A Case Study of Knowledge Development for Product and Ecology System Integration at Pa Pae Sub-District, Mae Taeng District, Chiang Mai Province, Thailand

CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

Kunsiree Kowsuvon*

Faculty of Business Administration, Chiang Mai University, Chiang Mai 50200, Thailand. *Corresponding author. E-mail: [email protected]; [email protected] 69 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2)

ABSTRACT his case study is designed to (1) survey and collect data on the TPa Pae tea-growing community; (2) collect local wisdom on community development based on the Sufficiency Economy concept; (3) provide the community with technical knowledge on management, marketing and community production development; (4) determine possible policy or strategy towards the progression of Pa Pae tea-growing community as an eco-tourism destination; and (5) provide the government with suggestions and determine guidelines to achieve the sustainable development phase for the community. Results from this study revealed the fact that tea is an original food of northern Thailand which contains beneficial nutrients. The byproducts of tea leaves are utilized as foods, energy drink and an item for guest greeting and ceremonies. Tea growing and producing are mentioned in the Sufficiency Economy concept as well as in the ninth and the tenth National Economic and Social Development Plans. Nonetheless, tea suppliers and entrepreneurs are facing marketing problems such as unpopularity of tea products, unsteadiness of the price, distance between tea farms and production sites, marketing communications, lack of distributors and lack of knowledge on business management. These problems ranked in severe degrees (3.50, 3.94, 3.63, 3.55 and 3.59 respectively). Suggestions from the study will lead to community sustainability which should result in their self-developing abilities to participate with local government institutes and bring forward better knowledge assessment and provision of counsel and guidance regarding development, transformation, management, marketing, finance and basic infrastructure issues. All of these requirements have to be economical in order to allow the Pa Pae tea-growing community to be able to operate their business, based on the Sufficiency Economy concept. CMU. J. of Soc. Sci. and Human. 2008

Key words: Camellia sinensis L, Ecology System, Knowledge Management, Product Iintegration, the Sufficiency Economy

INTRODUCTION Background amellia sinensis L. is a tea plant species whose leaves and leaf buds Care used in tea production. White tea, green tea, oolong and black tea are all Camellia sinensis L. byproducts, depending upon the processing 70 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) method which leads to different levels of antioxidants (Tan-Kim–Yong, et al, 1994). The consumable tea products are also produced from tea leaves in Camellia sinensis L. family which grows in tropical and warm areas in the northern region of Thailand. The leaves are steamed and fermented by processes which have been inherited for generations. The byproduct is utilized as food and used in many ways such as an energy drink, item for greeting guests and ceremonies. A number of studies conclude that Camellia sinensis L. leaf contains as much stimulating substances as other tea species which can increase endurance of human’s working ability. Tea growing is considered a marketable agricultural career. Tea farm areas are widely spread in the northern region of Thailand where the plant can be grown in isolation after land deforesting. Tea plantations always move from one place to other abandoned areas where higher trees are growing. Such locations are ideal for tea farming because tea grows quicker under plant’s shade. The tea plant can be found on hills located by the rivers in very cold climates (Preechapanya, 1996). Tea-growing History: Tea-growing sites can be located in Chiang Mai, Lam Pang, Chiang Rai, Phrae and Nan Provinces. In Chiang Mai area, tea farms are located in Mae Taeng, Doi Saket, Chiang Dao and Fang Districts. Among these sites, the best and the most famous place is Pa Pae Sub-District in Mae Taeng, called “Historical Tea-growing Community”. Their tea is grown under other trees which were planted after deforesting. According to the ecology theory, tea growing is an important factor for generating revenue and saving forest environment because of its nature of thriving under other plant’s shade. Environment and Natural Resource Conservation: The Pa Pae tea-grower community is an agricultural community operating on natural resources. Their conservation concept which utilizes soil, water and forest is related to agro-forestry (Baver, 1995). Their tea grows on soil which contains only organic fertilizer with no chemicals employed. Organic CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

