ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
ภาคผนวก ก รายงานภาษาอังกฤษ The Promotion of Integration of SMEs into Agribusiness Global Value Chains in APEC Region
1. Introduction
Agricultural business encompassing food and non-food sectors plays a strategic role in Asia Pacific economy and is the backbone of many countries in the region. The integration of agriculture business is critical for the growth of APEC member countries and helps enhance the level food security, especially for countries having insufficient production capacity to serve their own markets.
The agricultural value chain is the networks of stakeholders involved in growing, processing, and selling the agricultural products to consumers. This constructs a network of (1) the producers that research, grow, and trade agricultural commodities, such as rice, fruit, vegetable, cassava, seafood, and poultry; (2) the processors, both primary and value added ones that harvest, butcher, process, manufacture, value adding, and market agricultural products, such as flour, canned food, juice, biscuit, ham, bacon; and beverage; (3) the distributors, including wholesaler, retailers, distribution center, and logistics service providers, that market, move, deliver, storage, distribute, and sell products; (4) the consumers that shop, purchase and consume products; and (5) government and non-government organizations (NGOs), and regulator that monitor and regulate the entire agricultural products from producers to consumers.
Each stakeholder has interfaced different issues along the entire value chain. For example, producers may cope with issues of production constrains, commodity price fluctuation,
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 1 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค financial support, plant diseases, inspect pests, and risks from natural scarcity and natural disaster. Processors are likely to face issues of cost management, quality standard, labor shortage, and new requirement for skill and technology development. Distributors are expected to handle issues of marketing, demand management, consumer relationship management, international trade regulations, logistics, and traceability. Consumers concerns may cover issues of product pricing, production availability, food security, food safety, health and wellnesses. Government and NGO attempt to monitor and support the whole range of value chain and use appropriate measures for selected value chain such as public health and safety, subsidies, taxation, security, standardization, research and development, and financial support,
Collaboration amongst various stakeholders along the value chain is more important than ever. The interdependencies between stakeholders are no longer mainly between the functions most closely linked along the chain but can encompass stakeholders anywhere in the network. Every stakeholder must be responsible and accountable for sourcing, handling, and quality and cost control of products along the value chain to avoid ruins of company’s reputation.
Global trade and production of agricultural products are increasingly structured through global value chains (GVC). The concept of GVC was introduced in the early 2000s and has been employed to capture a number of characteristics of the global economy. The global value chain in agricultural business encompasses a network of global buyers and global suppliers. GVC gives insights on economic governance and helps identify firms and actors that control and coordinate activities in production networks. Understanding government structures is important for policymaking, in particular to assess how policies can have an impact on firms and the location of activities.
Small farmers, growers, and SMEs have increasingly tied to markets and agro based industries through business linkages and alliances with each other and other large enterprises and with other value chain stakeholders. The promotion of the integration of
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 2 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Small and Medium Enterprises (SMEs) into agribusiness global value chain (GVCs) is necessary for Asia Pacific region to achieve its mission of promoting balanced and inclusive growth through trade and investment liberalization. This paper describes the importance of agricultural trade and business in APEC region, especially from Southeast Asia and Thailand perspective, current role of SMEs in participating in GVC of selected products traded internationally, enabling factors of SMES into GVCs, issues and challenges faced by SMEs, relationship between SMEs and large enterprise, governments, and stakeholders, and recommendation to strengthen and promote SMEs integration into agribusiness GVC.
Table 1 highlights the importance of agricultural products of APEC member countries including major agricultural product produced and globally recognized, major agro based export and import items. The table indicates the possibility of trading, competitive advantage, and integration of agro based global value chain. For example, Thailand has established competitive advantage in producing rice, rubber, sugarcane, cassava, chicken meat, and tropical fruits while importing products from overseas such as soybean, cotton, and cold climate fruit. It then indicates the possibility of complimentary trade connection amongst APEC countries.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 3 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Table 8-1: Important Agricultural Products of APEC member countries1
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized
countries
Australia Meat, wheat, dairy Australian Angus Wheat, beef, cotton, Processed food, products, sheep beef wool, wine, sheep wine, pork, pastry, meat, chicken meat, barley, chocolate products, Barossa valley wine meat, cotton lint, rapeseed, cheese, coffee, processed
rapeseed, grapes, Hunter valley wine forage product, fruit, soybeans, sugar cane, wool, milk products, beverage, beer, pet South Australia barley, cottonseed, tallow, malt, food, sugar, frozen wine pork, pulses, processed food potatoes, frozen
almonds, chick vegetable, palm oil, peas, rice, potatoes, cigarettes, lentils, eggs, preserved sugarcane, fruits vegetable, olive oil
Brunei Chicken meat, Tutong coconut oil Rubber, cattle, tea, Beverage, processed Darussalam eggs, fruits, pastry, soybean oil, food, rice, flour, vegetables coffee, dried meat, pastry, sugar, beef, soya source, dates palm oil, coffee, sheep meat, cereals, infant food, milk product, chicken
Canada Rapeseed, pork, Canadian rye Wheat, rapeseed, Processed food, wheat, cattle meat, whisky, rapeseed oil, pork, wine, pastry, beef, chicken meat, soybeans, processed coffee, sugar,
1 FAOSTAT prepared by Food and Agriculture Organization of United Nations
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 4 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
soybeans, potatoes, Canadian whisky, food, pastry, dry beverage, rubber, maize, lentils, dry peas, beef, chocolate beer, fruits, pet Ontario Icewine, peas, eggs, product, lentils, food, pork, cereals, blueberries, barley, frozen potatoes, grapes, lettuce, oats, turkey meat, fruit, sugar, oats, bananas, soybeans tomatoes, dry coffee, beverage, beans, mushroom, cereals, fishery linseed product, wood product
Chile Grapes, pork, Chile Pisco (spirit) Wine, grapes, Beef, sugar, fat, food chicken meat, milk apples, cranberries, wastes, soybeans, products, apples, cherries, pork, maize, wheat, cattle meat, kiwi processed food, processed food, fruit, plums, fishery products, sorghum, beverage, peaches, avocadoes, chicken chicken meat, nectarines, meat, kiwi fruit, cereals, pet food, potatoes, eggs, maize, raisin, pears, soybean, macaroni, what, tomatoes, plums beer, gluten feed, turkey meat, chocolate products, cherries, pastry, bananas, avocadoes, sugar rubber beet, pears, maize, almonds, fishery products
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 5 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
China Pork, rice, fresh Dongshan Bai Lu Processed food, Soybeans, cotton, vegetables, eggs, Sun (asparagus) garlic, fruit, canned rubber, palm oil, tomatoes, chicken chicken meat, wool, cattle, sugar, Guanxi Mi You meat, cattle meat, vegetables wine, dry cassava,
apples, wheat, (pomelo) dehydrated, soybean oil, pork, milk products, preserved milk products, JInxiang Da Suang potatoes, garlic, vegetables, tea, beverage, infant (garlic) maize, cotton lint, tomatoes paste, food, processed
mushroom, Lixian Ma Shan Yao apples, dry bean, food, rubber, cucumbers, (yam) food wastes, pet chicken meat, rice, watermelons, food, rapeseed, wool Longjing cha (tea) chilies, pepper, unmanufactured sheep
groundnuts, Pinggu Da Tao tobacco, mandarins, honey, fishery (peach) chicken meat, products, oilseed, ginger, soybean onion, soybean, Shaanxi ping guo sugarcane, tea, (apple) wheat, wood Yancheng Long Xia (crayfish)
Zhenjiang Xiang Cu (vinegar)
Longkou Fen Si (vermicelli)
Jinhua Ham
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 6 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
Hong Kong Pork, spinach, N/A Chicken meat, Chicken meat, wine, lettuce and beverage, processed processed food, chicory, fruits, food, pistachios, pork, milk products, onions, fishery wine, grapes, fresh beef, cigarettes, products fruit, fishery pistachios, ice products water, beverage, grapes, pastry, chocolate, canned chicken, almonds, oranges
Indonesia Rice, palm oil, Arabika Gayo coffee Palm oil, rubber, Wheat, cotton, rubber, chicken palm kernel oil, sugar, soybeans, Sumbawa honey meat, cassava, fatty acids, coffee, maize, processed
maize, coconuts, Indonesia salak coconut oil, cocoa food, milk, cloves, bananas, palm beans, processed feed supplements,
kernels, mangoes, food, cigarettes, flour of wheat, tropical fruits, margarine short, garlic, beef, cassava pork, cattle meat, cocoa powder, starch, apples, cocoa, eggs, sugar cocoa butter, mandarins, , cane, chili, pepper, pepper, pastry, groundnuts coffee, fishery canned pineapple, products, fishery tea, fishery product, products, forest wood products products, medical herbs, wood
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 7 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
Japan Rice, milk Tajima beef Processed food, Maize, cigarettes, products, eggs, cigarettes, pastry, pork, rubber, wheat, Kobe beef chicken meat, beverage, rice beef, canned
pork, cattle meat, Sanda beef fermented chicken, coffee, fresh vegetables, beverage, apples, soybeans, processed Matsusaka Beef potatoes, cabbage, wheat flour, fishery food, rapeseed,
apples, tomatoes, Yubari melon products, food wine, sugar, milk lettuce and wastes, tea, products, bananas, Miwa somen (pasta) chicory, chocolate products, forest products, pet
