Institutional and Governance Innovation in Thailand’s Food System: The Role of the Private Sector in Food Safety by Kamphol Pantakua and Natthida Wiwatwicha, TDRI. Presented at the ReSAKSS-Asia - MIID conference "Evolving Agrifood Systems in Asia: Achieving food and nutrition security by 2030" on Oct 30-31, 2019 in Yangon, Myanmar.

1. Institutional and Governance
Innovations in Food Safety
The Role of Private Sector in Thailand’s Food System
Kamphol Pantakua
Natthida Wiwatwicha
ReSAKSS-Asia October 30-31, 2019

2. Overview
 In Thailand, food safety directly relates
to modernization of FVCs, driven by the
private sector
 Protein value chains: Industrialization
 Vegetable and Fruit VCs: New patterns of
inter- and intra- sector management
• Increasing production sources that supply
both modern and traditional markets

3. Questions & Method
 What are the factors for successful food
safety in Thailand’s market-driven food
environment?
• The components of food safety ecosystem
• Government’s supportive role
 Method: historiography of FVC
development
 Literature review
 Field work interviews

4. Factors Governing Food Safety
 Consumer demand
• Growth of Modern Trade
• NGO’s
 Economy of scale
• Mechanization
• Increasing farm size
• Formations of groups
 Coordination and
Management
• Inter-intra sector
• Between functions
• Between independent
producers
 Government Support
– Private sector initiative
• Standards / Regulations
• Institutions / Partnerships
• Hardware

5. Brief Historical Development
 Early development
• NGO’s contribution
• Private Sector Contribution (Modernization)
 NGO’s contribution to food safety through various objectives
• Religion group: Buddhist temples/Monks
 Goal: self-sufficiency economy and health concerns
• Local NGO: Biothai
 Goal: Security and sovereignty
• Inter NGO: IFOAM
 Goal: Food quality and ecology
• Inter org: WTO & FAO
 WTO : agricultural commodity standards 1997
 Thailand joined WTO 1994 and restructured food safety related bodies in
2002
 FAO – Good Agricultural Practice

6. Key Events for Modernization
 1970’s – 1980’s Labor shortage results in transformation
[Farmers]
 1980’s Introduction of contract farming [Local and international
large agribusiness firms for plants and tomatoes]
 1997-8 Nitrofuran residue found in export product, triggering
widespread closed-farming system for chicken and shrimp
[Govt and Private Sector Cooperation]
 Air and water pollution conflict with the public (residents in
suburbia) triggered transformation of swine production
industry [Govt and Private Sector Cooperation]
 1998 Thai Government announced GAP - Good Agricultural
Practices (plant-based food); GMP – Good Manufacturing
Practices (meat)
• Only recently created regulation for certification in 2004

7. Private sector: Modernization
 Livestock and aquaculture:
• large firms and contract farming
• Industrialization
• Vertical integration
 Fruits and Vegetables: fragmented farmers
• Unlikely to undergo industrialization
• At present, still continued to be limited by small
volume of export and lack of industrial scale
production (more labor-intensive)
 Small independent producers, uncoordinated and
depends largely on suppliers
 Clear division of producer for export and domestic

8. Livestock VC
 Advanced facility and management of vertically integrated meat
production
Source: CPF

9. Vegetables VC
Source:kapook,khaosod2019

10. 0
50
100
150
Billionsinter.$
Top20ofAgriculturalexport value2017
Overview of Thailand agricultural situation in food
safety: fruits and vegetables
0
10
20
30
Billionsinter.$
Top20ofFruitsandVegetablesexport value2017
Source:FAOSTAT.
12th
14th

11. The rate of pesticide use per area and per value in Thailand is not
high compared with other food producer countries.
0
5
10
15
20
1990 1995 2000 2005 2010 2015 2016
Kg./Ha
Totalpesticidesconsumptionperhectare
China, mainland France Germany
Italy Netherlands Spain
Thailand United States of America Viet Nam
Source:FAOSTAT.
0
1
1
2
2
3
3
4
4
1990 1995 2000 2005 2010 2015 2016
Kg./1000I$
pervalue ofagriculturalproduct

12. In the past, the rate of pesticide use of Thai farmers
tends to be sensitive on the product price.
0
0.5
1
1.5
2
2.5
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015 2016
Total pesticides correlation with product value
Grains real price index Total pesticides: Thailand (Kg./1000 I$)
Source:FAOSTATandTheWorldBankCommodityPriceData.

