Govt seeks to address low agricultural prices

The issue of low agricultural-product prices in Thailand is a recurring problem faced by the agricultural sector every year. This issue can arise from various factors, such as an oversupply of produce exceeding market demand, disease outbreaks, and other causes. 

It is a primary challenge that every government must confront and find solutions for. Some governments have even faced protests from farmers demanding swift action to address the problem.

This issue is particularly acute for five key agricultural products: rice, cassava, palm oil, animal-feed corn, and rubber, which have a combined annual market value of no less than 800 billion to 900 billion baht.

Additionally, there are other agricultural products such as fruits, root crops, and field crops. This persistent issue is a "hot potato" for every government, including the current administration led by Prime Minister Srettha Thavisin. 

Upon assuming office, Phumtham Wechayachai, the minister of commerce, outlined a strategy to address agricultural-product prices. This strategy involves collaborating with the private sector to boost exports, improving agricultural product quality under the policy "Market-led, Innovation-enhanced, Income-boosted," managing market mechanisms, and proactively planning for all products. 

This includes pre-emptively addressing problems, reducing costs, and improving infrastructure, particularly efficient water management.

As a result, on July 18, Srettha summoned Vuttikrai Leewiraphan, permanent secretary of the Ministry of Commerce, and Wattanasak Sur-iam, director general of the Department of Internal Trade, to discuss measures for maintaining the price and quality of agricultural products expected to enter the market in the second half of the year. 

Srettha requested that measures be put in place to support farmers, including involving major business operators in these efforts, in addition to the Ministry of Commerce's existing measures to manage agricultural product prices.

Srettha emphasised that about 50% of the produce expected in the second half of the year requires price and quality control. He directed Vuttikrai and Wattanasak to oversee the secondary crops, such as fruits, root crops, and vegetables, with plans in place for such products as northern longan and southern mangosteen, as well as root crops expected later this year.

"I have emphasised that we need to involve major business operators, especially publicly listed companies, in managing domestic agricultural produce and raising prices through the production of high-quality agricultural goods, establishing market standards, and opening new markets," the prime minister said.

Following Srettha’s directive, Phumtham, who is also deputy prime minister, ordered officials to expedite the prime minister’s orders. They were instructed to coordinate with major companies, especially those listed on the Stock Exchange of Thailand, to assist in managing domestic agricultural produce through purchasing, selling, or marketing efforts to help farmers achieve better prices.

Wattanasak said: "Large companies or tycoons usually engage in social responsibility activities, or CSR. We are asking them to assist the ministry in managing agricultural produce. 

“The traditional methods of price intervention and purchasing are not sustainable. We need the help of major players. So far, discussions with major business operators have shown they are willing to cooperate with the ministry." 

Initially, coordination with business operators has been set up to help absorb agricultural produce, ensuring that large entities assist smaller farmers as directed by Srettha. Under the "proactive management" approach, the goal is to manage 313,474 tonnes of agricultural products across three groups.

Ten business groups and 20 networks, comprising 18 companies, are involved. The 10 groups are:

Hospitals
Product manufacturers
Retail and wholesale
Hotels
Villages/condominiums
Fuel stations
Airlines
Platforms
Industries
Processing and export

Major business operators involved include PTT Public Company Limited, Charoen Pokphand Group (CP), Thai Beverage Group, and modern retail chains such as Lotus, Big C, Makro, Tops, Go Wholesale, Central, The Mall, ICONSIAM, Emporium, EmQuartier, Asiatique, large local stores, and petrol stations operated by PTT, PT, Shell, and Bangchak.

Srettha’s directive to have the Commerce Ministry involve major domestic business operators in absorbing agricultural produce aims to push up agricultural-product prices, supplementing other measures previously implemented.