fertilizer also saves the tea-farming cost. The process runs according to an agricultural system of multi-plant species. Although tea steaming requires burned wood as fuel, not much fuel is needed. As a result, tea-growing farms are considered to be environmentally-safe and -friendly (Preecha- panya, 2001). Society and Culture: In Thailand, tea has been a part of social life as a product is consumed daily for a long time. Tea growing connects people. For example, local community people are all involved in the farm business through economic and social relations as suppliers, vendors and consumers. A tea farm can be a working and also a living place for 71 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) farmers. The tea products are also used as food and are often involved in local ceremonies. Economics: Tea is an economic plant which creates relationships between hill tribes and metropolitan inhabitants via trading. Furthermore, the tea-manufacturing process can also link the farm workers with their entrepreneurs. Response to the Political, Economical and Social Change: The northern Thailand agriculture system has become more commercial, in turn, affecting the forest conservations. The tea-growing business generates labor flow of hill tribes to nearby cities. Recently, hill tribe workers are decreasing because they moved and became city laborers. Economic expansion and commercial plant growing changed the tea-growing into family-industry business (Wongweerapant, 1997). Govern- ment policy in B.E. 2518 enforced land management and water resource conservation by planting more forest together with developing economics and society for people living near rivers. A plan for the promotion of plant replacement serves the purpose of land utilization and commercial-related plant growing. The community members have a variety of land use interests. Tea farms cannot be expanded because some areas were transformed into fruit or other tea species fields. Some tea entrepreneurs sold their tea fields to accommodate their investors because the law offers opportunity to develop conserved forest areas into tourism destinations. These issues are very crucial. They decrease the amount of local suppliers. If the community loses their natural resources, their valuable history will disappear. CMU. J. of Soc. Sci. and Human. 2008

THEORETICAL FRAMEWORK his study is designed to find the guidelines to manage an original tea Tcommunity, based on an ecological approach in an area with high altitude. Knowledge development emphasizing on product management can increase economic value by following the existing concept. This can generate revenue and extend the market to a new generation by finding the way to develop the tea product, improve the tea-growing community to be an eco-tourism destination, promote the culture, grow substituted plants which save the ecological system and manage households and com- 72 munity. There are 5 important tea-growing districts in Chiang Mai: Mae CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) Taeng, Chiang Dao, Fang, Doi Saket and Mae On. However, this study concentrates on Pa Pae Sub-District, Mae Taeng District and uses data analysis based on Philip Kotler’s marketing mix Theory (Kotler, 2003). The rating method developed by Rensis Likert’s rating scales is divided into 5 degrees and scoring criteria is defined as follows (Zikmund, 2003): Problem and threat degree Strongly Agree scoring criteria equivalent 5 Agree scoring criteria equivalent 4 Uncertain scoring criteria equivalent 3 Disagree scoring criteria equivalent 2 Strongly Disagree scoring criteria equivalent 1 To group score by class interval method (Vanichbuncha, 2004) C = Maximum Score – Minimum Score Interval Interval = 5 - 1 5 = 0.80 Average Score Conversion Criteria Average Score between 4.21 – 5.00 is Strongly Agree Average Score between 3.41 – 4.20 is Agree Average Score between 2.61 – 3.40 is Uncertain Average Score between 1.81 – 2.60 is Disagree Average Score between 1.00 – 1.80 is Strongly Disagree Study method: 1. Literature on documents and research reports about business management, production technology development, tea-production know- ledges. 2. Survey the area’s condition and utilization in Chiang Mai Pro- vince. CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

3. Create Geographic Information Systems (GIS) data to work out the situations. 4. Define guidelines and strategies for tea-community development. 5. Brainstorming through the community forum for ideas and suggestions including strategy training. 6. Presentation of the study and research results to the government sectors such as local organizations and provinces.

