It is hoped the factory will solve the government's long-term losses by restructuring production of export fruit. Initially, the plan will focus on the East where the country's main fruit export plantations are based.

Anchalee Ooraikul, secretary-general of the Office of Agricultural Economics, said the ministry had budgeted Bt220 million as initial financial support for an integrated factory to serve three large fruit-growing provinces - Rayong, Chanthaburi and Trat.

The factory will chill, freeze, steam, package and process fruit under a single roof to ensure high quality.

Fruit exporters often prefer to ship fresh fruit rather than frozen, chilled or processed products. However, the project will try to encourage farmers to grow more value-added products such as ready-to-eat durian.

In addition, farmers and exporters will be encouraged to create their own export brands.

She added that fresh fruit for export must be of high quality and be free of insects. Hence exporters needed a steam factory that conforms to international requirements. Mangosteen and mangoes need to be steamed to kill insects and ensure a longer shelf life for shipping. Farmers who participate in the programme have to develop their farm-management techniques to meet ministry standards, she said, and become certified for good manufacturing practices.

"The plan is designed to solve long-term problems of oversupply and losses. We want to reduce spending by the Farmers Assistance Measurement Fund," she said.

Anchalee said the ministry wanted to halt price fluctuations in rambutan, mangosteen, lychee, durian and longan. The fund spends Bt300 million-Bt400 million a year maintaining prices when those fruits enter the market, mainly in the summer.

The government spent Bt5 billion maintaining longan prices during the 2003/04 harvest.

Anchalee said the office also spent Bt53 million conducting research into making longan trees bear fruit out of season.

Achara Pongvutitham, The Nation