It is now time for Thailand to share what it has learnt with the least-developed economies.
A cooperation venture with German International Cooperation and Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) was kicked off in 2008, to share Thailand’s best strengths with neighbouring countries under a government-to-government framework. Out of the funding of ค120,000 per project, Thailand contributes 30 per cent and the German government sponsors the rest.
“These countries can ask for help in specific areas,” said Jarukan Rassiri, programme manager of Thai-German Trilateral Cooperation. “They need not be the areas where Germany assisted Thailand before, but it can be in areas where Thailand possesses strengths.”
Since the programme was kicked off, six projects have been launched. Two projects in Vietnam aim to help the country strengthen its small and medium-sized enterprises, and set up a cooperative scheme. One project in Cambodia was started recently, after being delayed due to political tension between Thailand and Cambodia.
Three projects are now being undertaken in Laos, including the project to develop the Song River basin and help Laos achieve the Good Cultural Practices certificate. But GIZ should witness great success from the posaa mulberry capacity enhancement project.
According to Jarukan, the posaa project was inspired by the fact that Thailand reaped export income of more than Bt5 billion from Sa paper, though about 90 per cent of the raw material, posaa, is supplied from Laos. While farmers in Laos get Bt4-Bt8 per kg of posaa, the price goes up to nearly Bt50 when it reaches a Sa paper factory in Thailand. Laos wants the right knowledge to get the right materials.
The Lao government also wants to promote posaa plantation at a time when forests are being encroached upon for plantation of high-yield crops like corn.
At the end of the project, a Sa paper factory – a Thai-Lao joint venture or a Thai-owned business – is envisioned.
Success will not come overnight, though.
Started three years ago, the project involved mainly training supervision by experts from Thailand. Lao officers were trained to educate Lao farmers in harvesting and preparing posaa, so that they could get a better price. The officers are also equipped with knowledge to bargain with middlemen to raise the posaa price in the hope that higher income would encourage farmers to shift from other economic crops like corn and Job’s tears, which have led to forest encroachment.
Under the project, farmers are encouraged to adopt new practices in nurturing naturally grown posaa trees, properly peeling off the bark and storing the material.
According to Somland Insaveng, an officer of Muang Ngern, a district of Hongsa, farmers are discouraged from growing posaa due to the low prices. Sometimes, they had the material but no buyer showed up. The material was then tossed away.
Khamsing Chindamany, another officer, said that pricing is the key. Price guarantee would help a lot in encouraging farmers to join the scheme.
In Hongsa, farmers’ household income is only 3 million kip a year or about Bt12,000 a year.
That explains why Rat Jongjin, a farmer in Hongsa, is upbeat about the project.
“If the price is 5,000 kip [Bt20] a kilo, I would quit growing rice,” he said. “The price-pledging scheme is attractive. Now, we are producing posaa as a source of extra income.”
Raksak Lorseemek, the representative of a Thai Sa paper mill, said the price-guarantee scheme is welcome if it guarantees raw material supply. Thai paper-makers have so far been disappointed with the supply of raw materials. Even though they are ready to pay a higher price, they have to face problems in dealing with the authorities and in transporting the materials out of Laos.
He also complained about the lack of uniformity of transport rules of different cities in Laos.
Covering 300 households, the trilateral project’s target is to produce 500 tonnes of posaa per annum. About half the quantity will be supplied to Sa paper factories in Thailand while the rest is expected to go to the Sa paper factory expected to open in Laos after the project ends in March 2013.
Thai Sa paper factory owners are being coerced to pay for seedlings, to guarantee raw materials. Lao agricultural officers are positive that if the posaa price goes up, more farmers would join the scheme. According to Kamsing, the Sa paper factory could also help in this regard. And the Lao government is ready to offer incentives, including a rule barring any new factory in the same area for five years, aside from other tax incentives.
“If farmers can sell directly to the paper mill, the middlemen would be cut off and farmers would get a higher price. This will encourage more farmers to grow posaa and earn a higher income,” he said.
The Thai-German scheme also commissioned a feasibility study of the desirable Sa paper factory in Laos. The factory is designed to come up with an environmentally friendly water management system. However, as a full-scale factory could require an investment of more than Bt50 million, investors are more inclined to test the waters with a small-scale model that requires the investment of some Bt5 million. Some Thai investors who own factories in Chiang Mai and Sukhothai are now in Laos to inspect potential locations.
According to Jarukan, similar consultation would be extended under the trilateral cooperation. When the first batch of Germany’s financial help ends in 2014, she expects to have 8-9 projects. Timor Leste could be another country to benefit from the cooperation, as it is seeking continued consultation on Thailand’s knowledge of the sufficiency economy philosophy.
By Achara Deboonme