73 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) MATERIALS AND METHODS Timeframe his study was conducted in 2006 at Pa Pae Sub-District, Mae Taeng TDistrict, Chiang Mai Province, Thailand. Sample People of interest are categorized into 2 groups: 1. Government Officer group: Sub-district Administrators, Village Leaders, Community Leaders, Group Leaders (amount of 50) 2. Tea-growing and production group (amount of 300) Data collections were operated by questionnaire distributions and sampling-methods by surveying the community’s potential before inter- viewing via questionnaire.

Materials This study used the field-survey method to obtain studying-area conditions (topographic reconnaissance survey) by utilized land or area mapping, spatial image photographing and aerial photographing. The survey basically requires the principle of map interpretation and mapping. The survey map has 1:50,000 scale of a commonly-used military map version L7071. The survey still requires Ortho photo, Satellite IKONOS’s photo and Geographic Information Systems (GIS) which are able to detect utilized area, in UTM Systems (Universal Transverse Mercater Systems) via a GPS (Global Positioning Systems) device and a detecting compass. Additionally, this study also used closed-ended and open-ended sets of questionnaires to collect the data from two divided groups: • The first set of questionnaire used to interview tea-growing and production entrepreneurs consists of 7 parts: 1. Part one: General Information (Gender, Age, Education, Relation- CMU. J. of Soc. Sci. and Human. 2008

ship Status, Occupation and etc.) 2. Part two: Tea Business Information (Type of Business, Starting- up, Run time, Capital, Suggestion and etc.) 3. Part three: Tea-growing and production Information (Revenue, Cost, Labor and etc.) 4. Part four: Production Process Information (Seed-growing, Growing, Maintenance, Harvest, Steam bath, Fermentation, Packaging) 5. Part five: Production Process Management (Delegation, Organiza- tion, Yield Management, Pricing, Distribution, Accounting and Financial 74 Planning) CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) 6. Part six: Operational problems and threats (Problems and threats about product, price, place, promotion, and person) 7. Part seven: Land Utilization and Ecology Conservation Informa- tion (Land Utilization for tea growing, Land Acquisition, Land Maintenance and etc.) • The second set of questionnaire used to interview government officers, community leaders and group leaders includes 4 parts: 1. Part one: General Information (Gender, Age, Education, Occupa- tion, Scope of Responsibility, Run time, Institute and etc.) 2. Part two: Strategy from institute supporting tea growing and production in community to respond OTOP Strategy (Strategy for Potential, Infrastructure and Environment Development and etc.) 3. Part three: Ecology Conservation Role (Forest, River and Land) 4. Part four: Advices and suggestions (suggestion about product development and management, suggestion about the government policy in management and supporting and etc.)

Data collection Each set of questionnaire was attached with preface letter informing the study objectives and requesting for their participation. The questionnaire was delivered individually to the subject at his/her home. A week later, 293 questionnaires were collected from the selected populations.

Data analysis This study uses the computer SPSS program, the Philip Kotler’s marketing mix and the Likert’s rating scale concept to analyze respondent’s answers. First, the author read all the answers and formulated the criteria in order to categorize the similar answers into the same sort. The answers were then listed and obtained accordingly into their suitable criteria and checked for their reliability of content through the analysis. The analysis resulted in a reliable data set because of its high kappa coefficient. The CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

author had adjusted the discrepancies of content analysis, using the recorders.

