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749 Rice Combine Harvester Industry in the Central Region of Thailand

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749 Rice Combine Harvester Industry in the Central Region of Thailand The 9th ASAE International Conference: Transformation in agricultural and food economy in Asia 11-13 January 2017 Bangkok, Thailand 749 11 Rice Combine Harvester Industry in the Central Region of Thailand Rice Combine Harvester Industry in the Central Region of Thailand Saroj Aungsumalin and Nugool Kornyuenyong Rice Combine Harvester Industry in the Central Region of Thailand Saroj Aungsumalin1 and Nugool Kornyuenyong1 Abstract The study had the following objectives: first, to study the present conditions of rice combine harvester industry, second, to study the present policies and measures affecting the industry; and third, to provide recommendations to improve the industry. The study was conducted in the central part of Thailand during 2015-16. Secondary data were collected from various government offices and universities. Primary data were collected from combine harvester factories, and others stakeholders. Findings were described with percentage, and average statistics. The rice combine harvester factories could be divided into two groups, big and small. Domestic markets were the principal target and export markets were insignificant. The “product innovation” was based on the copy and development method and their investment in R&D were minimal. High precision tools and computer-aided programs were used mainly by big factories. All managerial decisions were done mainly on the basis of the owners’ experiences. Some policies and measures were directly or indirectly beneficial, and some were binding. None of the surveyed firms used the facilities. Fiscal and monetary measures could be used to increase the performance of the industry. They should help increase both demand for and supply. For example, export tax credit should be a measure to stimulate export demand. Investment tax credit should be introduced to encourage firms to invest in new or sophisticated equipment. Professional qualification standards should be introduced to help raise the workmanship. All expenses for various trainings should be tax deductible. A sufficient amount of budget should be continually allocated to involving offices and universities to do researches and development. Key words: Rice combine harvester, rice combine harvester industry, central region, Thailand JEL classification: Economic Development, Innovation, Technological Change, and Growth 1 Special advisor, Department of Cooperatives, Faculty of Economics, Kasetsart University, Bangkok, Thailand The 9th ASAE International Conference: Transformation in agricultural and food economy in Asia 11-13 January 2017 Bangkok, Thailand 750 Introduction The study had the following objectives: first, to study the present conditions of rice combine harvester industry; second, to study the present regulations and measures affecting the operation of the rice combine harvester industry, and third, to provide recommendations to improve the industry. The study was conducted in the central part of Thailand between May, 2015 and April, 2016. Secondary data were collected from various government offices and universities. Primary data were collected from various target groups as follows: big combine harvester factories, small combine harvester factories, custom hiring operators, custom hiring brokers, a leasing company, and combine harvester exhibitions. Descriptive statistics were used in data analysis. Findings were described with frequency, percentage, and average. This report has six parts. Apart from the introduction in the first part, a brief explanation of the development of rice combine harvester in Thailand is given in the second part while the present situation of the Thai rice combine harvester industry is explained in the third part. In the fourth, fifth and sixth parts, problems, government policies and measures, and recommendations are discussed. Brief Development of Rice Combine Harvester in Thailand Mr. Deberiddhi Devakul and officials at the Agricultural Engineering Section, Rice Department, Ministry of Agriculture and Cooperatives comprised the first group of forerunners who seriously conducted research and developed rice harvesting machines in Thailand during 1954-1963. However, due to many reasons, the developed machines were not accepted among farmers. Later, there were attempts to import rice harvesting machines from western countries. The introduction of these machines to the farmers were not successful either as they were too big and too heavy to use in Thailand’s rice fields. Nevertheless, the study to build or modify rice harvesting machines has never stopped. In 1978, the Agricultural Engineering Section developed a new prototype based on the front-mounted reaper from Japan. It was introduced to farmers in 1979. Since it was small and practical, a demand for it greatly increased. Many manufacturers made a request to use and develop the prototype. During that period, Chinese reapers, and Kubota reaper and cutter binders were imported and introduced to Thai farmers. The first lot of the Chinese reapers was proved to be more effective, and by the end of 1980, few thousand units were imported and sold. Six manufacturers1 started imitating, developing and producing the machines. In 1981, some machines were also imported from the U.S. Although, the adoption rate was very high, many farmers, especially in the central plain, were not happy as these rice harvesting machines were too heavy and unable to work in the rice fields, which were wet and soft. In addition, they were not suitable for harvesting the popular rice varieties, which had high stems. When 1 Small workshop or garage The 9th ASAE International Conference: Transformation in agricultural and food economy in Asia 11-13 January 2017 Bangkok, Thailand 751 harvested by the machines, the rice fell to the floor. Imported machines had very high prices too. In 1982-1983, local manufacturers in Ayutthaya developed a prototype of rice combine harvester by attaching a modified Chinese reaper to a locally produced axial flow rice thresher. Each manufacturer produced only one unit and took the machine out for testing. With their machines, they earned money by providing custom hiring services to farmers. The combine harvesters were rapidly and widely adopted although they were not up to the acceptable technical standard. They were inefficient and frequently broken during operation. In 1985, there were around 30 small manufacturers. Mass production of rice combine harvesters started in 1987 when a pioneer small firm joined a business group to establish a factory. At the same time, the rice thresher manufacturers, whose business was affected by farmers’ adoption of the combine harvesters, changed their product lines to produce this type of newly developed machine. Therefore, at present, Thailand can produce by itself the rice combine harvesters suitable for the local conditions and can export them to other countries. It is one hundred percent Thai innovation. The Present Situation of Thai Rice Combine Harvester Industry Rice combine harvester firms in Thailand could be classified into two groups. The first one comprised big registered firms and the other one consisted of small unregistered firms. The big firms were registered as limited companies. There were only five of them, i.e., Kasetphattana Industry Co. Ltd., Thai Combine Co. Ltd., Sakpattana Karnkaset Co, Ltd., Thai Seng Co. Ltd., and Siam Kubota Co. Ltd. They had high capital investment, hired a lot of workers, produced many products, and sold their products in both domestic and overseas markets. Small firms were unregistered entrepreneurs or single proprietors. They were not found to be a partnership or limited company. These entrepreneurs developed themselves from workers in original rice combine harvester firms, big and small. Some were children who had helped their parents and, later, separated to set up their own businesses. Formerly or currently, many entrepreneurs also offered rice custom hiring services. There was no official statistics of how many small rice combine harvester firms there were in the central plain or in the country. A rough estimation indicated that there were more than 300 firms. Examples of small rice combine harvester firms were Woraphot Garage, Kinnaree Garage, Parn Chareon garage and Thai Chareon Garage. The 9th ASAE International Conference: Transformation in agricultural and food economy in Asia 11-13 January 2017 Bangkok, Thailand 752 Marketing The type of marketing approach that these firms used was a mix of product-driven and sales-driven ones. The firms focused on their products and competed with others’ products. They tried to make their products stand out or create an image that their products were better than others. Therefore, when the firms offered a newly developed product, they used the product-driven marketing approach. However, when the market was close to a saturation point or when other producers were catching up by offering similar or new products, the firms changed to use the sale-driven marketing approach. They competed with other producers by prices and sale promotions. It was estimated that the country’s total demand for rice combine harvesters was 23,000 units. At present, there were around 13,000-14,000 rice combine harvesters in the market. It can be concluded that the market was not yet oversupplied. Demand shortages were basically due to lacking purchasing power. With regards to production capacity, it was estimated that, excluding the production of Siam Kubota Co., the total production capacity of all firms, big and small, was
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