Join IFAD and the Global Donor Platform for the launch of the report: The strategic role of the private sector in agriculture and rural development. Jonathan Mitchell (ODI), lead author of Platform Knowledge Piece 3 will be joined in his presentation via video by the authors of the Tanzania, Thailand and Vietnam country studies: Frédéric Kilcher, Wyn Ellis and Pham Thai Hung. A Question and Answer session will follow each discussion point.

1. Thailand country study
Wyn Ellis – Novia Consulting Group
28 March 2012

2. Structure of presentation
1. Subsectors covered by the study
2. Key trends
3. Private sector response
4. Current interventions / lessons learned
5. Donor strategies
6. Conclusions
2

3. Value chains studied
1. Rice
2. Chickens
3. Horticulture
4. Cassava
5. Rubber
6. Sugarcane
(All strategically important either as domestic staples or as
exports)
3

4. Key trends
1. Commodity-based support policies
2. Restructured supply chains driven by expansion of
modern trade retailers (domestic / overseas)
3. Contract farming based on private safety / quality
standards
4. Emerging interest in organic / GI / Fair Trade markets
4

5. Private sector responses in agriculture
Main sources of investment
• Domestic agribusiness conglomerates
• International retailers
• Institutional investors (e.g. IFC)
Recent changes in value chains
• Food increasingly channelled via formal sector retail outlets
• Growing concentration at all levels
• Shortening / rationalization of supply chains
• Shift to higher value products
• Private sector standards for food quality and safety
• ‘Professionalization’ of farming / increasing farm size
• Contract farming
5

6. Current interventions- summary
Macro-level interventions to improve enabling environment
Intervention Main lessons
• Commodity-based support policies • Need integrated policy-making based on economic rationale
• Current policies adversely impact export competitiveness
• Rice pledging scheme • Distributional impacts of policies favour business, hurt
farmers, increase inequity
• Distortion of cropping systems
Direct financial assistance to business
• BOI incentives (tax exemptions and holidays for • Agribusiness, not farmers, are the prime beneficiaries
overseas food industries)
• BAAC credit scheme for farmers • Large farmers dominate among beneficiaries
• IFC US$70 million financing package for Saha • Need for investors in contract farming operations to focus
Farms group to expand poultry operation on equity for small farmers
Market development
• OTOP scheme aimed to help SMEs • Mkt development should be demand-driven and requires
closer linkages with real markets
• Food safety standards initiatives • Strengthen control systems / surveillance / traceability to
strengthen international credibility
Dialogue & partnership with business
• TCC/FTI are govt’s de facto dialogue partners • Broader, genuine consultation processes needed
6 Source:

7. Donor strategies
Policy dialogue
• Structural adjustment programmes
• Policy reform to enhance coherence and tackle rural inequity
• Re-examine land and water policy
• Reform public sector research programmes
Market development
• Facilitate market access, credit for smallholders
• Incentivize private sector engagement with smallholder producers
• Minimize market distortions and perverse incentives affecting the poor
• Implementation of safety, quality and ethical standards
• Institutional reform- support producer groups
Financial assistance to businesses
• Social venture capital to boost grassroots initiatives supporting smallholders
• Specific assistance to strengthen competitive position of small farmers
• Finance for income diversification
Dialogue /partnerships
• Strengthen stakeholder consultation processes
• Encourage private sector partnerships to promote technological innovation / upgrading among smallholders
7

8. Conclusions & challenges
• Agribusiness continues to flourish, though agricultural
competitiveness is declining
• Policy environment distorts markets, promotes inequity
• Restructured supply chains marginalize small
producers, impact rural economy
• International donor community has a role at both policy and
grassroots levels in addressing inequity, market linkages and
access to knowledge, technology and finance for smallholders
8

9. Policy, institutional reform
and governance - key to
long term competitiveness
Isvilanonda (2012)