RESULTS 57 questionnaires were collected with the return rate of 85.7% among 2300 questionnaires from the selected populations in 7 villages which are Moo3, Moo5, Moo6, Moo7, Moo9, Moo12 and Moo13. And 36 questionnaires were gathered with a return rate of 72.0% among 50 questionnaires from the Tambon Administrative Organization officers, 75 Community Leaders, Village Leaders, Group Leaders. CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2)

1. Findings from the tea growers and the fermented tea entrepreneurs Most of the respondents were married, male, aged between 41 – 50 years old. Their education levels were mostly elementary school. Their main occupations were employees and tea growers. The fermented tea business was considered as a family business, run by one owner. The business was inherited from their ancestors for more than 20 years. Most of the fermented tea businesses were generated by family’s revenue and need promotion and assistance from government sector in order to enhance knowledge base of product transformation, packaging, breeding, business administration, management and marketing. Besides, the respondents also needed ecology knowledge to improve the water supply, land use and new technologies for increasing their production and energy saving as well as reducing the expenses. The respondents earned 20,000 Baht (589 USD)* annually by growing tea and earned 30,000 Baht (883.39 USD)* annually by selling fermented tea products. Each household hired 2 employees for 4 months annually with 100 Baht (6.89 USD)* wages per person per day. Most of the expenses of tea plantation were fuel, logistic and packaging. Some of them had to pay 2,500 Baht (73.61 USD)* as their distribution and production expenses. Even though tea grew up naturally, the growers had to get rid of weed and take care of production process in the harvest season. The expense for packaging was about 100 baht/tau (1 tau = 109 kilograms). The expense for package was about 20 Baht/tau (1 tau = 109 kilograms). It was found that there was no exact management system because most of the entrepreneurs handled their business by sharing work load within their household. Besides, after packaging, the middleman would handle the tea product. The leftover product would be sold to the steady customers. The

*Current exchange rate 11/2007 1 USD = 33.96 Baht CMU. J. of Soc. Sci. and Human. 2008

middleman would set product price. Most of the products were retail sale rather than whole sell. Most of the tea growers did not have production plan because they have to wait to see customer’s need. When analyzing problem under Philip Kotler’s Theory of marketing mix and rating scale by Likert, it was found that most of the respondents faced problems and difficulties in marketing as follow: 1. Product The problems which the respondents ranked at the first level were lack of labor (3.63), expensive and rare fuel (3.58), and non popularity 76 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) among consumer (3.80) consecutively, while low-technology equipment (2.90), lack of tea leaves (2.90), long-term production (3.31), and cleanli- ness of products (3.01) were ranked at the moderate level, consecutively. 2. Price The problems which the respondents ranked at the first level were high production expenses comparing with product sales (3.89), unattractive price (3.94), narrow market (3.83), and lowered price by the middleman (3.51) while do not know distribution channel (3.38), no fixed price (3.32) were ranked at the moderate level. 3. Place The problems which the respondents ranked at the first level were the distance from market is too far (3.63), and high logistic cost (3.70) while unclean production area (2.77), no show room (3.21) and sanitation of production area (3.18) received the moderate level. 4. Promotion The problems which the respondents ranked at the first level were lack of product promotion (3.55), unattractive packaging (3.54) and lack of product leaflet information (3.54) while no free sample product distributed among department stores (3.38) was ranked at the moderate level. 5. Personnel The problems which the respondents ranked at the first level were lack of production process development (3.58), lack of systematic management knowledge and labour training (3.52), and lack of local wisdom transmission to new generation (3.59) while lack of technology development (3.48) and lack of systematic management (3.07) were ranked at the moderate level. • For land use and ecology conservation in tea-growing area, it was found that land use for tea-growing area in B.E. 2548 remained the same, comparing with B.E. 2532 plantation. The data indicated that the plantation encompassed an area of 1,430.64 rai (See figures and tables). CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

Table 1: Land Use in 1989 at Pa Pae Sub-District, Mae Tang District, Chiang Mai Province. Land use Area (rai)* Percentage Tea 1,430.64 0.69 Paddy Field 1,424.91 0.69 Hill Evergreen Forest 132,355.49 63.72 Mixed Deciduous Forest 507.48 0.24 Dipterocarp Forest 9,291.95 4.47 Evergreen Forest 18,713.98 9.01 77 Mixed Swidden Cultivation 19,860.26 9.56 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) Mixed Forest Plantation 23,950.84 11.53 Village 168.94 0.08 Total 207,704.49 100.00 Source: Land Development Department,1989 *6.25 rai = 1 ha