13. Pesticide Residues
0
200
400
600
Number of pesticide residues notifications on fruits, vegetab
spicesinEUbyselectedcountries2010-2019
alert border rejection
information for attention information for follow-up
Source:RASFFandMarket sharebyTrademap
6.7% 10.4%
13.7%
4.9%
2.0% 2.0%
3.2% 0.6%
0.4%
1.4%
Market share

14. Bangkok found over MRL rate more than other region
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
0.0
1.0
2.0
3.0
4.0
5.0
%ofSampling
Chemicalscreentesting:Whole
Kingdom
Sampling Over MRL
Note:*First yearofpesticideresiduetest with4group[Organophosphate,Pyrethroid,Carbamate,Organochlorine]
OthertestingareBorax,Formaldehyde,SalicylicAcid,SodiumHydrosulfite,Salbutamol,Aflatoxins,pH
Source:FDA2019.
4.8 2.97 0 2.04
19.84
0
41.02
11.07
29.47
0
5
10
15
20
25
30
35
40
45
Bangkokarea:OverMRL(%ofsampling)

15. Consumer monitor program by NGO
 Increased sample size ->
Decreasing trend of over-MRL
 In GAP and Organic certified
found a high rate of over-MRL
 Modern trade products not safer
than traditional market
Source: Thai-PAN.
0%
10%
20%
30%
40%
50%
0
100
200
300
vegetables fruits vegetables fruits vegetables fruits
2016 2017 2019
Total
Over MRL Sampling Share of Over MRL
0%
20%
40%
60%
80%
0
5
10
15
20
GAP GMP Organic GAP GMP Organic
2017 2019
By standards type
Over MRL Sampling Share of Over MRL
0%
20%
40%
60%
80%
0
50
100
150
200
Modern
trade
Traditional Modern
trade
Traditional Modern
trade
Traditional
2016 2017 2019
By markets
Over MRL Sampling Share of Over MRL

16. Agricultural Technology Timeline
Source:Niponet al.2010,edit 2019.
1904
2019
Govt.
University
Private

17. New Development in Modern Food Value Chain
 Change in consumer
behavior
• Consumer expects
safety and traceability
 High pressure from NGO’s
 Modern trade needs to
stabilize standard and
quantity of supply
• Shortening of FVC
through direct contract
with farmers
53.8%
46.2%

18. Modernized
Value Chain

19. Institutions: Vegetables and Fruits
 Emerging practice: Export and domestic
Modern Trade institution engages
directly with groups of coordinated
farmers or independent farmers
• Farmers adapted by forming groups, co-
op’s, CE’s
• Modern Trade buyers work with third party
facilitators (governmental
agencies/universities) on site with farmers

20. Modernized Fresh Food Value Chain Model
 Engagement between a group of coordinated farmers (100+ independent
farmers) from the same area, and export/domestic modern trade
 Contract for multiple types of vegetables (example: contract is renewed every 3
months, 3 months in advanced)
• but not 100% of produced volume; farmers to establish trade relations with other local
suppliers or local traditional markets
 Better financing from agricultural bank for building a local packaging center
 An on-site manager (rep. from a modern trade brand) work with farmers’ group
leader on management, planning, quality control, logistic coordination, and
provide accurate market information
 An on-site packaging center
• Contamination Test 1. once on site (every lot) and 2. at the DC (sampling)
 Variations of management delegation and technology and knowledge provision
between the farmers, government agency, and modern traders

21. Incentives
 Modern trader perspective:
• Cheaper cost for better quality, safer
vegetable products
 Farmers perspective:
• pre-arranged/negotiated price, and
stable pre-arranged demand volume
(for advanced planning)

22. MFVC Institutions: Farmers Organizations
 Cooperatives
 SMCE (small/micro community
enterprise)
 Farmers Group
• Decreasing degree of oversight by
government agency
• Third party facilitator
(government/universities)
 For matching with markets and training

