A Community Enterprise in Khon Kaen Province, Thailand

Kasetsart Journal of Social Sciences 42 (2021) 495–500 Kasetsart Journal of Social Sciences journal homepage: http://kjss.kasetsart.org Key characteristics for sustainable sugarcane: A community enterprise in Khon Kaen Province, Thailand Panatda Utaranakorn*, Teera Kiatmanaroach Department of Agricultural Economics, Faculty of Agriculture, Khon Kaen University, Muang, Khon Kaen 40002, Thailand Article Info Abstract Article history: This research aimed to identify the key characteristics that facilitate effective Received 1 November 2019 Revised 8 June 2020 management performance; and to analyze the internal and external environmental Accepted 15 July 2020 factors of a sugarcane community enterprise in Khon Kaen Province, in Available online 31 July 2021 Northeastern Thailand. The results indicated that the key characteristics were instrumental in the capacity of collecting and supplying sugarcane to reach the Keywords: enterprise’s yearly quota. The community enterprise also defines how profits and community enterprise, key characteristic, benefits are divided among members. The active internal relationships within the kinship relation, group, called ‘kinship relation’, create a high level of trust, reliability, and sugarcane, honesty; and promote collective responsibility among members. Lastly, annual sustainable performance support from financial institution, namely, credit with low-interest rates, plays an important role in the enterprise’s sustainable performance. To further develop the sugarcane community enterprise and to achieve sustainable performance, we recommend that the committee and members share responsibility with honesty and harmony, plan production to meet annual quotas, divide income and benefits equally, and properly manage the loans and equity provided by financial institutions. © 2021 Kasetsart University. Introduction initially established in 2001 to run businesses, legalize the status of groups, and generate income for people across Collective action in terms of community enterprises, several communities (Secretariat Office of the Community cooperatives, and farmer groups plays an important role in Enterprise Promotion Board, 2005). Community enterprises improving livelihoods and alleviating poverty, especially have been included in Thailand’s 10th and 11th plans of for small-scale farmers in rural areas. Farmers are thereby economic and social development to increase farmers’ able to link to market directly and are provided access to marketing power and to improve their livelihoods capital with low-interest rates, resulting in increasing (Humphries & Kainer, 2006; Office of the National income (Kumar, Wankhede, & Gena, 2015; Mhembwe & Economic and Social Development Council, 2007). Such Dube, 2017). In Thailand, community enterprises were government initiatives have encouraged farmers to form group/community enterprises and work to their mutual * Corresponding author. advantage; however, these organizations often face several E-mail address: [email protected] (P. Utaranakorn). problems such as internal management, and lack of https://doi.org/10.34044/j.kjss.2021.42.3.07 financial, managerial, and marketing skills, as well as 2542-3151/© 2021 Kasetsart University. 496 P. Utaranakorn, T. Kiatmanaroach / Kasetsart Journal of Social Sciences 42 (2021) 495–500 inadequate financial support needed for large capital small and medium-scale producers. Manyara and Jones investments (Hunnak, Fuengian, & Montriwat, 2019; (2007) described the community enterprise as a community- Mahain, Phungwattananukul, Pongkachang, & owned, sustainable, and community-based initiative in Wongkhumhunghan, 2011; Nambure, 2012; Sakolnakorn which the local community engage in its development and & Sungkharat, 2014; Somswasdi, Thongsukhowong, & management, and shares in its benefits. Nakapaksin, 2015). Previous studies on the improvement of community Sugarcane is an important economic crop, accounting enterprises have examined issues of the most suitably for roughly 21 percent of Thailand’s agricultural GDP applied practices, mostly gained through empirical (Bank of Thailand, 2017). Accordingly, the formation of evaluation and understanding. Barham and Chitemi sugarcane community enterprises has been set as one of the (2009), for example, stated that strong internal institutions, country’s national policy targets. Sugarcane community functioning group activities, and sound capital assets play enterprises support sugarcane farming practices and key roles in improving the marketing performance of improve farmers’ negotiation and bargaining skills, farmer groups. Meerkerk, Reinout and Astrid (2018) allowing for better prices and higher incomes (Kumdum & determined that the most important configuration leading Kiatmanaroch, 