Table 2: Land Use in 2005 at Pa Pae Sub-District, Mae Tang District, Chiang Mai Province. Land use Area (rai)* Percentage Tea 1,430.64 0.69 Village 1,727.08 0.83 Paddy Field 1,424.72 0.68 Hill Evergreen Forest 131,733.30 63.14 Seasonal dry Forest 11,548.47 5.54 Mixed Deciduous Forest 11,548.47 5.54 Agriculture Area 10,303.93 4.94 Deciduous Forest 2,450.81 1.17 Ping Garden 36,462.97 17.48 Total 208,630.39 100.00 Source: Land Development Department, 2005 *6.25 rai = 1 ha CMU. J. of Soc. Sci. and Human. 2008

(a) (b)

78 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2)

Figure 1. Map of Land Use in 1989 (a) and 2005 (b) at Pa Pae Sub-District, Mae Tang District, Chiang Mai Province.

Figure 2. Map of Tea Plantation Area at Pa Pae Sub-District, Mae Tang District, Chiang Mai Province.

• For soil preservation, it was found that the respondents grew other plants to cover the soil and keep shade for tea and get rid of weed. When there was forest fire in the dry season, the respondents would help the fire fighter to stop the fire as well as set security guard for watching. In the rainy season, the respondents would build dam to prevent land slide. In case of land slide, the respondents would ditch the silted-up area. After the harvest season, the respondents would layer on top of the old branches in order to increase new leaves. CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

• For water resource conservation, the respondents would ditch the silted-up area in the drying season and build dam in the rainy season and did not erode chemical substance or waste. Their conservation cost ranged between 2,000 – 10,000 Baht (58.89-294.46 USD) annually.

2. Findings from government officers of the Tambon Administrative Organization (TAO), community leaders and group leaders Most of the respondents were male, aged between 41-50 years old. Their education levels were mostly vocational school. Their major roles in fermented tea business were strategic co-entrepreneur of community 79 in supporting the OTOP product and provincial tourism. Most of the CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) respondents agreed that capital fund, production knowledge and suggestions were needed. Besides, it was found that the survey about the need of entrepreneurs and community should be done in order to know their problems and needs. Moreover, government officers of the Tambon Administrative Organization (TAO), community leaders and group leaders should take part in conserving the ecology and support the community’s activities such as water resource management, dam building, soil nourishing by using manure and preserving ancient perennial trees. The respondents suggested that product development and management could be resolved by every sector. The helps could be providing and developing factory and production process, finding market shares and setting a committee for fund raising, especially low-interest credit, and try to develop their product quality to reach standard of the consumers. It was recommended by the respondents that government sectors should take part as coaching for training and advice. Besides, government sector should provide horticultural plants to combine with tea plantation in order to increase soil properties, find market shares, offer technologies and funds for production process development. Especially, the Tambon Administrative Organization (TAO) should work hand in hand with the central office for such helps.

DISCUSSION ccording to the Sufficiency Economy philosophy granted by His AMajesty King Bhumibol Adulyadej, the underlying self-reliant, the healthy community theory in the ninth and the tenth National Economic and Social Development Plans, it was found that the healthy community theory aims at self reliance, freedom to chose the way of life indepen- dently and ability to develop themselves using their local resources. The CMU. J. of Soc. Sci. and Human. 2008

guideline which follow his majesty the King’s new theory could lead us to achieve the goals mentioned. The theory suggests three developing stages consequently as; 1) beginning stage, farming for living, 2) secondary stage, joining hands among local communities to run small scale business and 3) coordinate with trading organizations and making connections with large scale markets. The combination of studied philosophy, theory and Thai’s economy developing plan did bring forward the fact that Pa Pae community undergo household scale business and joining hands to produce agriculture based products using local resources. These tasks provide income and jobs 80 for people in Pa Pae community to gather with the obstruction of Labour CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) from moving into big city. The social capital investments are heritage idea from Thai ancestors which encourage people to use their local and natural resources conservatively. The Pa Pae tea community applies this idea to sustain their living, follow his majesty’s word and truly undergo sufficiency economy life style.

