Some of the modern strategies to be applied this year include electronic trading, the Agricultural Futures Exchange of Thailand (Afet), zoning for central agricultural markets, forward auctions and farm outlet operations.

Siripol Yodmuangcharoen, director-general of the Commerce Ministry's Internal Trade Department, said last week the modern channels would allow farmers to quote prices for their crops instead of trading through middlemen.

In particular, Afet will be an important government channel to solve the problem of price falls. Trading on Afet will allow farmers to check the demand for key farm crops, which will assist them in their management.

The government will try to strengthen the competitiveness of the agricultural sector by slashing subsidies on some economic crops such as rice, rubber and coffee. Without intervention, farmers can get a better idea of the real prices and competitive levels of their crops.

The strategy will also reduce the market distortion which results from intervention programmes.

The value of the country's agricultural goods reached Bt1.1 trillion last year. Of the total, 60-70 per cent came from the principal economic crops, such as rice, tapioca, rubber, palm oil and sugar cane. However, every government budget has set aside billions of baht to shore up the price of these goods.

"By launching the system, the most important thing is to reduce the corruption which always happens in the government's price-intervention programmes," he said.

Siripol said farmers had to prepare by developing their production to meet international standards, so as to ensure trading at fair prices through modern trade channels. 

Moreover, the government plans to create direct sales business at the farm gate under the ''farm outlet'' concept, a marketing strategy to promote crops with the farmers themselves learning more about market demand, which will encourage them to improve their production.

"Finally, farmers will learn more about supply control," he said.

The government will encourage forward auctions to allow farmers to produce in accordance with actual orders, instead of speculating on market prices.

To ensure high quality, the government will focus on infrastructure development. In particular, fresh-chilled and vacuum-fired plants should be set up.

Siripol added that the department had drawn up both international and domestic marketing strategies to encourage farmers to have more marketing information and better potential markets.

The international marketing strategies aim to create more strategic trade alliances, brand and product image-building, international market access and promotion, and market expansion.

To create an attractive product image, farm crops should also be exported under Thai-owned brands. This strategy will also assist the ministry's plan to penetrate more new export markets. Exporters who access new markets will enjoy some incentives from the ministry.

To facilitate exports, the government will consider opening distribution centres in major trading countries.

"We are planning for the country's future trade, which involves research and development of high-quality plant seeds and animal breeds, value creation, supply control, market approaches and quoting prices through business channels. Farmers have to adopt these practices to maintain their competitiveness," he said.

The US Agriculture Department has forecast that world farm production will increase this year, particularly rice, rubber, oil plantations, livestock (pigs and chickens) and aquaculture (shrimp).

However, that will not create tough competition in the world market because the total production of each crop is almost the same as last year. For instance, world rice production is high due to the increasing number of importing countries, but production in major exporting countries such as Vietnam has dropped.

Achara Pongvutitham,

Petchanet Pratruangkrai

The Nation