Thailand Board of Investment (BOI) Introduces New Measures Aimed at Modernizing Agricultural Sector, Enhancing Thailand Competitiveness
BANGKOK – Agriculture has long been the backbone of Thai economy and remains so today. Looking ahead while the country is transforming itself into an advanced economy, the Thai government is modernizing the country’s agricultural sector through various investment promotional schemes and development policies to increase agricultural sector’s efficiency and competitiveness.
Thanks to the country’s rich resources, agriculture has been a major activity that feeds the countries for centuries. Thailand has been famous for crops like rice and rubber for a long time. For decades, the agricultural sector has contributed slightly over 10 per cent of the country’s GDP, according to the National Economic and Social Development Board. However, most farms continue to use traditional ways of farming, resulting in low productivity and income but having high cost. If this issue is well addressed, the sector’s potential will be improved.
Given that the country already has a strong agricultural sector base, the Thai government believes in the country’s potential to be the world’s major food supplier and help alleviate possible future food supply shortage from rapidly growing world population. To take this role, the country sees the importance in modernizing the farming sector through advanced technology and to have clear roadmap for agricultural sector development.
According to Ms. Duangjai Asawachintachit, Secretary General of the Board of Investment (BOI), agricultural sector had been one of the target industries eligible for promotional privileges for decades. However, to address the need for advanced technology deployment to enhance the sector’s productivity and competitiveness under Thailand 4.0 policy, BOI in September 2017approved the addition of a new category for promotional privileges — Production or Service Providers for Modern Agriculture. Under this new category, projects providing services on advanced technology and automatic control system to operate farms are eligible for five-year corporate tax exemption.
Meanwhile, BOI introduced measures to promote improvement in production efficiency of existing agricultural investors through implementation of technology and machinery upgrade to meet with such international standards and certifications as Good Agricultural Practices (GAP) and ISO22000 Food Safety management. Under this measure, corporate tax holiday is offered within a 50 per cent cap of the total investment for the upgrade and improvement of machinery application is accepted until 2020.
In addition to the new investment promotion measures, the Ministry of Agriculture and Cooperatives has introduced other measures in parallel.
Designated agricultural zoning in all provinces are identified based on each area’s geographical and climatic conditions. The “Agri Map” will be adopted to suggest farmers to grow crops suitable for their respective farmland. This will allow the country to have more focused agricultural activities with full consideration on the availability of local resources and area-specific condition and environment.
The Thai government also suggested that farmers adopt a large scale farming model where they share a plot of land within their own group and grow their own crops, which helps collectively reduce production costs and increase their competitiveness. Around 600 large scale farming land plots were launched in 2016, with another 400 plots to be added in 2017 to make a total of 1,000 plots by end of the year.
Countrywide learning centers for farmers
To help farmers make the right decision and grow the right crops that suit local geographical conditions and knowledge to improve farm efficiency, learning centers are established to provide them with sufficient information to make an informed decision and thus increase efficiency of agricultural production.
Under this scheme, each district nationwide will have one learning center of this kind. This will enable each district to build a strong body of knowledge and share it with farmers in their area. Through learning and experience sharing, farming improvement will soon take shape to support Thailand 4.0 vision.
In addition, the grouping of farmers and farmland will be promoted for greater efficiency, which will enhance cooperation between farmers and the public and private sectors, in the form of “Public-Private-People Partnership.”
GIS for Agriculture
Modern geographic information system (GIS) technology can substantially improve agricultural production and sustainability. The Geo-Informatics & Space Technology Development Agency (GISDA), Ministry of Science and Technology, has applied geo-informatics technology for agriculture development to be used for agricultural management and monitoring of crops, quality control management for agricultural products, and planning of cultivation.
“All the measures and schemes mentioned above are the supply side of the market,” said Ms. Duangjai. “Under the Thailand 4.0 model, Thailand is taking a new approach. We are addressing the demand-side of the market.
“In this regards, the government encourages farmers to produce crops in response to the market demand. This means, instead of looking at their expertise and preference, farmers are encouraged to study more on what the market demand really is. Through adoption of advanced technology, they can then upgrade their products to international standards and produce the products that the market needs. Therefore currently we places more emphasis on promoting the improvement of agricultural product standard and quality with the help of new technologies, which will make Thai agriculture sector become more competitive in the world market and so as to Thailand,” said Ms. Duangjai.
The Board of Investment of Thailand (BOI)
Tel. +66 (0) 2553 8111 Ext. 6932