September 30, 2001



Visits to Thai agricultural cooperatives under Reunion Program

Of the IDACA Reunion Program in Thailand, the previous issue of IDACA News covered the conference of Asian farmers and seminars. As a follow-up to the program, this IDACA News takes up the visits IDACA instructors made, after attending seminars, to four Thai cooperatives: Nonpoh Dairy Cooperative, Ban Lard Agricultural Cooperative, Pimai Agricultural Cooperative and Sikhu Agricultural Cooperative. The tour was doubly rewarding as it gave the instructors an opportunity for a reunion with ex-IDACA participants and to discover the truly remarkable progress these cooperative have attained.

1) Nonpoh Dairy Cooperative
Organized in 1959, this cooperative made a leap forward in 1970 when the Thai King bestowed on it a plot of land and financial assistance. The royal gifts and assistance also from private-sector industries enabled the cooperative to start a diary product processing plant in 1972, which now produces processed milk and yogurt among other diary products.

Its members and retired ex-members total more than 5,000. Active members number 3,600, about 10 percent of them large-scale farmers. Thailand has many dairy farming cooperatives, but Nonpoh Dairy Cooperative had been the only one of the kind in Rachaburi Province until two more diary cooperatives came into being recently. Nonpoh Diary Cooperative is the largest in the country in terms of the size of the production and other facilities it owns. It has a staff of about 50 dairy farming specialists, who, among others, are active in the fields of production guidance and artificial insemination of the live stock. Those cooperatives receive technical advice and soft loans from the Cooperative Promotion Department (CPD). They commenced exchanges six years ago with the National Federation of Dairy Cooperatives (Zenraku-noh) in Japan. At one time, they planned business tie-ups with Zenraku-noh, but the plan has not materialized for reasons of exchange rates. At present, their relations with Zenraku-noh are confined to the sharing of information and the dispatch of directors.

Sales activities involve home delivery service, direct marketing, supply of milk for school lunches under government subsidies, etc. On the other hand, long-life milk is sold through supermarkets, convenience stores and other private-sector distributors. Its market is growing steadily, though it is of a small scale yet.

Officials of the cooperative said its most pressing problem was to find a solution to the lack of talented human resources, adding that the cooperative is yet to provide the current staff with educational and training opportunities. In order to survive the intensifying competition in the market, the cooperative, the officials said, needs to upgrade its management and farming techniques, and work together with foreign firms in establishing new projects.

2) Ban Lard Agricultural Cooperative
Ban Lard Agricultural Cooperative, over 6,300-member strong, is one of priority cooperatives in the province for the Cooperative Promotion Department (CPD). Slides were shown on the current status of the Central Market which receives active assistance of the government and other activities of the cooperative. "Other activities" include the operation of a service station as part of the Central Market, a plant treating waste water from the Central Market and facilities producing organic fertilizer from fruit peel and vegetable residues. The cooperative runs a handicraft center where baskets and other handicraft items are made, and the agricultural cooperative purchases such handicraft from farmers for sale at the Central Market.

The central market is owned 100 percent by the cooperative, including land and buildings, and is utilized 75 percent by cooperative members and 25 percent by non-members. The market rents out its extra space to other business operators.

As mentioned in the foregoing, the Ban Lard Agricultural Cooperative engages a broad range of activities. Some of the activities rare among other cooperatives are those intended to conserve the environment. For example, it owns waste water treatment facilities, manufactures compost using organic yeast and calls on member farmers to clean the drainage as part of the program to celebrate the King's birthday. Additionally, the cooperative is aggressively encouraging the farming public to increase savings.

3) Pimai Agricultural Cooperative
Pimai is the most affluent village in the province. Retaining legacies of Khmer culture, it draws an increasing number of tourists in recent years from within and outside the country.

The Pimai Agricultural Cooperative has grown into one of the major agricultural entities in Thailand. It currently has 8,125 members, over three times the 2,607 registered at the time of the 1984 follow-up guidance.

Capitalized at about 156 million baht (about エ468 million), the cooperative chiefly handles deposit and financing services, markets livestock feed and medicine, operates filling stations, and deals in farm produce, mainly rice. In 1999, it sold 55.3 million baht worth of rice and 24,000 baht worth of rice bran.

The cooperative explores markets for farm commodities and deliver them by itself. It mills rice and exports polished rice, especially to the U.S. through Amway, a world-famous mail-order house.

One of five cooperatives in Nakorn Ratchasima province, the cooperative maintains close relations with IDACA and the Central Union of Agricultural Cooperatives (JA Zenchu). In the 1980s, the Japan International Cooperation Agency conducted a cooperative development project for the Pimai Agricultural Cooperative at the request of the Thai government. Experts were sent to the project by IDACA and JA Zenchu. Meanwhile, JA Aichi Chita, which implements a foster parent system, carries out regular exchanges with the Pimai Agricultural Cooperative. Compared with other cooperatives in the province, it boasts an extremely high rate of organization, performing admirably in credit, marketing and purchasing services.

The IDACA delegation toured its facilities after a briefing on the outline of its activities. Within the cooperative's premises, a large-scale milling plant operates, milling rice, packing and shipping it out to domestic and overseas destinations. The cooperative's facilities include not only production-related facilities, such as a farm supplies warehouse and a compost production area, but also housing for cooperative workers.

4) Sikhu Agricultural Cooperative
Located at a point about 60 km from Nakhon Ratchasima City on the way to Bangkok, this cooperative is made up of 3,684 members. Its paid-in capital amounts to 415,000 baht (about エ124 million). Deposits from members total 198,000 baht and loans come to 839,000 baht. Net earnings stood at 820,000 baht in 1999. Most the loans that it has extended have been financed by the Thai Bank of Agriculture and Agricultural Cooperatives (BAAC) and CPD as the cooperative also handles a fund subleasing service.

Its main business activities are credit service, farm supplies/consumer goods purchasing, and marketing of rice, maize and milk. Rice is sold through the provincial federation of agricultural cooperatives. The cooperative has begun farm guidance. In the area it serves, 30 percent of the farming households are registered as members of the cooperative and the remaining 70 percent belong to BAAC-affiliated cooperatives.

Its president and accounting department senior staff are ex-IDACA participants. The IDACA instructors have been impressed by their first-hand observation of the cooperative's current performance attesting to successful contributions IDACA training programs have made to the cooperative's growth.

The cooperative's president, vice president, other executives and officials in charges of finance and accounting delivered a briefing session the conditions of the cooperative and farm households. Problems now facing the cooperative are the financial difficulties of member farmers forcing them to default on their payments to the cooperative, an inadequate amount of funds at its disposal which forces it to rely heavily on loans from BAAC for the clearance of debts, and stagnancy in farm produce prices.

As for facilities, a filling station, shops and a milk processing plant have been built around the handsome head office of the cooperative. They are as large as those run by Japanese multipurpose agricultural cooperative societies. The cooperative is planning to upgrade and expand its facilities in the future.

The Sikhu Agricultural Cooperative is an outstanding success story in Thailand together with the Pimai Agricultural Cooperative. In this regard, the new president of the Sikhu Agricultural Cooperative, an ex-IDACA participant, pointed out among other things, "Our success derives from the concurrence of member farmers, cooperative personnel and cooperative executives on their objectives."