and
fluctuation of world
economy have effected
to most sectors in Thai
economy, particularly
manufacturing sector.
• Thai government
attempted to increase
the importance of
agricultural and service
sector.
Current situation of socio-economics development in Thailand.
Potential 2020 Vision for Thailand
Transformation from commodity supplier to branded, high value-added economy
Strategic Focus
" What Thailand
should be known
for"
Strategic pillars
"How Thailand
should operate"
Foundation
"What Thailand
needs to have"
High quality & wide access to social services
Sufficiency & sustainable resource management
High quality physical & technological infrastructure
Prudent fiscal & monetary policy
Open
economy
with high
social
mobility
Culture of
tech/
entrepreneur
-ship&
excellence
Coordinated
cluster
economy
system
Knowledge
& creativity
based
communities
World-class
work ethics
&
governance
High
value-added economy
World's food supplier
Leader in creative products
Magnet for cultural & eco-tourism
high-value added services
Regional logistics hub
1
2
3
4
Transformation towards sustainable, higher value economy
National agenda is key to drive transformation
Thailand Today
Commodity products
OEM focus
Basic infrastructure
Basic use of rich cultural
heritage in commercialization of
products and services
Thailand 2020
Higher value-added products
Branded products
Higher-quality physical and
technological infrastructure
Cultural tourism and heritage-
based product
commercialization
• Add value
• Build brand
• Invest in
infrastructure
• Leverage Thai
heritage
Thailand’s vision (for 2015 and Beyond)
• Since the first cooperative of
Thailand was establish in 1916
due to the government attempted
to alleviate the debt problem of
Thai farmers.
• According to the Cooperative Act
B.E. 2542, there are 7 types of
co-ops in Thailand.
Agricultural Co-ops.
Consumer Co-ops.
Services Co-ops.
Thrift and Credit Co-ops.
Credit Union Co-ops.
Fisheries Co-ops.Land and Settlement Co-ops.
Roles of co-operatives, and related agencies for developing
the agricultural sector in Thailand.
• According to the Co-op. Act B.E. 2542, the minister of MOAC is a chairperson of NCDSC
• NCDSC has responsibility to develop the policy and the national development plan.
• CLT is the national apex org. of co-op. movement.
• ACFT, FSCT, CULT are national co-ops.
• The myriad org. supporting to the co-op. movement such as
- CPD, CAD, BAAC, CDF, CAI etc.
Co-operative Movement Structure
Current Situation of Co-op. Movement
• 7,043 Co-ops.
• 11,470,013 Individual Members (18% total pop.)
• Agri. Co-ops. : Non Agri. Co-ops. (54% : 46%)
Roles of co-operatives, and related agencies for developing
the agricultural sector in Thailand.
Type of Business 2011 2012 2013
Saving and deposit 1,900.62 2,106.61 2,344.37
Credit 2,886.22 3,200.90 3,856.37
Purchasing 1,663.34 1,892.54 2,221.00
Marketing 3,460.48 3,773.91 3,393.34
Other services 15.41 17.10 17.69
Total Business Volume 9,926.08 10,991.06 11,832.77
Growth Rate (percentage) 25.32 10.73 7.66
Business Performance of cooperative in agricultural sector during 2009-2013
(Unit: $Million dollars)
Source: Cooperative Auditing Department, 2016
• The main business of Agri. Co-ops. are
- Savings & deposit, Credit, Purchasing, Marketing
• Total asset in Agri. Co-op. $ 6,059 million
• Credit Business $ 15,602 million
• Saving & Deposit $ 14,507 million
• Purchasing $ 13,894 million
New Strategic Framework for Evolutionary Development Process of SEE (2013-2015)
The new research
theme during this
period will be “The New
Strategic Framework for
the Evolutionary
Development Process
of SEE (2013-2016)”.
It is a development
process that expects a
building-up of social,
intellectual and human
capital over time. To
build up financially
viable grass-roots
business organizations
is only part of the total
picture. To reach the
goal of happy society,
other parts of the
framework are as
important to make the
business organizations
successful.
New Challengers:
• The upgrading all pasts of the co-op. system with the key mechanism.
Functional Upgrading, Process Upgrading, Product Upgrading
The new challengers: The Strategic direction for Thai agricultural cooperative.
The Moral Rice Value Network
The Moral Rice Value Network is a
business model of multi-partnership that
includes business enterprises throughout the
supply chain of organic Hommali Rice. All
participating farmers in the project vowed to
observe a set of moral codes i.e. abstinence
from alcohol drinking, smoking and gambling.
These farmers create a brand, “Moral Rice,”
which is meant to induce trust in their
customers that the product is genuine organic
Hommali Rice. Eventually, the new brand has
successfully helped farmers overcome the
falling prices of rice.
Altogether, there are 119 moral rice
farmers, who are members of the Dhama
Ruamjai Group in Yasothon Province. The group
has its own motto, “Strong Moral Codes, high
working skills and good knowledge,” to guide
their farming activities in the supply chain
system, which makes it unique.