2017). Despite the numerous benefits, the to a durable community enterprise is the presence of social formation of such enterprises has not become widespread, capital, strong entrepreneurial leadership, and a strong nor accepted by most sugarcane farmers. The failure of business model. More recently, Hunnak et al. (2019) past sugarcane community enterprises has been attributed analyzed the problems and obstacles of an accounting primarily to the lack of sustainable management (Bank of community enterprise in Thailand. Their research suggested Thailand, 2017). As a result, few sugarcane farmers are that there are two basic approaches to develop a community willing to belong to these enterprises, and a lack of enterprise; provide the tools necessary to store financial information inhibits their development. documents, and to appoint staff responsible for the task. To date, few studies have been conducted on how Changwatchai and Santipolvut (2015) aimed to assess community enterprises can be managed for sustainable potential ways to enhance community enterprise performance. Therefore, the primary aim of this research is development. Their results proposed a five-year plan, to identify the crucial underlying characteristics that consisting of ten projects, which included educational improve group management for sustainable production seminars and the use of recommended materials. practices. In particular, the objectives were to identify the Somswasdi et al. (2015) established guidelines to improve key characteristics that facilitate the effective management community enterprise management through the evaluation of sugarcane community enterprises through an empirical of its strengths, weaknesses, opportunities and threats. understanding of the key lessons learned from a successful They concluded that the chief obstacle inhibiting community enterprise; and to examine its internal and development was the lack of qualified knowledgeable external environments. The information is intended to internal management. They stated that it is crucial to provide key guidelines for the successful implementation provide training programs to improve managerial of sugarcane community enterprises and the development knowledge and skills. Santipolavut and Sripruetkiat (2012) of new groups. further noted that the determinants of community enterprise development are the community enterprise plan, customer Literature Review database management, intra-community relationships, and community involvement. They identified three guidelines Community enterprise is a particular entrepreneurial necessary for a community enterprise to become an SME: form of active citizenship that provides jobs, services and (1) the development of increased production and standard, other benefits for its resident members (Bailey, 2012; including the appointment of a new generation leader; (2) Healey, 2015; Kleinhans, 2017; Somerville & McElwee, the creation of marketing infrastructure, such as setting up 2011). Representing a new form of self-organization that a local product distribution center and promoting acts more like a business, a community enterprise is e-commerce trade; and (3) management development. managed by a collective capacity of community members Prayukvong (2005) identified the key factors of success as providing added value for its members (Kleinhans, 2017; the process of good thinking, constructive use of wisdom Ministry of Agriculture and Cooperatives, 2005). Donovan, among leaders and group members, and accessible social Dietmar, and Nigel (2008) defined community enterprise capital. as a business based on production and service with multiple Accordingly, to assess how sugarcane community objectives, with profit maximization as one of its primary enterprises are sustainably managed and maintained, a goals. Rural community enterprises are usually made up of conceptual framework was developed from the work of P. Utaranakorn, T. Kiatmanaroach / Kasetsart Journal of Social Sciences 42 (2021) 495–500 497 Barham and Chutemi (2009) and Somswasdi et al. (2015); the members, who are your close friends, and what kind of shown in Figure 1. Before addressing the issues involving relationship do you have?” Subsequent data analysis how a community enterprise should be managed for consisted of both content and descriptive analyses. The sustainable performance, they concluded that it was network characteristics of the community enterprise were essential to understand the enterprise’s history, aspects of outlined using UCINET 6 for windows, version 6.665. managerial characteristics, and internal relationships. SWOT and TOWS analyses were applied to determine the SWOT and TOWS analyses were employed to examine the internal and external environments of the community

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