AgroIndustry in Thailand

1
Agro-Industry in Thailand

• Noppol Leksawasdi, PhD
• 21st May 2007
• 09.00-10.30 AM
• Faculty of Agro-Industry, CMU

2
Synopsis

• Introduction
• Disciplinary of Agro-Industry in Northern Part of
  Thailand
• Available Learning Training Programs
• Case Study of Agro-Industry Factories
• Conclusion

3
Introduction

• Available agricultural raw materials
• Major exported agricultural products
• Agricultural products of significant values in
  the Northern part of Thailand
• Problems of Agro-Industry in Thailand

4
Introduction
Available Agricultural Raw Materials

• Four regions of Thailand
• ? Central, Northern, North Eastern, Southern
• Climate
• ? Northern cooler, good for temperate crops
• ? North Eastern rather dry
• ? Central Southern high humidity

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
5
Available Agricultural Raw Materials
Introduction
Map of Thailand
http//www.answers.com/topic/provinces-of-thailand
6
Introduction
Available Agricultural Raw Materials

• Area 513,115 sq. km. (198,114 sq. mi.)
• Population 62.4 million
• In 2004, 67.8 located in rural area
• 90 of rural population relies on rice
  cultivation, field crops, fruit trees, perennial
  crop production
• Rice, Cassava, Sugar Cane, Soybean, Corn, Mango,
  Rambutan Rubber Trees

Data based on 2006. http//bangkok.usembassy.gov/
relation/bgnotes.htm Thaiprasert, N. 2006.
Rethinking the Role of Agriculture and
Agro-Industry in the Economic Development of
Thailand Input-Output and CGE Analyses (PhD
Dissertation). Nagoya University, Japan, p.56.
7
Introduction
Available Agricultural Raw Materials

• 41.5 of the area is farmland
• 17.5 of the farmland is under irrigation
• Both irrigated non-irrigated farmland are
  used to produce agricultural commodities for
  domestic consumption export
• 51 of farmland is rice fields,
  24 field crops, 17 fruit trees tree crops
  8 other crops

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
8
Introduction
Available Agricultural Raw Materials

• GNIPC Occupation in Agriculture

GNIPC Gross National Income Per Capita
Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.34.
9
Introduction
Available Agricultural Raw Materials

• Trend of sectorial employment in Thailand

Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.35.
10
Introduction
Major Exported Agricultural Products

• Agricultural Export Comparison (TH, USA, World)

Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.64.
11
Introduction
Major Exported Agricultural Products

• Values of Exported Agricultural Goods

Office of Agricultural Economics
http//www.oae.go.th/oae_go_th/statIm_Ex.php
12
Introduction
Major Exported Agricultural Products

• Values of Exported Agricultural Products in 2006

Office of Agricultural Economics
http//www.oae.go.th/oae_go_th/statIm_Ex.php
13
Introduction
Major Exported Agricultural Products

• Values of Exported Agricultural Products in 2006

Office of Agricultural Economics
http//www.oae.go.th/oae_go_th/statIm_Ex.php
14
Introduction
Major Exported Agricultural Products

• Values of Exported Fruits Vegetables in 2006

Office of Agricultural Economics
http//www.oae.go.th/oae_go_th/statIm_Ex.php
15
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Economic crops of Thailand includes Longan,
  Orchids, Temperate Plant such as Beet Root,
  Rice, Tea, Herbs, Orange and Lychee

Chiang Mai Development Strategy (Thai Language)
http//www.agro.cmu.ac.th/department/fe/elearning/
Research2/ChiangMaiStrategy.pdf
16
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Values of Exported Economic Crops in 2006

Office of Agricultural Economics
http//www.oae.go.th/oae_go_th/statIm_Ex.php
17
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Agro-Industry is one solution to Thailand
  problems

- Inequality exists between urban rural areas
in term of income, attention, promotion,
investment because urban area grows at a much
faster pace - In term of labour allocation,
industry sectors do not provide sufficient jobs
as evident from the trend of sectorial
employment - Manufacturing industrial sectors
are unproductive due to high dependency on
imported materials
Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.56.
18
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Agro-Industry is one solution to Thailand
  problems

- Agro-Industry has a potential to tackle these
problems by adding values to agricultural
products - It also serves as a bridge connecting
agriculture sector with modern sectors - Once
fully developed, more equality should be
achieved, employment transformation should be
smoothened while maintaining high GDP growth
rate (as of 2005, Thailands GDP was at 169b
USD)
Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.56.
19
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Agro-Industry is one solution to Thailand problems

http//en.wikipedia.org/wiki/ImageGdp_nominal_an
d_ppp_2005_world_map_single_colour.png
20
Introduction
Agricultural products of significant values in
the Northern part of Thailand

• Agro-Industry is one solution to Thailand
  problems

? Promote Agro-Industry in rural area to -
Minimize primary agriculture - Improve wage of
farmers - Prevent excessive migration to urban
area - Establish input depot of agricultural
products ? Agro-Industry is a bridge connecting
transformation of Thailand from agricultural to
industrialized country
Thaiprasert, N. 2006. Rethinking the Role of
Agriculture and Agro-Industry in the Economic
Development of Thailand Input-Output and CGE
Analyses (PhD Dissertation). Nagoya University,
Japan, p.56.
21
Introduction
Problems of Agro-Industry in Thailand

• Processing Problems
• - Unreliable supply of raw materials
• - Variation in raw materials quantity quality
• - Some small medium scale factories used
  obsolete or used production machinery
• ? low productivity
• ? poor quality of finished products

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
22
Introduction
Problems of Agro-Industry in Thailand

• Processing Problems
• Attempts of solving the problems
• - Direct purchasing during the harvest period
• - Contractual arrangements with farmers and
  through middleman
• - Producing raw materials on their own
  plantations

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
23
Introduction
Problems of Agro-Industry in Thailand

• Farmers Problems
• - Unaccustomed to fixed schedule of cultivation
• ? planting times, irrigation, chemical
  application
• - Use improper techniques for handling of
  harvested produce
• ? no cleaning, grading, sorting, precooling
• ? rapid deterioration of raw material quality

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
24
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 1. Small-scale production
• ? Majority of farmers is producing small scale
• ? Little or no bargaining power
• ? Overproduction why?
• ? Variation of farm gate prices why?