strawberries, Japanese sake infant food, beer, food, fruits onions, mandarins, soya sauce, sesame sugar beet, carrot, oil pears, cucumbers, grapes, fisher products, tea
Malaysia Palm oil, chicken Sarawak pepper, palm oil, rubber, Palm oil, rubber, meat, palm fatty acids, palm cocoa bean, sugar, Borneo virgin kernels, rubber, kernel oil, palm kernel oil, coconut oil rice, eggs, pork, processed food, processed food, duck meat, cocoa power, cocoa soybeans, wheat, vegetables, butter, flour, pastry, cotton, beverage,
pineapples, coffee, cotton, skimmed milk, bananas, coconuts, coconut oil, soybean unmanufactured oilseed, pepper, oil, wood products tobacco, coconut, tomatoes, cattle flour, dry onion
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 8 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
meat, fishery products
Mexico Cattle meat, Mexico mescal Tomatoes, beer, Maize, soybeans, chicken meat, milk (spirit) sugar, beverage, wheat, rapeseed, products, eggs, avocados, cotton, sorghum, Mexico tequila pork, sugar cane, processed food, milk products, pork, (spirit) maize, tomatoes, coffee, peppers, chicken, sugar, cake, chili and pepper, Hermosillo beef pastry, chocolate chocolate products, mangoes, products, processed palm oil, cheese, oil Papantla vanilla avocadoes, lemons, fruit, fresh seed orange, bananas, vegetables, beef, beans, wheat, frozen vegetables, strawberries, pork, dry onion, cotton, coffee, cotton, fishery honey, pineapple, products fishery products, wood products
New Milk products, Manuka honey, Milk products, Cocoa, soybeans, Zealand cattle meat, sheep sheep meat, beef, palm oil, processed Puhoi cheese, meat, wool, kiwi kiwi fruit, cheese, food, rapeseed,
fruit, chicken meat, Gold kiwifruit, wine, processed wheat, wine, maize, grapes, apples, food, wool, apples, cattle meat, grapes, New Zealand potatoes, pork, malt and flour, canned chicken, butter, onion, eggs, wheat, infant food, onion, pastry, food wastes,
tomatoes, maize, New Zealand pastry, wine, cigarettes honey, carrots, mussels fishery products
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 9 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
fishery products, wine
Papua New Meat, fruits, Mamou pepper Palm oil, coffee, Wheat., sheep meat, Guinea bananas, palm oil, cocoa bean, coconut food preparation, berries, pork, oil, rubber, copra, beef, buckwheat, coconuts, maize, tea, vanilla, fishery sugar, beverage, coffee, vegetables, products, wood tobacco products, sweet potatoes, pork, chicken meat, cocoa, palm margarine short, kernels, cassava, soybeans sugar cane, wood, fishery products
Peru Chicken meat, rice, Peru Pisco (spirit) coffee, preserved Maize, wheat, potatoes, milk vegetables, grapes, soybeans, vegetable product, plantains, asparagus, oil, cotton, asparagus, sugar avocados, pepper, processed food, cane, coffee, eggs, mangoes, milk sugar, rubber, palm mangoes, grapes, products, plantains, oil, malt, milk chili, peppers, pastry, cocoa bean, products, infant pork, onion, tangerine, frozen food, lentils, avocadoes, vegetable, dry processed fruit, pineapples, fishery beans, dry onions, wine, apples, barley products, cassava, fishery products artichoke
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 10 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
The Rice, pork, Cebu process Coconut oil, Wheat, processed Philippines bananas, coconuts, mango, bananas, sugar, food, soybeans, chicken meat, coconut desiccated, milk products, beef, Guimaras mango, tropical fruit, canned pineapple, compounded feed,
vegetables, sugar Dagupan bangus, milk products, tobacco, butter, milk cane, pineapples, unmanufactured whole dried, infant
maize, cattle meat, tobacco, processed food, chicken meat, mangoes, eggs, fruit, cigarettes, cocoa power, butter, buffalo meat, processed food, apples, coffee, meal cassava, rubber, mangoes, rubber, meat, flour wheat, goat meat, cashew pineapples, copra nuts, fishery pineapple juice, products chicken meat, wafers, fishery products, wood
Russia Milk products, Russia vodka Wheat, sunflower Wheat, sheep meat, chicken meat, (spirit) oil, barley, food preparation, cattle meat, pork, chocolate products, beef, buckwheat, wheat, potatoes, cigarettes, sugar, tobacco sunflower seed, processed food, products, chicken eggs, sugar beet, wheat flour, vodka, meat, malt, fruits, tomatoes, apples, rapeseed oil, maize, meat, vegetables, sheep soybean oil, beer, meat, onions, dry peas, linseed, barley, carrots, pork sausage, currants, rice, maize, fishery
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 11 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
products, honey, fishery products, wood wood
Singapore eggs, fresh N/A Beverage, processed Beverage, palm oil, vegetables, food, cigarettes, processed food, spinach, lettuce, flour, infant food cigarettes, wine, chicory milk products, cocoa beans, chicken meat, pastry, pork, beef, beer, cloves
Republic of Rice, pork, chicken Korea Ginseng, Processed food, Maize, rubber, Korea meat, cattle meat, cigarettes, sugar, wheat, pork, sugar, Korea Ginseng tea vegetables, milk beverage, coffee, beef, processed products, eggs, cider, pastry, food, cotton, cabbages, preserved soybeans, coffee, strawberries, vegetables, chili, cattle meat, soybean onion, garlic, pepper, beer, oil, palm oil, milk mandarins, apples, soybean oil, food products, forage pear, tomatoes, wastes products, chocolate grapes, chili, products, bananas pepper, persimmons, duck meat, fishery products
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 12 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
Chinese Pork, chicken Formosa tea Processed food, Maize, soybeans, Taipei meat, rice, eggs, beverage, pastry, processed food, Jiajan tea nuts, fresh fruits, frozen vegetable, wheat, cotton,
vegetables, tea, fruit juice, beverage, sugar, pineapples, milk processed fruit, palm oil, cassava products, duck soya sauce, sesame starch, flour, beer, meat, mangoes, oil apples, chicken cabbages, tea, meat, milk products fishery products
Thailand Rice, rubber, Hom Mali rice Rubber, sugar, soybean, cotton, sugarcane, cassava, chicken meat, processed food, Sangyod rice chicken meat, processed food, dry beverage, flour,
pork, mangoes, Doi Tung coffee cassava, starch apples, milk egg, fresh fruit, cassava, pet food, products, wheat, Doi Chang coffee pineapples, palm canned pineapple, malt, flour of wheat,
oil, cattle meat, Nont Durian beverage, preserved instant food, fruits, bananas, dairy fruit, fishery fishery products, Phuket pineapple products, fresh products, rice, palm palm oil
vegetables, chili, Sriracha pineapple oil, fry fruit, fresh peppers, coconuts, fruit, pineapple duck meat, fishery juice, food sweet products, corn corn, poultry
United Cattle meat, milk Idaho Potato, Soybeans, maize, Coffee, beverage, States products, chicken wheat, cotton, pork, wine, rubber, beer, Florida orange juice meat, maize, beef, chicken meat, beef, pastry, soybeans, pork, almonds, beverage, processed fruit,
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 13 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
APEC Major Agricultural Samples of local Major Agro based Major Agro based products globally Export Item Import Item member Products Produced recognized countries
wheat, cotton lint, Napa Valley Wine, milk product, pet tomatoes, bananas, tomatoes, eggs, food, wine, pastry, chocolate products, Tennessee whiskey, grapes, turkey soybean oil, rapeseed oil,
meat, potatoes, Vidalia onions, chocolate, fishery beverage, sugar, rice, almonds, products, cocoa beans, palm Texas Lockhart beef strawberries, unmanufactured oil, grapes, chili,
lettuce, apples, tobacco peppers oranges
Vietnam Rice, pork fresh Bin Thuan dragon Coffee, rubber, Soybeans, cotton, vegetables, coffee, fruit, cashew nut, dry chicken meat, fresh fruit, cashew cassava, pepper, wheat, beverage, Boun Ma Thout nuts, cassava, fresh fruit, tea, palm oil, maize, coffee, rubber, cattle meat, processed food, rubber, garlic, food chicken meat, Ha Long fried pastry, honey, wastes, malt, sugar cane, calamari, sugar, coconuts, tobacco, sesame bananas, pepper, cigarettes, pork, seed Hoa Loc mango, eggs, buffalo meat, watermelons,
berries, tea, Phu Quoc fish sauce cinnamon, beer, groundnuts, vegetables in Mot bui do rice, pineapples, fishery vinegar, fisher
products Tan Cuong tea, products, rice
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 14 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
2. Importance of Agribusiness and SME in Southeast Asia
Southeast Asian region comprising ten member countries namely Brunei, Cambodia, Indonesia, Laos PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam so called “ASEAN”.
ASEAN is one of the most productive agricultural baskets in the world. In 2012, the region produced 129 million tons of rice, 40 million tons of corn, 171 million tons of sugarcane, 1.44 million tons of soybean, and 70.34 million tons of cassava.
The agricultural sector is one of twelves priority sectors targeted by ASEAN to achieve the deeper integration in ASEAN Economic Community through increased efforts to ease trade between member states, allowing faster movement of perishable goods across long distance. The plan is to develop niched based agriculture, and support it with reduction of trade barriers and construction of needed infrastructure.
The roadmap for integration of agro based products sector as agreed by ASEAN leaders in year 2012 covers the following issues:
(1) Tariff elimination: tariff elimination on all identified products
(2) Non-tariff measures: (a) establishing databased of ASEAN NTMs to ensure transparency, (b) establishing clear criteria to identify measures that are classified as trade barriers, (c) establishing clear and definitive work program for barrier removal, (d) adopt WTO agreement on import licensing procedures and develop implementation guidelines appropriate for ASEAN
(3) Rules of origin: (a) making rules of origin more transparent, predictable and standardized by referencing best practices of regional trade agreements and WTO, (b) adopting substantial transformation as alternative criteria for conferring origin status
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 15 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(4) Customs procedures: (a) extending application of ASEAN harmonized tariff nomenclature for extra ASEAN trade, (b) ensuring full implementation of green lane system at entry points of all member states, (c) fulling obligation of WTO agreement on customs valuation, (d) adopting service commitment by ASEAN customs authorities, (e) developing the single window approach, including electronic processing of trade documents at national and regional levels.