CONCLUSION he main content of the ninth and the tenth National Economic Tand Social Development Plans generated the Sufficiency Economy philosophy as a guideline for national development under the following objectives, goals and strategic development by emphasizing on strength of economic base. It also focused on community trade, unique standardized products and services, transmitted information and news to community for product transformation as well as enhancing their market. Moreover, the content aimed to offer an opportunity for poor people to reach out and gain benefits from natural resources which take part in preserving natural resources. Finally, community and economy base were strengthened in order to enhance and increase individuals’ potential and capacity. The process of participation in decision making and teamwork on development were encouraged among community. People had more income and improved administration as groups of workers who applied their local wisdom and appropriate technologies in order to connect their domestic market to foreign markets.

SUGGESTIONS hen considering the Sufficiency Economy theory in the ninth WNational Economic and Social Development Plan in regard to the CHIANG MAI UNIVERSITY JOURNAL OF SOCIAL SCIENCE AND HUMANITIES

issue of education, it was found that even though Pa Pae Community generated fermented tea by using natural products in their local community, the entrepreneurs and the tea growers still faced problems and difficulties. Particularly, these problems included a lack of knowledge and help for integrating their products to reach their goals and could not follow the government strategic plan on both the provincial and national levels. Therefore, suggestions from this finding applied the Sufficiency Economy theory for enhancing value among the Pa Pae fermented tea community which was considered the original base of the tea-growing community. It also suggests increasing the quality of fermented tea which 81 CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) is a popular snack among younger generations. Importantly, people could distribute their product among the local market to a regional market as well as a national market. If there was a potential in the future, the international market will also be an interesting market. To do so, the government sectors should offer advice, training, product transformation and management, finding market shares, and related infrastructure for the community. It is hoped that the community lives under the Sufficiency Economy philosophy and the Middle Path would be sustainable in the future.

LIMITATIONS imitations of this study were timeframe (6 months) and budget L(80,000 Baht) (2,355.71 USD). There are also other communities involving in the tea plantation and tea-fermenting business like the Pa Pae tea-growing community, for example, in Mae Tang District includes Pa Mieng, Doi Saket, Inthakin, Muang Kawy, Mae Tang, Chiang Daow, Ruang, Fang, Huay Kaew and Mae On Sub-Districts. This research had to choose only one area. As a result, the problem of different areas would affect the findings as one of the weak points. Moreover, these suggestions would appear to have several methods. However, the studying area is considered as one of the most critical tea-growing areas for investigating production problems.

SUMMARY ermented tea is mostly consumed by elderly people in Chiang Mai FProvince. It is used in the rites, for food as well as a welcome snack for guests (Sinsethakul and Suriyakarn, 1994). Fermented tea is traditionally an inherited wisdom which uses local resources in its production process CMU. J. of Soc. Sci. and Human. 2008

without new technology. Tea plantation is usually located in the shade which is under strict control of related government officers. The business is a reciprocal commercial agriculture business that concerns ecology, land use and water resources. The finds also suggested that the entrepreneurs had low education background. Therefore, they had insufficient knowledge that would benefit their product development. The respondents encountered problems such as production, price, market, promotion and personnel development. The respondents also suggested that the critical problems should be resolved 82 by government sectors. The local organization should join with provincial CMU. Journal of Soc. Sci. and Human. (2008) Vol. 2(2) organization in order to serve OTOP development and ecotourism in the future.

ACKNOWLEDGEMENTS he author is grateful to the Faculty of Agriculture, Chiang Mai Uni- Tversity for financial support and to the Department of Management, Faculty of Business Administration, Chiang Mai University for providing facilities.

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