Project description

Title: Promotion of Northern Agro-Industry Clusters
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ) (Federal Ministry for Economic Cooperation and Development)
Country: Thailand
Lead executing agency: Department of Industrial Promotion (DIP)
Overall term: September 2005 to August 2007

Context

Three of the most important agro-enterprise sectors in the north of Thailand are longan and tangerine fruits and mulberry paper. Longan alone employs more than 100,000 growers, with another 40,000 SMEs involved in logistics, processing and exports. In the tangerine sector, employment is as high as 70,000 and in mulberry paper 6,000 families in Thailand and 20,000 families across the border in Laos are reliant on this industry.

Objective

The purpose of this project is to enhance the competitiveness of these three important northern-based sectors. In practical terms, this means improving the productivity and business performance of SMEs, including small farmers along the value chain, and by introducing innovative products and processes that are environmentally sustainable. The aim is to create additional value added in the whole sector and thereby secure or expand employment and incomes in the clusters in which the sectors are most prominent.

Approach

The methodology of the project involves a detailed analysis of the three sectors. In this analysis of the value chain, sector-based constraints and opportunities are identified and strategies then developed to make the sectors more competitive in the immediate and near future. Based on this analysis, project measures are then designed together with a wide range of partners including business organisations (chambers and associations), private enterprises or lead firms and government agencies. These measures are all geared to key competitiveness indicators for the identified sectors.

Results achieved so far

Together with the private sector and key government agencies, strategies have been formulated for all three sectors and preliminary measures are in their first stages of implementation. These measures include the promotion of commercial farm management advisory services aimed at productivity increases, improved certification standards to increase the prices of the products, and the development of financial loan packages aimed at increasing the availability of credit to key actors in the sectors’ value chains.

This project is part of the

• Thai-German Programme for Enterprise Competitiveness: Business and Financial Services Component