(5) Standards and conformance: (a) accelerating the implementation and development of sectoral mutual recognition arrangements (MRA), (b) encouraging domestic regulation to recognize test reports issued by testing laboratories which are already accredited by national accreditation bodies in ASEAN, (c) setting clear targets and schedules for harmonization of standards where international standards are not available, and align national standards among member states, (d) harmonizing and developing technical regulations for national application, (e) ensuring compliance with requirements, rights and obligations of WTO agreements on technical barriers to trade and application of sanitary and phyto sanitary measures, (f) exploring development of ASEAN policy on standards and conformance to further facilitate the realization of ASEAN economic community
(6) Logistics services: (a) promoting efficient door to door cargo transport and cross border transport facilitation, (b) improving land transport network infrastructure and service to achieve better interconnectivity, (c) strengthening intra-ASEAN maritime and shipping transport services, (d) establishing of enabling and conducive policy environment for increased private sector involvement and/or public – private partnership in developing transport infrastructure and providing transport logistics facilities and services.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 16 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(7) Outsourcing and industrial complementation: (a) identifying and developing specialization of production processes, research and development, and testing facilities based on comparative advantages of member states, (b) developing guidelines to promote outsourcing arrangements
(8) ASEAN integration system of preferences: endeavoring to expand coverage of ASEAN integration system of preferences scheme by including products in the priority integration sectors
(9) Investment: (a) accelerating opening up of sectors currently in sensitive list, (b) reducing restrictive investment measures in sensitive list, (c) completing progressive elimination of restrictive investment measures in temporary exclusion list, (d) identifying program and activities to promote investments in ASEAN, (e) establishing network of ASEAN free trade zones to facilitate outsourcing activities, (f) undertaking more efficient joint ASEAN facilitation and promotion measures to promote foreign direct investment, (g) giving special incentives from Cambodia, Laos, Myanmar ,and Vietnam, (h) promoting the relocation of investment to Cambodia, Laos, Myanmar, and Vietnam for labor intensive manufacturing activities.
(10) Trade and investment promotion: (a) intensifying intra and extra ASEAN joint promotion efforts regularly, (b) organizing trade missions to promote FDI ASEAN and arranging promotion activities to assist Cambodia, Laos, Myanmar, and Vietnam, (c) undertaking more effective measures for new sources of inward foreign direct investment, especially from China, India, and Korea.
(11) Intra-ASEAN trade and investment statistics: (a) establishing an effective system to monitor intra ASEAN trade and investment.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 17 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(12) Intellectual property right: (a) expanding scope ASEAN intellectual property rights cooperation beyond trademarks and patents by including cooperation in copyrights information exchange and enforcement.
(13) Movement of business persons, skilled labor, talents and professionals: (a) developing ASEAN agreement to facilitate movement of business persons, (b) developing ASEAN agreement to facilitate movement of experts, professionals, skilled labor in ASEAN
(14) Facilitation of travel in ASEAN: (a) harmonizing procedures for issuance of visas to international travelers. (b) Providing visa exemption for intra- ASEAN travels by ASEAN nationals.
(15) Human resource development: (a) developing and upgrading skills and capacity building through join trading and workshops.
(16) General requirements for food hygiene and safety in ASEAN: (a) formulating ASEAN requirements to goods hygiene and for national application, (b) formulating ASEAN requirements to good hygiene and safety practices in selected sectors that to be observed at the time of preparation, processing, manufacturing, packaging, storing, transportation, distribution, handling and offering for sales or supply to final consumer
(17) Harmonization of national standards with relevant international standard: (a) harmonizing national standards with international standards in food sectors such as CODEX, OIE, IPPC, especially from HS chapter 15- 23 to support the realization of MRA for prepared foodstuff in ASEAN, (b) developing a mechanism to encourage the establishment of regional risk assessment by scientific bodies in ASEAN, (c) identifying international standards codex and IPPC with focus on those standards with significant
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 18 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
trade value and those with potential for trade in future for harmonization in ASEAN
(18) Promotion and strengthening the compliance of agro based industry to regional and international requirements: (a) promotion of HACCP, GMP, and GHP for processed food industry. Priority should be given to SME by implementing pilot program.
(19) Strengthening testing facilities in ASEAN and recognition of testing result: (a) establishing of ASEAN reference testing laboratories in area of microbiology, mycotoxin, pesticide residues, veterinary drug residues, heavy metals and trace elements and genetically modified organism (GM0), (b) recognizing ASEAN domestic regulators for test reports issued by ASEAN reference testing laboratories and those already accredited by national accreditation bodies who are signatories to ILAC, APLAC MRA
(20) Harmonization of sector specific technical regulatory regime in ASEAN: (a) identifying and prioritizing SPS and TBT measures for harmonization in ASEAN, (b) harmonizing identified SPS and TBT measures including harmonization of procedures of registration, pre marketing and post marketing surveillance, (c) developing and implementing MRA in some priority products, and (d) developing ASEAN good agriculture practice (GAP) standards.
(21) Research and development and human resource development: (a) exchanging commercial plating varieties for potential agricultural products among ASEAN countries, (b) initiating collaborative research program for mutually agreed agricultural products among ASEAN countries, (c) exchanging experts in mutually agreed fields, (d) encouraging exchange of research information, and (e) exploring potential areas of cooperation in mutually agreed products,
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 19 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(22) Information: encouraging the establishment of ASEAN early warning system of hazards and outbreaks.
As about 90 percent of all business is Southeast Asia, including agricultural business value chain is SMEs, ASEAN leader agreed on vision set out from 2016 to 2025 as ASEAN will be area having globally competitive and innovative SME by seamlessly integrated SME to ASEAN community and inclusive development in the region. Key measures to achieve strategic vision include (a) promotion of productivity, technology and innovation, (b) increasing access to finance, (c) enhancing market access and internationalization, (d) enhancing policy and regulatory environment, and (e) promoting entrepreneurship and human capital development.
The establishment of ASEAN community is expected to bring benefit to SMEs. The free trade agreement will attract investment from Multinational Corporation (MNCs) or ASEAN’s own indigenous, large scale enterprises, which provide MSMEs with opportunities including those wrought through value chain integration. On the other hand, this competitive environment requires local SME to enhance their productivity in order to integrate with regional and global value chains. ASEAN SME will need to proactively explore opportunities and be able to take advantage of such opportunities. SME in agro based industries in ASEAN has worked with large multinational corporations from APEC through different stage of value chain, Examples include SMEs working with
(1) Global food processing such as Kellogg (USA), WH Group (Hong Kong), Wilmar International (Singapore), Olam International (Singapore), Golden Agri Resources (Singapore), Coca Cola (USA), Pepsi (USA), Ajinomoto (Japan), Mei Holding (Japan), Asahi Group (Japan), CJ Corp (Korea), CPF (Thailand), and Thai Beverage (Thailand).
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 20 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(2) Global food retails such as seven & I holding (Japan), AEON (Japan), Wesfarmers (Australia), Woolworths (Australia), Kroger (USA), and Whole Foods Market (USA), CP All (Thailand). President Chain store (Taiwan), and
(3) Global logistics providers such as Mitsui OSK (Japan), Nippon Yusen (Japan), Nippon Express (Japan), Yamato (Japan), Kawasaki Kisen Kaisha (Japan), China Cosco (China), Hyundai (Korea), and MISC (Malaysia), UPS (USA), and FedEx (USA).
Regarding the integration of SMEs in agro based business into global value chain, ASEAN government has recognized that SMEs have limited information on how to access markets, and are not well aware of issues related to international requirement. Lack of technical knowledge prevents these enterprises from participating in GVC, and thus SMEs’ contribution to exports remains small. The integration of SMEs in agricultural sector into global value chain are highlighted in strategic goal of ASEAN SME roadmap on “enhancing market access and internationalization” by (a) increase SME to access to information on regional and global access and opportunities, (b) promote partnership with Multinational Corporation and large enterprise to increase market access and opportunities, (c) enhance the user of electronic commerce, (d) promote adoption of international standards of quality to facilitate market access, and (e) establish mechanism to assist in increasing export.
3. Agricultural Industry of Thailand and Challenges of Participation in Global Value Chain
Thailand’s food and agricultural industries not only generate several million dollars a year in economic value, but also have been an important part of Thai way of life which still focuses on agriculture. Rice is the country’s most important crop. Thailand is major exporter in world agriculture market such as rice, rubber, cassava, sugarcane and so on. Rice exports in 2014 amounted to 1.3 percent of GDP. Agricultural production as a whole
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 21 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค accounted for an estimated 9 percent of Thai GDP and 40 percent of population works in agriculture related jobs. Other agricultural commodities produced in significant amounts include fish and fishery products, cassava, rubber, grain, chicken, and sugar. Exports of industrially processed foods such as canned tuna, pineapples, and frozen shrimps are on the rise.
4. Snapshot of Thailand’s Agriculture Production
Even though Thailand is a major exporter of agricultural and food products, the contribution of agricultural sector to national economy has been on the decline since the 1950s. Over the last 50 years, the economic contribution of agriculture has dropped from twenty five percent to less than ten percent. Similarly, agricultural exports have fallen from a dominant role in bringing foreign income into the country as most of income earned from country’s transformation into an urbanized economy based on manufacturing sector and service sector. Despite these declines, agricultural production is still expanding, though with a reducing rate, and the majority of people are still employed in this sector.