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
25
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 1. Small-scale production

87 production increase 265,000 tonnes
Prev. Yrs. 1.35 - 1.89 USD/kg This Yr. 0.14
- 0.27 USD/kg !!!
Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.http//11news1.com/daily/ViewNews.aspx?
NewsID9500000045940 23/04/07
26
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 1. Small-scale production

http//11news1.com/daily/ViewNews.aspx?NewsID950
0000045940 23/04/07, http//www.timwu.org/durian.
JPGhttp//www.greentales.com/files/durian.jpg,
http//www.rirdc.gov.au/rirdc-online/july06-rambut
an.jpg
27
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 2. Lack of quality produce irregular supplies
• ? Highly developed esp. in fruit processing
• ? But difficult to operate at full capacity
• ? Low quality of raw materials
• ? Irregular supplies
• ? Exports are affected

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
28
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 3. Poor harvest post-harvest management
• ? Short shelf life
• ? Major losses of agricultural products
• ? Farmers pay little attention to these
  problems
• ? Merchants neglect proper post-harvest
  handling practices

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
29
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 4. Poor packaging
• ? Poor levels of know-how
• ? Lack of standard requirements for packing
• ? Crop damage is resulted during post-harvest
  handling transportation
• ? Major problems with fruits vegetables

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
30
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 5. Lack of marketing facilities infrastructure
• ? Central wholesale markets located far away
• ? Not enough market facilities such as
  storage space, drying floor, dryers, weighting
  scales
• ? Inadequate availability of packaging
  materials, equipment, cold storage,
  transportation

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
31
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 6. Lack of an efficient marketing info. system
• ? Farmers lack of timely accurate
  market information covering production,
  daily prices, market demand
• ? Such info. is necessary for negotiating
  prices planning shipments of produce

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
32
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 7. Export quality standards
• ? Quality standard sets by importing
  countries agricultural products differ from
  country to country
• ? Difficult to manage the quality of
  such products

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
33
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 8. Competition in international markets
• ? Severe international competition import
  specific trade barriers
• ? Domestic prices of major Thai crops
  depend on the export volume

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
34
Introduction
Problems of Agro-Industry in Thailand

• Agricultural Marketing Problems
• 9. Lack of airfreight space and high costs
• ? Major constraints facing Thai
  exports, especially in the case of
  horticultural produce

Nualvatna, K. 2003. Development of Agribusiness
Enterprises COUNTRY PAPER Thailand. Report of
the APO Seminar on Development of Agribusiness
Enterprises. Indonesia, 20-24 November 2000, pp.
169-170.
35
Introduction
Problems of Agro-Industry in Thailand

• Attempts in standardization of products
• ? GHP Good Hygiene Practice
• ? GMP Good Manufacturing Practice FDA, Codex
• ? HACCP Hazard Analysis Critical Control
  Point
• ? ISO (Greek Isos equal) International
  Organization for Standardization
• 9000, 9001, 14000, 14001, 18001, 22000
• ? BRC British Retail Consortium
• ? QWL Quality of Work Life ISO for workers

36
Introduction
Problems of Agro-Industry in Thailand

• Attempts in standardization of products

Small Medium Scale
DUST
HEAT
37
Introduction
Problems of Agro-Industry in Thailand

• Attempts in standardization of products

Large Scale
38
Disciplinary of Agro-Industry
Faculty of Agro-Industry, CMU
39
Available Training Learning Programs
Faculty of Agro-Industry, CMU
Workshops Local 1, 2, 3 International
1, 2 On site consultant GHP, GMP, HACCP,
ISO QWL Consultation
40
Chiang Mai, Lampang Uttaradit
Case Studies
http//www.thaiboxing.com/images/thailand-politica
l-map.gif
41
Case Studies
Agro-Industry Factories

• Small Scale Factory
• Kao Tan Factory, San Sai, Chiang Mai
• Medium Scale Factory
• Taweepan Kao Tan Factory, Lampang
• Noodle Factory, Uttaradit
• Animal Feed Factory, Uttaradit
• Large Scale Factory
• Thai Identity Sugar Factory, Uttaradit

42
Conclusion

• Majority of Thai is still in the agricultural
  sector
• Inequality between urban rural areas, inability
  of industrial sectors to provide sufficient
  number of employments and their high dependency
  to imported materials all contributed to
  Thailand problems as suggested by Thaiprasert
  (2006)
• Agro-Industry is one part of the solution to
  these problems by bridging the widening gap
  between agricultural and industrial sectors

43
Conclusion

• However, Agro-Industry does face problems of its
  own such as low quality and unreliable raw
  materials, lack of understanding by the farmers
  to postharvest practices

• Other problems
• ? Overproduction of agricultural products
• ? Standardization of processing practices

44
Q A