23. Farmers Organization
• Benefits of coordination
 For collective distribution of crop rotation and polyculture
o Simultaneously solves price conflict issue and suppresses pest cycles
o not exceed quantity demanded
o Regular meetings and social media (mobile messaging application)
• Benefits of group formation
 Legally recognized entity for doing business and better
financing from Bank of Agri. and Agri. Cooperatives (BAAC)
 Lowering cost (ie: buying/making fertilizers)
 Transmissions of knowledge and techniques (in-out)
o From group to group
 Better for interaction with other agencies
o Can register as a Farmers Group but adopt management and contracts
of a Cooperative

24. Modern FVC: Interactive Management
 Injection of Modern Trade representative into production site
• Allows farmers to coordinate with accurate information
 Market/Buyer demand - Risk assessment
 IPM: volume and type coordination
• Quality control
• Volume control
 Secondary market for excess product volume
 Injection of modern tools from modern marketing and
governmental agency
• Management, accounting
 Modern trade representative provides business management programs
• Food processing techniques and protocols compatible with
consumer’s preference
• Chemical residue test kit

25. Food Safety Government Policy
 Past: Top down Food Safety Policy
• GAP, GMP, Organic Certification
• Knowledge training
• Evaluation through NGO survey result
 Random sampling showed outdated and unsuccessful
 Present: Bottom up Food Safety Policy
• Focus on creating knowledge and business support network
partnership between group of farmers, traders, and other private
sector actors (sponsors)
• Facilitates food safety improvement driven by private sector and
NGO’s
 Such as providing facilities, chemical test kit, access to information,
opportunities for business matching

26. Food Safety Government Policy
 Present: Bottom Up Food Safety
Policy (continue)
• Assisting modern trade buyer to meet farmers
with food safety production and business
capacity
 vegetables: Khon Khaen, Ayuttaya, Suratthani,
Kampangpetch, Ratchaburi, Supanburi,
Chacheongsao
• Event-based platform for modern trade buyer
to meet small/individual farmers who are
interested in selling/informal contract with
modern trade
 fruits: Suratthani (Farmers: Suratthani, Ranong,
Chumpon, Pattalung)

27. Food Safety Ecosystem
Software
 NGO’s monitoring and programs
 Facilitation and Partnerships
 Training/knowledge (ie: IPM, safe
chemical use)
 Financing
 Institutional formations
 Contractual relationship
 Quality Control
 Logistics + Traceability
 Standards (GAP, GMP)
 Regulations and policy
 Consumer behavior
Hardware
 Farm facility (ie:
Closed-system, Open-
system)
 Processing facility
 Temp control
Transportation
 In-FVC and end of FVC
evaluation/testing tools
 Communication tools

28. Conclusion
 Recent modern food value chain development in Thailand is
driven by consumer awareness, NGO pressure, and multi-
sector shared-governance
• Decreasing intermediate supplier between source and markets for
better quality control and utility
• Inter-sector and intra-sector coordination, sharing of information,
technology, and shared-management
 The government’s supportive role ranges from issuing
standard certification, facilitation of farmers group formation
and connecting small holders to modernized marketing chains
• Move toward supporting random testing by the private sector/NGO
as means of Good Agricultural/Manufacturing Practice standard
enforcement

29. Implications
 Private sector’s impact on food safety is incentivized by direct benefit (profit)
• But the extension excludes low-value crops such as rice, maize, cassava
 Formal contract may not be necessary for a working relationship from complementary
incentive between farmer groups and modern traders
• But farmers group would still be at disadvantage from informal contract in some cases
 Increased food standard increases market opportunity
 In the case of formal contract, policy makers may investigate regulatory or contract innovation
 Going Forward
• How to create triggers for self-organized formations of coordinated farmers?
 Increase research and development and extension of virtually large-scale farming pilot projects
 Analysis of management and facilitation process
 Systematizing a flexible platform for facilitation to expand the modern food value chain
• The design or identification of food safety ‘regulator’ (ie: random testing) to be done by trusted parties
(ie: needs a market for testing, more samples, redundancy etc.)
• Safety Sample Testing in institutional buyers
 Hospitals: recently regulated (public hospitals)
 Schools: none

30. Thank you for your kind attention
kamphol@tdri.or.th
natthida@tdri.or.th