Currently agricultural exports constitute about one-fifth of total export value. Main export products contain rice, rubber, cassava, canned and processed seafood, sugar, canned and processed fruit, chicken meat, frozen shrimp, fresh tropical fruits, seasoning, and other processed food and beverage. Thai government is attempting to enhance agricultural productivity and sustainability. Over the past ten years, the philosophy of sufficiency economy in Thailand which is called the new theory in agricultural sector. A practical way of living and engaging in agriculture that the H.M. the king has initiated to help the farmers, growers, and SMEs to improve their quality of life and wellbeing. it is divided into 3 stage; (1) production for self-sufficient, (2) cooperation or forming a group to support production, marketing, society and social welfare, (3) launching their
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 22 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค production activities into business. The advantage of the sufficiency economy are (1) use the land with high efficiency, (2) various production, (3) reduce risks, (4) reduce cost of production, (5) increase income, (6) balance natural environment, (7) more activities, (8) reduce migration, and (9) better life quality.
Agriculture production in Thailand can be classified into three segments.
Segment A: Crop production: major crops of Thailand encompass rice, maize, cassava, sugarcane, soybean, mung bean, groundnut, sorghum, cotton, pineapple, garlic, shallot, onion, potato, pepper, coffee, oil palm, para rubber, and other fruit crops such as rambutan, durian, guava, lime, tangerine, mango, longan, mangosteen, and lychee.
Segment B: Livestock production. The livestock and poultry are divided into two types of farms: commercial farms (large operators) and non-commercial farm (backyard farms). The type of livestock are cattle, buffalo, swine, duck, chicken, and dairy cow.
Segment C: Fisheries production. Major types of fisheries are jumbo tiger prawn, Penaeus Vanamei, walking catfish, striped snake head, Nile tilapia, and Thai red tilapia.
Outstanding challenges faced in agricultural production are highlighted as follows:
(1) Agricultural commodities price is still slump as well as the risen cost of production factors such as labor, fertilizer, animal feed, and logistics costs. In some years, the serious problem of slump price makes the farmers loss and affects the well-being of farmers. Thus, the farmers lack of money for investment and confidence to invest in new crops.
(2) Terms of trade are not the same standard. It creates the confusion for farmers and related people.
(3) The operations of central marketplace in the source of production are inefficient. The operations make farmers lack bargaining power and the products distribution during the peak of production season cannot be done from the source of
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 23 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค production, especially for fruits. It causes significant problems of price slump. Most central marketplace systems are lack of the management effective, lack of basic facilities and lack of necessary information that will make the market can conduct effectively.
(4) Productivity passes through middleman several steps that affect price and quality. The coordination and support system links trading between manufacturers of origin to the buyer at destination still less. It affects quality of product, total operation cost and logistics costs, and the difference of prices between farm prices and consumer price.
(5) Imports from foreign countries are increasing. A number of low quality products is imported and compete against Thai products, especially in fruit and vegetables.
While having encountered a number of challenges, unlike convention production, there is a growing activity of developing Thai organic agriculture dividing into two streams (a) rural development oriented and (b) business oriented organic program. In the first stream, key stakeholders are farmers and NGOs with limited support from local researchers. Their main goals are to support small scale farmers to adopt sustainable farming practices in order to improve their livelihood and agro ecological conditions in rural areas. Their conversion strategies emphasize on raising farmers’ awareness on the negative impacts of agro-chemical and the undue dependency on external markets and promoting indigenous knowledge of sustainable farming practices through seminar, research, study tours, and individual on-farm experience. The second stream is led by local entrepreneurs who have linkages to overseas market. With such linkages, they have noticed the emerging organic markets and have seen this as business opportunities. Overall, Thai organic agriculture has been growing at a steady rate fueled by the expansion of export opportunities, especially in the developed countries.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 24 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
5. Snapshot of Thailand’s Food Industry
Thailand’s food processing sector began to develop in the 1960s as Thai government encouraged technology transfer. Before then, Thais had preserved food primarily by drying, pickling, and sugar glazing. Importing technology from Japan and Taiwan to process sweetened condensed milk, canned fruits and vegetables, and vegetable oil, modernized the food industry, and exports of Thai processed foods increased significantly.
The industry grew rapidly in the 1980s with increased market demand and the importation of new and advanced technologies from the United States and Europe. During the following decade, exports of frozen and chilled commodities surged.
The 1990s through the present time have seen a greater emphasis on quality, hygiene, sanitation food safety, wholesomeness, lowered production costs, value-addition, and adherence to environmental regulations in Thailand, in response to international competition and demand.
Thai and international authorized food safety agencies, as well as third-party organizations certify standards applied to agriculture commodities and food for foreign consumption. Thai standards adhere to such international standards as Codex, OIE Standards, and the International Plant Protection Convention, and Hazard Analysis and Critical Control Point (HACCP). Quality assurance systems are also mandatory for products such as canned and some processed foods.
About 90 per cent of Thai food producers were SMEs, the industry has been developing by taking advantage of the country’s abundant labor force and raw materials. Currently, more than 10,000 food processing companies comprise the Thai food processing industry. Among the major Thai and multinational industry leaders in the country are Nestle, Saha Pathana Inter Holding Ltd, Patum Rice Mill & Granary, Royal Friesland Foods NV, Unilever Group, Thai Union, Dole Thailand, Charoen Pokphand Group, Betagro, Saha
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 25 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Farms, Thai Beverage PLC, Kellogg’s, Kraft, PepsiCo, Del Monte, Procter & Gamble, Ajinomoto, and Ef-Fem Food. Increasingly, Thailand is becoming one of the world’s most dynamic food centers due to its expertise in product development, food processing, and agriculture.
6. Configuration of GVC of Selected Products
This section illustrates specific GVC of selected Thai agricultural products by using empirical international and domestic trade on the upstream, middle stream, and downstream activities along the global value chain.
Case Study of Thai Rice
During the past centuries, rice market has steadily expanded, and rice has been consumed by over 3 billion people throughout the globe. Many countries have placed importance in rice variety development, increase of efficiency in rice cultivation and trade, R&D and rice management in a bid to promote diversity, food security, and to create new options to consumers.
Rice production in Thailand represents a significant portion of Thai economy and labour force. Thailand has a strong tradition of rice production. It has the fifth largest amount of land under rice cultivation in the world and is the world’s second largest exporter of rice.
Thailand has plans to further increase the land available for rice production, with a goal of adding 500,000 hectares to it already 9.2 million hectares of rice-growing areas. Thai Ministry of Agriculture expects rice production to yield around 25 million tons of paddy rice in the 2016-2017 crop-year, down from 27.06 million tons in 2015-2016. Jasmine rice (Hom Mali rice), a higher quality type of rice, is the rice strain most produced in Thailand. Jasmine has a significantly lower yield rate than other types of rice, but it normally fetches more than double the price of other strains on the global market.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 26 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Even though rice producing and exporting countries, including Thailand, have now been facing with market volatility and tough challenges stemmed from natural disasters and fiercer competition, Thailand still strives to produce and export good quality of rice to consumers all over the world. The major export markets include People’s Republic of China, US, EU, South Africa, and the Oceania countries.
Rice to Thailand, is not only an indispensable food and export product, but also a source for diversified culture and traditions. With its geographical advantage, the country can cultivate different varieties of rice in almost all areas, be it, the Central, Northeast, North, and the South. Rice export has fed over 4 million households of Thai farmers which all of them is small enterprise, as well as those in the labour sector, industries, logistics, and other businesses related to the supply chain of rice production, processing, and export. Rice production in Thailand can be classified into four ecosystems: irrigated, rainfed lowland, deepwater, and upland. Rainfed lowland is the most predominant, followed by irrigated, deepwater, and upland.
Thailand has established national rice strategy to strengthen and enhance production efficiency of agricultural and agro-based industries to add more value and meet good agricultural practice (GAP) and safety requirement. The value chain of Thai rice can be viewed in the below figure.
Figure 8-1 Value Chain of Rice
The rice value chain begins with stakeholders in growing process and manufacturing process attempting to understand consumer requirement and dynamics of consumption
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 27 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค including consumption trend on food safety, food value, healthiness, nutrition, quality, organic, environmental friendly products, packaging, and by products of rice.
Within the framework of growing process, the government establishes work plan in research and development and basic infrastructure by (a) researching rice local and international demand for rice, especially Jasmine rice and other value added rice product, (b) developing rice prototype and site specific technology, (c) developing production input to ensure food safety, (d) studying and developing rice production standard to meet safety and authentic requirement, (e ) developing and selecting appropriate technologies for rice production. Farmer, cooperatives and rice community cluster which are all SME will benefit from supportive infrastructure and research and development platform.
The value chain then connects the second phase of growing process framework involving farmer and institutional development encompassing work programs including (a) expanding the promotion activities of high quality and more added value rice, (b) promoting farmer and people working in rice growing to realize contemporary production issues, (c) encouraging cooperatives, rice community, and farmer to apply sufficiency economy in production, (d) supporting knowledge transfer of rice growing, and (e) establishing networks between groups of farmer and financial institution.
Within manufacturing process, cost reduction and productivity management is a key to success, Thai government sets up action plan by (a) using appropriate post-harvest technologies to preserve rice quality and safety, (b) certifying and accrediting rice standard namely GAP, GMP and HACCP, luxury quality, premium quality, standard quality, and (c) applying crop zoning techniques.