The Strategic Framework of the Moral Rice Value Network.
The Fruit Value Network
The Fruit Value Network is a model of the
Kitchakut Agricultural Co-operatives Ltd. in
Chanthaburi province. It adopted the VN&F
platform in search of a solution to the highly
volatile fruit markets, the challenges faced by
the co-operative members. The strategic
framework for creating the Fruit Value
Network and its economic and social
implications for the communities
The Strategic Framework of the Fruit Value Network.
The Sampran Value Business Group
The Sampran Value Business Group is another innovative
value network business model. It is located at the Rose Garden
Hotel, Sampran district, Nakorn Pratom province. The business
group was founded by the owner of Rose Garden Hotel. The CAI
provided the group with technical support in applying the
principles of self-help and mutual help to overcome pollution
from chemical-basedfarmingintheneighborhood.Themodelpromoted
farmers' understanding and awareness of the benefits of organic
farming that could contribute to their better living conditions and
economic success.
In this project, the “Sukjai Market” (Happy Market) was
set up as a weekend market, where orchard farmers in the
surrounding communities could bring their organic products to
sell free of charges. The production of organic products was
under close supervision of the CAI and the Rose Garden Hotel.
Participating farmers did not only earn more than 1 million baht
a month from selling their organic products, but they also
learned about the principles of marketing, food safety as well as
Good Agricultural Practice (GAP). Hence, the Sukjai Market has
become the living learning center for everyone in the community
The Strategic Framework for the Sampran Value Business Group.
Organization Structure of Thai Co-op. Hommali Rice Value Network
12
Thai Co-operative Hommali Rice Valued Network
20

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1.3 Thailand´s agricultural sector and Agri Coops Overview

  • 1. Assoc.Prof.Juthatip Patrawart Director of Co-operative Academic Institute (CAI) March 28, 2016 Nontri 1 Room, KU Home, Kasetsart University Thailand´s agriculture sector, Agriculture Cooperatives and other Farmer Organizations situation and perspectives on the AEC ASEAN Learning Route on Agricultural Cooperatives : “Strengthening the Role of Agricultural Cooperatives to Address the Challenges and Opportunities of the ASEAN Economic Community for the Benefit of the Smallholder Farmers”.
  • 2. Current situation of socio-economics development in Thailand. Roles of co-operatives, and related agencies for developing the agricultural sector in Thailand. The new challengers: The Strategic direction for Thai agricultural cooperative . 1 2 3 Outline of Presentation
  • 3. • Thailand is considered a land of opportunities, with our strategic geographical location at the heart of ASEAN region, great network of connectivity, and a business-friendly atmosphere • We are also an upper middle income economy and the 2nd largest economy in ASEAN Current situation of socio-economics development in Thailand.
  • 4. Current situation of socio-economics development in Thailand. • Throughout the century, the agricultural cooperative development in Thailand has been developed continuously. • The agricultural production is replaced by the manufacturing production. • Currently the production’s proportion of manufacturing sector is accounted approximately 90% of GDP, while the production’s proportion of agricultural sector is accounted only, 10% of GDP • Thailand is rank one of the tenth in agricultural and food export to the world market
  • 5. • Since 2004 the government has launched the “Thai kitchen to the world” policy with the aim to create a global presence for Thai Cuisine and food products and to support SMEs. • Thailand is strength as the world’s 12th largest exporter of food products lies in food safety and food security. • Recently, the uncertainly and fluctuation of world economy have effected to most sectors in Thai economy, particularly manufacturing sector. • Thai government attempted to increase the importance of agricultural and service sector. Current situation of socio-economics development in Thailand.
  • 6. Potential 2020 Vision for Thailand Transformation from commodity supplier to branded, high value-added economy Strategic Focus " What Thailand should be known for" Strategic pillars "How Thailand should operate" Foundation "What Thailand needs to have" High quality & wide access to social services Sufficiency & sustainable resource management High quality physical & technological infrastructure Prudent fiscal & monetary policy Open economy with high social mobility Culture of tech/ entrepreneur -ship& excellence Coordinated cluster economy system Knowledge & creativity based communities World-class work ethics & governance High value-added economy World's food supplier Leader in creative products Magnet for cultural & eco-tourism high-value added services Regional logistics hub 1 2 3 4
  • 7. Transformation towards sustainable, higher value economy National agenda is key to drive transformation Thailand Today Commodity products OEM focus Basic infrastructure Basic use of rich cultural heritage in commercialization of products and services Thailand 2020 Higher value-added products Branded products Higher-quality physical and technological infrastructure Cultural tourism and heritage- based product commercialization • Add value • Build brand • Invest in infrastructure • Leverage Thai heritage
  • 8.