Regarding processing and product value adding, the relevant work program covers (a) promoting community and rice mill enterprise to meet manufacturing standard, (b) using appropriate packaging technologies to maintain and extend rice quality, (c) promoting
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 28 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค individual rice community to product its product reflecting its identity and uniqueness (One Tambon One Product - OTOP), many SMEs add local wisdom and materials to present uniqueness of the products and a wide range of OTOP made from rice including Thai rice cracker, rice berry, rice wine, rice soap, organic Thai red jasmine rice, and (d) promoting the creation of branding and quality mark of qualified rice products.
Within trade and marketing process, logistics and handling management work plans incorporating (a) promoting the usage of qualified consolidation, warehouse and distribution center in provincial and regional scale of rice products, and (b) the establishment of transportation system for connecting stakeholders from upstream, middle stream, and downstream.
Pertaining to market development, the government has work plans to (a) establish rice trade commodity market and forward market for qualified rice product, (b) create appropriate mechanism of price determination, (c) create public relations and appropriate sale promotion consist with production and harvesting plan, (d) creating business networks between producers and consumers, and (e) promote rice consumption value.
Even though, the country is still one of the world’s largest rice producers and the largest rice exporters, Thailand’s rice sector face following constraints.
(1) The major production constraints are rainfall variability, drought, submergence, and inherently low soil fertility. These constraints affect the different rice ecosystems to varying degrees and imply that the production systems are very vulnerable to climate change, which will exacerbate extreme climate events. Drought at the early vegetative phase and long-term deep flooding from the late vegetative phase to early ripening phase and weed competition are the most important production constraints in the deepwater ecosystem. Drought and poor soil fertility affect upland systems the most.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 29 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
(2) In irrigated ecosystems, production constraints are generally not related to climatic factors but to biotic factors such as pests and diseases. Water scarcity in the dry season is another important constraint in irrigated environments.
(3) Stagnating yield is both a short-term and long-term problem. Mean rice yields nationally for the last 10 years were almost constant, ranging from 2.8 to 2.9 t/ha.
(4) Labour shortages during peak periods because of better employment opportunities in urban areas are a further constraint, especially in the central region, where industrial employment is higher. However, this constraint is partly being solved through mechanization.
(5) International trade barriers. Several import countries such as Japan, Korea, Taiwan, and China have imposed tariff rate quotas (TRQ) which technically preventing SMEs engagement in international exporter. Whilst Thailand (and other countries in APEC economies like Indonesia, and Vietnam) still require international rice export transactions being designated to selected private traders on specific price and quantities. These conditions prevent SME to participate in trade and marketing process in voluminous scale of supply chain.
In addition to the established national rice strategy, Thai government realized the integration of regional economy and global value chain by setting out goal for Thailand to become leader of world’s rice market through development of efficient market mechanism and cooperation with other ASEAN member countries to ensure balance between production and trade sectors. Mobilization of such a strategy requires a collaboration between public, large enterprises, SME, cooperative, people’s and farmer’s sector. The business enterprise will be a main driver in trading with support and facilitation from public sector to ensure that rice trade systems operated in line with market mechanism. Cooperation and trade between private sector and large scaled customers, as well opening new markets, and establishing cooperation with rice
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 30 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค production countries in ASEAN will also be promoted. Adding value to rice and acting as regional centre for rice value adding management and product distribution to the global market will be challenging target for Thailand to achieve.
Regarding the global value chain in APEC, Thai rice is major crop locally grown in Thailand while relying on fertilizer supplied from overseas, especially from North America. Almost half of total export Thai rice sold to APEC member countries with 17 percent exported to East Asia, 10 percent exported to Indonesia, 7 percent exported to the Philippines, and 9 percent to North America.
Figure 8-2 GVC of Thai Rice
Due to current regulatory constraints allowing only selected large business enterprises to engage in export quota supply to overseas markets in voluminous scale while preventing SMEs to engage this specific supply chain. The participation of SMEs in Thai rice in GVC
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 31 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค should be encouraged to more lucrative and less price competition market such as organic rice and by products of rice such as Thai rice cracker, rice berry, rice wine, rice soap, and organic Thai red jasmine rice. About 90 percent of production output of organic rice is distributed to overseas with better price than inorganic rice. The participation of SME in organic rice should be developed by (1) strengthening the cooperation between SMEs and niche food store and supermarket, (2) the product quality and certification of accredited organization involving in organic production, and (3) cost management due to low product output
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 32 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Case Study of Thai Cassava
In Thailand, cassava is considered one of the most important economic crops with annual production around 25 million tons. The crop has excellent drought tolerance and can be planted with low input requirements in almost all soil types where other crops cannot be cultivated economically. The production of cassava has steadily increased, mainly through an increase in root productivity.
Cassava with edible roots high in starch content with around 80 percent of dry weight is recognized as important subsistence food crop for many countries. In some cassava growing countries such as Nigeria, Ghana, and Brazil, the starch reserved roots are used as the main staple food in the form of fresh roots or as dried cassava flour. Unlike those countries, Thailand grows cassava not only as subsistence crop by small farmers, but also as an agro-industrial crop with a well-developed industry and market. The start rich roots of cassava have been used as a raw material for producing a lot of high value added products including starch, modified starch, tapioca pearls, sweeteners, dry chips, pellets, organic acid, sugar alcohol, alcohols, monosodium glutamate (MSG), sago and derivatives for food and non-food applications. These primary and value added products are supplied for both local and export markets.
Although Thai cassava industry has long been developed and has become one of the most competent agri-business and agro industries compared to other crops, the industry is still confronted with many rapid and dynamic changes, e.g. climate change, depletion of natural resource reserves, national and international trade policy and regulations, modernization in industry, consumer behavior and needs. These constraints are an important driving force that guides the development of the industry. More recently, since Thailand is a net energy importer, cassava has been developed as an energy crop, producing bioethanol as an alternative fuel. To sustain both food and fuel demand, an increase of root productivity by applying good agricultural practices (GAP) and varietal improvement has been intensively conducted in Thailand.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 33 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Thailand’s cassava is mostly grown in the northeast region and the eastern region of Thailand. Cassava roots are utilized for making dry chips, pellets, native starch, modified starch, MSG, glucose, fructose, sorbitol, sago, citric acid, while starch is used in the paper, textile, and plywood industries. Of the products made from cassava, cassava chips industry which is in cassava processing stage is dominated by SMEs. Cassava chip factors are small scale enterprises and most have no formal company registration. The manufacture of cassava chips is recognized as an agricultural activity; factors belong to farmers or small businessmen and are located in close proximity to growing area. The chipping factors are installed with simple equipment, consisting mainly of a chopper. Roots are loaded into the hopper of the chopping machine by tractor, after chopping into small piece; the chips are sun dried on a cement floor. The chips are spread to a specific density, ensuring consistent final moisture content. During drying, which typically requires 2 to 3 days, a vehicle with special tool for turning over the chips is used to ensure uniform drying. Economic loss occurs as a result of weight loss of the chips, caused by wind that blows dry particulate matter.
Regarding the marketing of cassava chips, SME will sell chips to pelleting manufacturers who either directly export the chips/pellets or sell to traders. In most cases, the small chipping factories sell their products to large factories that in turn sell a consolidated consignment to pellet manufactures. Time from purchase of chips to their sale is rapid. Factories in Thailand have limited silo facilities for storage, and all transactions are direct, middlemen or brokers are not involved. Nakhorn Ratchasima province in the Northeastern region has the highest chip and pellet production in Thailand, and the pellet price in this province is the standard trading index to set the Bangkok market pellet price. China, Korea, and Japan still import cassava chips from Thailand, but for purposes other than feed such as ethanol fermentation.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 34 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-3 Value Chain of Modified Starch
Of the products made from cassava, cassava starch and pellets are the only ones exported. Export companies mainly those who are large business enterprises will be allocated export quotas of pellets to the overseas markets. The participation of SMEs in GVC of Thai cassava and starch remains limited to only growing process which supply cassava chip under contract to large business enterprises who are in manufacturing and trade process framework due to inability to gain trade license and export quotas. The GVC of Thai cassava and starch production and consumption is concentrated only in APEC economy with 75 percent sold to the East Asia, especially China, Japan, and Korea, 9 percent sold to Indonesia, and 2 percent sold to North America.
GVC of Thai Cassava
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 35 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-4 GVC of Cassava
Case Study of Thai Tropical Fresh Fruit
Thailand is one of the most abundant sources of tropical fruits in the world. It has high diversification in tropical fruit and Thai fruits are popular among consumer throughout the world. The major tropical economic fresh fruits that contribute significant export earnings include longan, rambutan, lychee, mango, mangosteen, tangerine, durian, pineapple, and pomelo.
Longan is a well-known fruit crop that has been grown in Thailand over hundred years with the production area concentrated in the Norther provinces especially Chiang Mai and Lamphun. About 80 percent of fruit production is consumed domestically as fresh longan fruits and the rest are exported as fresh and canned longan. The exporting markets of Thai longan are China, ASEAN, USA, and Japan.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 36 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Rambutan is also a famous fruit crop that has been introduced into Thailand more than hundred years. The cultivated areas are in the Southern and the Eastern provinces. The major producing provinces are Chanthaburi, Rayong, Trat, Prachin Buri, Surat Thani, Chumphon, and Nakhon Si Thammarat. Most of rambutan produced is consumed locally and small quantity is for export as fresh and canned fruits to Hong Kong, Singapore, and USA.
Lychee is another fruit crop that has been introduced and grown in Thailand in the same period as longan. The major producing areas of lychee are in the Northern provinces such as Chiang Mai, Chiang Rai, Nan, Phayao. Most of lychee produced is consumed locally and a small quantity is exported mainly as fresh and canned fruits to Hong Kong, ASEAN and USA.
Mango is one the most outstanding economic fruit crops in Thailand. It is grown in all regions. At present, mango production has greatly been developed through improved varieties and production techniques to meet consumer demands of high quality fruits. Majority of the fruit produced is consumed domestically, however, overseas demand for Thai mango has steadily increased both in the forms of fresh and canned fruits. The main export markets of fresh mango are ASEAN, Hong Kong, Japan, and China.
Mangosteen is known as the queen of tropical fruits. The production is limited to the Southern and the Eastern provinces which is due to the suitability of climate conditions. The leading provinces in mangosteen production are Nakhon Si Thammarat, Chumpon, Surat thani in the South and Chantaburi, Rayong, Trat in the East. At present, the production of mangosteen in mainly for domestic consumption but increase in export share. Mangosteen is exported as fresh and frozen fruits to China, Hong Kong and Japan.
Durian has its reputation as king of fruits grown in Thailand for over a century ago. Major durian producing areas concentrate in the Eastern provinces. Durian is exported as fresh and frozen fruits mainly to China, ASEAN, and USA.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 37 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
In overall, about 80 percent of country’s production out is sold in domestic market and the other 20 percent is delivered to overseas market by sea, air, and land transportation. Marketing system of fresh fruit is less complex than other economic crops such as rice, cassava, and sugarcane. It is subjected to free trade system that demand and supply drive the flow of fruit from production origin to consumer. Fruit flows from orchards to collectors (middlemen) that further supply fruit to fruit collecting centers near the production sites, wholesale markets, supermarkets, processing factories or export companies. After that, fruit are further supplied to different forms of retail markets including supermarket chains, local fresh markets, fruit stalls, minimarts, and so on. For most fruit crops, traders visit orchard before fruit reach maturity to check for both quantity and quality. The price is negotiated based on market information of previous day, fruit weight, fruit number and quality under the condition that all fruit in the orchard will be bought. Traders make appointment to harvest the fruit and provide all harvesting services by their own crew as well as transportation.
The GVC of tropical fresh fruit such as rambutan, durian, tangerine, coconut, mango, longan, and mangosteen is clustered only in APEC economy with 67 percent sold to the East Asia, especially China, 19 percent sold to Vietnam, and 7 percent sold to Indonesia.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 38 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-5 GVC of Thai Capital Fresh Fruits
The international value chain of Thai tropical fresh fruits has expanded rapidly partly due to the introduction of free trade agreements between Thailand with dialogue partners such as ASEAN, China, Japan, and Korea and the advancement in technology on cool chain logistics have created market potential for Thai fruits. Most of international value chain of exporting Thai fresh fruit is dominated by SME, mainly within Chinese linked community and Joint Venture between Thai and Chinese entrepreneurs as more than two third of export volume is distributed to China and Chinese and Asian community in other overseas markets. At present, there is an increase in number of fruit traders from China and Taiwan that set up fruit buying point in the production sites to buy and export fruit such as durian, longan, and mangosteen on their own independent of local traders. Chinese fruit traders will negotiate and deal with Thai fruit farmers directly, handling their own exports rather than going through Thai brokers and
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 39 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค middlemen as done in usual traditional business practices, slowly gaining control over Thai fruit industry. In 2015, Thailand exported 12.6 billion baht worth of fruit to China after only 4.4 billion in 2007. Durian is the favorite Thai imported in China, making 41 percent of fruit exported to China, followed by longan and mangosteen. The entry of Chinese traders into Thai fruit markets creates more competition among middlemen or brokers. Fruit growers benefit from this situation as they can access to better market but local fruit traders face a big challenge to maintain their competitiveness in the business. Competition is very high particularly in the early fruit season and causes problems such as selling and buying immature fruit, durian, in particular. The government tries to monitor the situation and take action to ensure fair trading and the reputation on fruit quality.
As tropical fresh fruit are perishable with short shelf life, a significant loss can occur along the value chain due to improper management. To compensate for this loss, the price offered to fruit growers is always kept as low as possible, particularly during the peak harvest season when there is a glut of fruit. Inefficient marketing system would lead to increased cost of transaction that affects both the producer and the consumer prices. A small-scale fruit orchard with small production capacity will face difficulty to survive alone under this typical marketing system unless they form a group to produce good quality fruit at the volume corresponding to the demand of middlemen or an export company under contract farming system. A contract farming system is currently active for Thai fruit such as mango, mangosteen and banana for export markets and fruit growers generally receive higher price than the average market price. However, at present, very few fruit grower groups and fruit grower cooperatives are successful in Thailand.
In addition to a local fruit market closed to the production sites and a typical wholesale markets in the Bangkok metropolitan, a ‘central market for fruit and vegetables’ as a one
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 40 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค stop service wholesale and retail place is scattering around in each region of the country. The size of the market is large with well access to transportation, cold room facilities for storage, grading and packaging, a crew to assist on moving fruit around, laboratory to check for chemical residue and updated on-line information on price of each fruit and vegetable. Traders can rent a permanent space in the central market for buying and selling fresh fruit. A company dealing with import and export of fruit is often attached to this central market. Price negotiation in a central market between sellers and buyers is operated freely provided price information is updated. Open spaces in a central market are also provided for growers to sell their fruit directly to customers to get fair price and avoid middlemen. At present, there are 14 central markets for fruit and vegetables in Thailand which are promoted and overseen by the Department of Internal Trade, Ministry of Commerce and local administration. The wholesale section of this type of market is very active for trading of imported fruit and vegetables and local produced vegetables. It remains to be seen whether the proportion of locally produced fruit will increasingly flow in to this market channel.
Market intervention of Thai fruit sector by the government and local administration occurs as necessary during the peak harvesting season when there is over supply of fresh fruit and fruit prices go down to unacceptable level. Budget is provided to buy large quantity of fruit out of the markets to reduce the supply and automatically increase the price. These fruit are stored in cold storage facilities, processed to different products, or shipped away from the production origins to markets in large cities and Bangkok metropolitan for further sale. This practice is costly and not sustainable. Improvement of production plan and management to balance the demand and supply, marketing, processing and promotion of fruit consumption is needed.
In summary, the challenges of SME in Thai fruit industry can be categorized as (a) growers are not well organized, (b) SMEs are required to improve production plan and
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 41 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค management to balance demand and supply, marketing, processing and promotion of fruit consumption, (c) having high cost of production as compared to market price, (d) the market have faced labor shortage throughout the whole supply chain, and (e) the requirement of government to maintain fair fruit trading as price determination largely controlled by foreign trader who trying to force prices down.
Case Study of Thai Processed Fruits
Thailand processed fruit products such as canned pineapple, pineapple juice, canned mixed fruit, canned mango, canned longan, juice, fruit snack mostly manufactured by SMEs, employed production technology from overseas, and supplied through multinational corporation supply chain.
Thailand is the world’s leading producer of processed fruits, especially processed and canned pineapple in which Thailand has over than 40 percent of the global export of canned pineapple. In contrast to the Philippines, where production of pineapple and tropical fruits used as raw material to canned fruit is dominated by multinational corporations such as Del Monte and Dole, 95 percent of Thai pineapple and tropical fruits used as raw materials to canned fruit products is grown on small privately owned farm ranging from 1 to 5 hectares in size. These small growers then sell their harvest to a processing plant. The big business heavily relies on this subcontracted labor to supply the raw tropical fruit to be processed and can generally fix whatever price they want as farmers have few options to whom to sell their harvest.
More than 60 percent of total export of Thailand’s processed fruit is sold to APEC member countries with 40 percent exported to North America, 18 percent exported to East Asia, especially China and Japan, 4 percent exported to Oceania, and 8 percent to Indochina region.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 42 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-6 GVC of Thai Processed Fruits
Regarding the GVC of processed fruits, large enterprise and multinational corporations are the one who control the direction of value chain. SME engagement only in growing process based on contract farming supply to manufacturing and trade process. Multinational corporations manage processing and marketing but contract for supply of farm products with peasant farmers. The firms provide technical guidance, credit, and other services to peasants in return for their pledged production to the firm. Dolethai for instance, dole’s operation in Thailand that processes the bulk of the company’s worldwide processed pineapple products, sources pineapples from out growers but has its own plantations as well. SMEs working in the global value chain guided by multinational corporations are required to maintain good operations in some established criteria such as trade union rights, compliance with living wage and minimum wage standards, child labor, certain amount of pesticide use, and transparency.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 43 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Case Study of Thai Frozen Shrimp
Shrimp farming has been practiced in Thailand for over than 30 years, but developed and expanded rapidly during the mid 1980s, supported by technical breakthrough in shrimp feed development and successful production of larvae in 1986. Three distinct types of shrimp farming can be distinguished in Thailand, namely extensive farming, semi- intensive farming and intensive farming. Extensive faming is original shrimp culture system that cultures shrimp in large areas using traditional methods of tidal exchange of water and natural seed supply. This extensive system yields mainly banana shrimp but production is unreliable. Semi-intensive shrimp farming are usually conducted in 3 to 5 hectare in size with a reservoir, from which the water is pumped into main rearing ponds. Artificial feed is supplied to increase production. However, the extensive and semi- intensive systems are currently not very practical and very few are operated today in Thailand. The intensive farming in Thailand was introduced in developing in 1986 by learning experience from Taiwanese style intensive farming system. The ponds are stocked at densities of 50 to 100 larvae per square meters and fed with high quality artificial feed while this method require injecting more air to increase oxygen level. Production can be as high as 15 tons per hectare per crop.
The challenges of shrimp production in Thailand incorporate issues of disease management, management of raw materials, contract farming between small farmers and large food processers and frozen house, the maintenance of GAP. About fifteen of shrimp production output is distributed in local market through traditional trade and modern trade while eighty five percent is exported to foreign markets.