  • 9. Thailand’s vision (for 2015 and Beyond)
  • 10. • Since the first cooperative of Thailand was establish in 1916 due to the government attempted to alleviate the debt problem of Thai farmers. • According to the Cooperative Act B.E. 2542, there are 7 types of co-ops in Thailand. Agricultural Co-ops. Consumer Co-ops. Services Co-ops. Thrift and Credit Co-ops. Credit Union Co-ops. Fisheries Co-ops.Land and Settlement Co-ops. Roles of co-operatives, and related agencies for developing the agricultural sector in Thailand.
  • 11. • According to the Co-op. Act B.E. 2542, the minister of MOAC is a chairperson of NCDSC • NCDSC has responsibility to develop the policy and the national development plan. • CLT is the national apex org. of co-op. movement. • ACFT, FSCT, CULT are national co-ops. • The myriad org. supporting to the co-op. movement such as - CPD, CAD, BAAC, CDF, CAI etc. Co-operative Movement Structure
  • 12. Current Situation of Co-op. Movement • 7,043 Co-ops. • 11,470,013 Individual Members (18% total pop.) • Agri. Co-ops. : Non Agri. Co-ops. (54% : 46%) Roles of co-operatives, and related agencies for developing the agricultural sector in Thailand.
  • 13. Type of Business 2011 2012 2013 Saving and deposit 1,900.62 2,106.61 2,344.37 Credit 2,886.22 3,200.90 3,856.37 Purchasing 1,663.34 1,892.54 2,221.00 Marketing 3,460.48 3,773.91 3,393.34 Other services 15.41 17.10 17.69 Total Business Volume 9,926.08 10,991.06 11,832.77 Growth Rate (percentage) 25.32 10.73 7.66 Business Performance of cooperative in agricultural sector during 2009-2013 (Unit: $Million dollars) Source: Cooperative Auditing Department, 2016 • The main business of Agri. Co-ops. are - Savings & deposit, Credit, Purchasing, Marketing • Total asset in Agri. Co-op. $ 6,059 million • Credit Business $ 15,602 million • Saving & Deposit $ 14,507 million • Purchasing $ 13,894 million
  • 14.
  • 15. New Strategic Framework for Evolutionary Development Process of SEE (2013-2015) The new research theme during this period will be “The New Strategic Framework for the Evolutionary Development Process of SEE (2013-2016)”. It is a development process that expects a building-up of social, intellectual and human capital over time. To build up financially viable grass-roots business organizations is only part of the total picture. To reach the goal of happy society, other parts of the framework are as important to make the business organizations successful.
  • 16. New Challengers: • The upgrading all pasts of the co-op. system with the key mechanism. Functional Upgrading, Process Upgrading, Product Upgrading The new challengers: The Strategic direction for Thai agricultural cooperative.
  • 17. The Moral Rice Value Network The Moral Rice Value Network is a business model of multi-partnership that includes business enterprises throughout the supply chain of organic Hommali Rice. All participating farmers in the project vowed to observe a set of moral codes i.e. abstinence from alcohol drinking, smoking and gambling. These farmers create a brand, “Moral Rice,” which is meant to induce trust in their customers that the product is genuine organic Hommali Rice. Eventually, the new brand has successfully helped farmers overcome the falling prices of rice. Altogether, there are 119 moral rice farmers, who are members of the Dhama Ruamjai Group in Yasothon Province. The group has its own motto, “Strong Moral Codes, high working skills and good knowledge,” to guide their farming activities in the supply chain system, which makes it unique.
  • 18. The Strategic Framework of the Moral Rice Value Network.
  • 19. The Fruit Value Network The Fruit Value Network is a model of the Kitchakut Agricultural Co-operatives Ltd. in Chanthaburi province. It adopted the VN&F platform in search of a solution to the highly volatile fruit markets, the challenges faced by the co-operative members. The strategic framework for creating the Fruit Value Network and its economic and social implications for the communities
  • 20. The Strategic Framework of the Fruit Value Network.
  • 21. The Sampran Value Business Group The Sampran Value Business Group is another innovative value network business model. It is located at the Rose Garden Hotel, Sampran district, Nakorn Pratom province. The business group was founded by the owner of Rose Garden Hotel. The CAI provided the group with technical support in applying the principles of self-help and mutual help to overcome pollution from chemical-basedfarmingintheneighborhood.Themodelpromoted farmers' understanding and awareness of the benefits of organic farming that could contribute to their better living conditions and economic success. In this project, the “Sukjai Market” (Happy Market) was set up as a weekend market, where orchard farmers in the surrounding communities could bring their organic products to sell free of charges. The production of organic products was under close supervision of the CAI and the Rose Garden Hotel. Participating farmers did not only earn more than 1 million baht a month from selling their organic products, but they also learned about the principles of marketing, food safety as well as Good Agricultural Practice (GAP). Hence, the Sukjai Market has become the living learning center for everyone in the community
  • 22. The Strategic Framework for the Sampran Value Business Group.
  • 23. Organization Structure of Thai Co-op. Hommali Rice Value Network 12 Thai Co-operative Hommali Rice Valued Network
  • 24. 20