Thailand frozen shrimp rely on cooperation between SMEs as second tier suppliers supplied to large enterprise to export, employed production technology from overseas, and supplied through multinational corporation supply chain. More than 90 percent of
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 44 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค total export of Thailand’s frozen shrimp is sold to APEC member countries with 41 percent exported to North America, 37 percent exported to East Asia, especially Japan and China, 4 percent exported to Oceania, and 2 percent to ASEAN.
Figure 8-7 GVC of Thai Frozen Shrimp
The participation of SMEs in frozen shrimp in GVC should be developed by (1) strengthening the cooperation between farm and raw materials producer from other countries such as USA, and South Asia, (2) the enhancement of food safety, (3) the development of value added activities to meet more sophisticated of consumer demand such as ready to eat food, food with different seasoning, electronic commerce, more variety of food package and sizes. This requires greater cooperation in entire value chain.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 45 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Case Study of Thai Processed Seafood
Thailand is one of the world’s leading seafood exporters. Thailand has established itself as a key processing country for seafood products made from both domestically sourced and imported raw materials, and for compliance with the strict HACCP standards required for international trade. Thailand’s long record for outstanding food safety has given it comparative advantage over many other low and middle income seafood exporting countries.
Thailand processed seafood such as canned tuna heavily rely on imported raw materials and require cooperation between large enterprises and SMEs as supporting business. Thailand’s canned tuna is export oriented with about 95 percent of total production destined for foreign market. The distribution of processed seafood is typically conducted through multinational corporation supply chain. About half of total processed seafood is sold to APEC member countries with 30 percent exported to North America, 18 percent exported to East Asia, especially Japan and China, 7 percent exported to Oceania, and 8 percent to ASEAN.
One of the most important processed seafood of Thailand is canned tuna. Commodity chain for canned tuna is global, with fishing grounds in all the oceans, processing centers on every continent and end markets equally widespread. Catching of tuna is largely conducted in exclusive economic zone and high seas around the world. Fishing vessels transships caught tuna in port or at sea to cold storage and processor. The full and split processing is done in Thailand, a developing country, and then export to buyers, agents brokers, distributors, importers in the overseas countries mainly APEC economies, European countries and African continent. Thailand is the world center for canning tuna, but there are also many other plants around the world, in island countries in the Pacific
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 46 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค and Indian Oceans, in Latin America and in Africa. The most lucrative consumption markets are in North America, Japan, and EU.
Figure 8-8 GVC of Thai Processed Seafood
Despite the competitive disadvantage of having to factor in imported raw tuna, mainly from China, Indonesia, Japan, and Taiwan. Thailand has developed a competitive advantage in related and supporting industries such as canning, sea transport, and cold storage facilities, benefiting from strong business ties and investment flows from developed markets. The industry is heavily dependent on low labor cost and employs immigrant workers who represent over than 70 percent of total workers in processing sector. The Thai canned tuna industry is highly consolidated, consisting of only 18 players, all of whom are member of Thai Tuna Industry Association. The supply of raw
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 47 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค tuna is itself controlled by only three integrated traders from Taiwan, Japan, and USA. This highly integrated system allows for strong controls throughout the supply chain. Indeed, Thai canned tuna industry is subject to strong monitoring mechanisms and decent labor regulations, as pressure from overseas buyers and compelled Thai canned tuna processors to achieve and maintain high product quality and proper labor standards in their operation.
The participation of SMEs in processed seafood, especially canned tuna is the case study of how SME can efficiency work with large enterprises and multinational corporations. Major concerning issues arising from (a) the international trade and security barriers require Thai SME stakeholders in seafood value chain such as fishing vessels, seafood factories, canning industries, cold storage facilities, seafood logistics companies to pay more attention on labor practices such as child labor and migrant workers in the fishing industry both on shore and on board vessels flying Thai flags and off-loading catch in Thai ports, (b) food safety regulations demands stakeholders to strictly follow sanitary and hygiene requirements such as HACCP and GMP, and (c) continuous improvement is required to SMEs working with multinational corporations to upgrade processing of higher value products and cold storage, packing, sourcing, and food value.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 48 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Case Study of Thai Frozen Chicken
The production of Thai chicken is made from independent farmers which represent less than 20 percent of production and contract farmers who are SMEs, mainly located in the Northeast and Central region of Thailand which represents about 80 percent. The production contract is done with large and multinational corporations who supply raw materials and animal feed, production technology while guarantee buy back price for required quantity, size, and quality.
The challenges of chicken production in Thailand incorporate issues of quality control, food safety, the management of raw materials, contract farming between small farmers and large food processers and frozen house, and the maintenance of GAP. About seventy percent of production output is sold in domestic market though traditional market, modern market, and large restaurant chain and thirty percent of out is exported.
Thailand frozen chicken required strong cooperation between SMEs and large enterprise under contract farming. The distribution of frozen chicken is typically conducted through multinational corporation supply chain. Over than 60 percent of all export frozen chicken are sold to APEC member countries with 55 percent exported to East Asia, especially Japan and China, 7 percent to ASEAN, and 2 percent to North America.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 49 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-9 GVC of Thai Frozen Chicken
The participation of SMEs in frozen chicken in GVC should be developed by (1) strengthening the cooperation between SMEs and large corporation through contract farming and (2) the enhancement of food safety.
Case Study of Thai Sugar
Thailand is ranked the second largest sugar exporters in the world and the fifth largest sugar producer in the world. The sugarcane industry in Thailand is highly regulated by Cane and Sugar Act which assign the government acting as the mediator for cane grower, sugar manufacturer, sugar exporters, and sugar users. The sugarcane price is determined by the government on an annual basis. This price is used by millers as the basis from which to calculate the initial price paid to farmers. The government has long introduced two-price policy that fixed the domestic price above the world price has facilitated the
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 50 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค growth of Thai sugar industry to become one of the top exporters. However, it fails to maintain adequate domestic supply of sugar whenever the world price is higher than the domestic one.
In terms of trade liberalization in agriculture, even Thailand has maintained two-price policy which could be considered a certain kind of subsidy scheme, the rate of subsidy is relatively low compared to agricultural subsidies received by farmers in Europe, USA, and Japan. Therefore, if all export subsidies and trade barrier measures are removed, Thai sugar industry will certainly benefit from trade liberalization.
Regarding the work along the value chain, efficiency of growing and processing stage is still a problem of industry, although the nature of the problem faced is different for farmers and millers. For the farmers, the problem manifest is lower yield and lower sucrose content of the cane than in other competing countries. More important is the fluctuation in annual cane output, mainly because most cane areas are rainfed. All these factors collectively affect income stability of the growers as well as the efficiency in utilizing mill capacity. As for sugar mills, production efficiency should not be a serious problem since most mills are relatively new compared to those in competing countries. The problem is the extensive capacity expansion that has brought factories to excessive capacity and indebtedness. This is particularly the case of new mills that were equipped with state of the art technology. However, after internalizing the interest cost, the average cost of producing sugar from these new mills is higher than that from older and obsolete ones.
In terms of SME involvement in GVC of sugar, Thai sugar almost produced from sugarcane domestically grown by farmers and SMEs and manufactured and distributed by large enterprise. The export market of Thai sugar is relatively diversified compared to other agro based products with more than half of export volume clustered in APEC region with 28 percent sold to East Asia, especially China and Japan. 11 percent to the Philippines and 28 percent sold to Oceania and Indonesia.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 51 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-10 GVC of Thai Sugar
The participation of SMEs in Thai sugar industry is the case study of how SME can efficiency work with large enterprises who win license to export in quota system. To increase SME involvement in GVC, recognizing the SME can participate only growing process, the improvement in the following issues must be implemented (a) production efficiency by defining role of each stakeholders on research, development, and extension including cane breeding, farm mechanization, sugar production, disease prevention and control, cultural practices and field extension, and (b) SMEs who are in sugar cane plantations and supporting industry build contract with large scale manufacturer and exporters. The quota head manages the quota contract for sugar mill factories and later to farmers. The quota head commonly has farms and own machinery as well maintain
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 52 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค contract with reliable growers and suppliers which the quota head may supply fertilizer, herbicide, and insecticide.
Case Study of Thai Coconut Oil Product
Growing of coconut has played its importance for livelihood of producers in many Asia Pacific countries such as Indonesia, Philippines, Thailand, Vietnam, Papau New Guinea, Fiji, and South Pacific. Coconut can be processed in different forms such as coconut oil, food and drink, weaving, container, fuel, material for constructions, handicraft, and other uses. Coconut harvesting and primary processing is dominated by smallholders, as large coconut estates turn to more profitable crops. In many countries, coconut producers have traditionally gained greatest economic benefit of raw coconut by drying coconut into copra for further processing into copra oil. Comparing with other types of coconut derivatives, the world copra trade has matured as canola, palm, soybean and sunflower oils have overtaken coconut oil as the world’s leading edible oils. Coconut oil is traded as commodities with world prices driven by large Asia coconut processors. The declination of coconut oil growth has shifted the interest of stakeholders to market other value added coconut products (in food, beverage, pharmaceutical, spa industries, and bio fuel).
The below figure presents value chain configuration of coconut industry showing the magnitude and potential for commercial coconut processing and value adding in coconut industry. The challenge is to explore and produce more value added coconut products rather than just copra. In APEC economy, the Philippines is the biggest exporter of coconut products, mainly crude coconut oil and crude coconut oil-based products and desiccated coconut, coconut cream and milk and coconut water with fully support by government agencies, academia and trade associations such as Philippine Coconut
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 53 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Authority, Coconut Council, Philippines Coconut Research Institute, and National Coconut Corporation.
Figure 8-11 Value Chain of Coconut Industry
Source: APCC and PCA
Coconut production in Thailand in 2015 was about 845 million nuts or 220 metric tons copra equivalent. The area planted to coconuts was estimated at 213,000 hectares. Coconuts are predominately planted in the Southern Region of Thailand, mainly in the provinces of Prachub Kirikhan, Chumphon, Surat Thani, and Nakorn Sri Thammarat.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 54 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Constraints related to coconut production and productivity include: senility of palms, pest and disease damage (mainly by coconut hispine beetle-brontispa, coconut black- headed caterpillar, oryctes rhinoceros, and Asiatic palm weevil), and competition with more economically profitable crops like oil palm, rubber, coffee, and durian. Research and development programs in coconut industry include improvement of coconut varieties, production of high yielding hybrids and aromatic coconut seedlings, production and promotion of edible and non-edible high value products from coconut like Virgin Coconut oil, young tender coconuts as fresh fruits or processed and packaged coconut water, coconut milk, coir fiber products, coconut sap sugar, coconut sap cider vinegar, coconut shell charcoal and others, transfer of new technologies in collaboration with Department of Extension through GAP system in order to improve yields and promote quality products to meet SPS standards and regulations of importing countries.
The challenges of managing coconut value chain in Thailand include (a) farmer lack technical training in coconut care and primary processing to provide high quality products to local processor, (b) cooperation between local processors in collecting nuts and processing primary products need more time to consolidate. Many private processors and collection centers compete to buy coconut, (c) farmer lack skills to export and communicate with foreign buyers.
The government of Thailand through Ministry of Agriculture and Cooperatives has drafted a coconut strategic plan for 2013 to 2016. The production policy is to increase coconut production by replanting using hybrids and good coconut varieties to improve the quality of coconut, increase yield and income of coconut farms. The production policy also stipulates the need to improve efficiency in the prevention and integrated management of coconut pests, and strengthening the capacity of coconut farmers groups, organizations or cooperatives. The production strategic plan to improve production efficiency is to adopt production system management by zoning and using farmer’s
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 55 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค registration database, improve production revenue, improve product quality and safety, and develop integrated pest management (IPM) system of major coconut pests.
The marketing policy shall involve the production and promotion of value-added products from coconut. The strategic plan involves a campaign for value-addition and consumption/utilization of coconut products and developing the capacity for coconut industry’s competitive advantage.
The production of coconut oil of Thailand is about 20 percent of the country’s coconut products with 65,000 metric ton per year. More than 90 percent of production output is used for domestic household consumption and the rest are for various uses in the other food processing industry.
Thai coconut oil products are purely conducted by SME throughput the whole value chain. In order to manufacture coconut oil, Thailand uses both local materials and raw coconut from ASEAN countries, especially Philippines (38 percent of total import), Vietnam (33 percent of total import), and Indonesia (29 percent of total import) which have plenty of resources. The local SMEs then added production and marketing value for export. The whole GVC of coconut oil product is clustered only in APEC region with 75 percent of export volume sold to East Asia such as Japan, Korea, and Hong Kong.
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 56 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Figure 8-12 GVC of Thai Coconut Oil Product
Case Study of Thai Coconut Drink
Amongst other coconut value adding products, the production, consumption, and export of coconut drink is promoted. The coconut drink market has expanded rapidly. This can be attributed to growing global health consciousness that sees coconut water as a healthy and rehydrating drink. Prior to 2010, Thailand has 15 factories producing coconut drink. All of these are regarded as medium enterprises with total production capacity of 150.000 metric ton per year, the expansion of Thai coconut drink producers has emerged since 2011 mainly from small enterprises supplied coconut products such as coconut shell,
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 57 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค coconut milk, etc. to large enterprises in local and overseas market “original equipment manufacturer - OEM” growing up to original brand development (OBD). The new small enterprises realize growing opportunities of coconut drink and coconut water while having linkages with contracted coconut growers and agricultural cooperatives. The advantages of new penetration of SME producing coconut drink arising from (a) focusing of genuine coconut water “young nam hom coconut” or “aromatic coconut” grown in Thailand with the uniqueness due to particular fragrance, freshness, and sweetness. (b) having strong and reliable connection with coconut growers, (c) having wide coverage of coconut products such as coconut oil, coconut milk, coconut pudding, and coconut ice cream, which can use all materials from coconut in making products, (d) developing qualified safety standard, packaging technologies, organic, no added sugar, to tailor to customer demand from developed countries in Asia and North America, (e) develop linkages with niche distribution channel mainly supermarket selling organic food and drink and engaged in international trade exhibition focusing on healthy and organic food and beverage.
Thai coconut drink value chain is largely conducted by SME. In order to manufacture coconut drink, Thailand use both local materials and raw coconut from ASEAN countries, especially Philippines, Vietnam, and Indonesia. The local SMEs then added production and marketing value for export. The whole GVC of coconut juice is concentrated only in APEC region with 30 percent of export volume sold to East ASEAN and Oceania, 25 percent sold to East Asia, and 11 percent to USA. The current challenges of managing global value chain of coconut drink include (a) insufficiency of aromatic coconut to serve domestic and international market demand, (b) compliance to national production standard set out by government regulations to ensure the accumulation of aromatic scent, (c) coconut growers lack of technical skill in checking authentication of coconut and lack of ability to control the conversion of coconut into non-aromatic coconut, (d) coconut drink producers require strict inspection of raw materials to ensure to high quality and rightness of raw materials and need to manage contract farming with
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 58 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค qualified growers, (e) some import countries require prior notice measure as a part of food safety regulations by requiring coconut drink to be manufactured under HACCP and set up rigid food chemical in terms of level of acids, nitrate, and salty of coconut drink product.
GVC of Thai Coconut Drink
Figure 8-13 GVC of Thai Coconut Drink
7. Recommendations to Promote the Integration of SMEs into Agribusiness Global Value Chain in APEC Region
The establishment and expansion of global value chain can bring both opportunities and pressures to SMEs. The reorganization of production at the international level, through increased outsourcing and the development of GVC, is having significant effects on SME suppliers. New niches for supply of products and services continuously emerge from
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 59 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค fragmentation of production, where small firms can quickly position themselves, exploiting their flexibility and ability to move fast.
Key benefits of SMEs include the following
Participation in global value chains enhances SME internationalization and growth. It provides SME suppliers access to global markets at lower costs than those faced by individual small-scale producers, due to the intermediation function assured by the contractor. Firms that have successfully integrated into one or more value chains have been able to expand their business, and gain stability.
Small firms that focus on multipurpose technologies have secured their position in the market by becoming specialized suppliers serving different global value chains, such as organic agricultural products, products in scarcity, niche product, product innovation, etc. Specialized and niche market SMEs are become conscious of their competitive strengths.
Co-operation with partners upstream and downstream improves the small firm’s efficiency. This is due to the substantial benefits in terms of information flow, technology transfer and learning opportunities. SMEs connecting with partners in global value chains can generate knowledge spillovers and stimulates human and technological capital upgrading. This cooperation can be conducted between SME farmer and grower with supplier from other countries, the alignment of food safety and accreditation, the close working to meet consumer demand which require greater supply chain relationship between producer, marketer and distributor.
Key challenges of SMEs include the following
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 60 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Awareness and understanding of structure and dynamics of GVC by SMEs are generally insufficient. This is likely related to the complexity of configuration of value chain, related regulation, and dynamic market and price information
Major of SME across different countries are not able to identify competitive strengths within value chain
SMEs are mainly concerned with both inadequate availability of managerial and financial resources, skill, and inability to upgrade and generate innovation.
Compliance with strict product quality standard required to participation in GVC, especially in selected agricultural products without mutually agreed product and quality standard.
As the GVC presents both opportunities and challenges for SMEs, the policy makers should investigate approach to support more participation of APEC SMEs participation in GVC as follows
Raising awareness of potential SME to participate in GVC.
Increasing participation in GVC through initiative such as facilitation of SME group for joint marketing, joint purchasing, joint design, and joint promotion campaign.
Promote the establishment of business partnership between SMEs and Multinational Corporation and large enterprise to increase market access and opportunities. This participation can be seen in case of chicken, shrimp, and poultry.
Supplier financing
Promotion of technological upgrading
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 61 ภาคผนวก ก โครงการศึกษาการส่งเสริมการเข้ามีส่วนร่วมของ SMEs ในห่วงโซ่คุณค่าโลกสาขาธุรกิจเกษตรภายใต้กรอบเอเปค
Facilitation of compliance procedures and requirement such as food safety, food hygiene, and agro based standard.
Attracting foreign direct investment to accelerate the integration of SMEs into global chain.
Promoting the networks of selected products relying on product flow in and out within APEC region to help SMEs link effectively with international production, distribution, and consumption networks.
References
ASEAN Secretariat (2008), ASEAN Economic Community Blueprint, ASEAN Secretariat, Jakarta
Asian Development Bank Institute (2015), Integrating SMEs into Global Value Chain: Challenges and Policy Action in Asia, Asian Development Bank, Philippines.
Leturque, H, and Wiggins, S. (2007), Thailand’s Progress in Agriculture: Transition and Sustained Productivity Growth, Overseas Development Institute,
OECD (2008), Enhancing the Role of SMEs in Global Value Chains, OECD, Paris
OECD (2012), Mapping Global Value Chains, OECD, Paris
UNIDO (2006), Working Paper on Global Value Chains in the Agrifood Sector, UNIDO, Vienna,
ศูนย์บริการวิชาการแห่งจุฬาลงกรณ์มหาวิทยาลัย หน้า ก - 62