Story Metta Kongphan-apirak , Natee Thongchan, Nattisa Photueng/Agriculture and Food Cluster
Representatives from Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) Thailand Office recently organised a workshop on a topic of agricultural climate-resillient financing.
Held during 12-14 March 2024 in Nakhon Ratchasima, the ‘BAAC – GIZ Strategic Alignment Planning Workshop’ marked the continued joint effort between the two organisations to provide Thai smallholder farmers access to sustainable, climate-resilient farming management.
BAAC and GIZ signed MOU agreement in March 2023. The agreement focuses on capacity building and preparedness and implementation of green agricultural finance, sustainable finance mechanisms and operations. To address the impact of climate change on Thailand’s agricultural sector, particularly rice farming, collaboration between the two organisations currently focused on the following five agricultural development projects:
- Thai Rice Nationally Appropriate Mitigation Action (Thai Rice NAMA),
- Thai Rice: Strengthening Climate-Smart Rice Farming (Thai Rice GCF),
- Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region (AgriCRF),
- Inclusive Sustainable Rice Landscapes Transforming Thai Rice Value Chain for Environmental Sustainability (ISRL), and
- Thai – German Cooperation on Energy, Mobility and Climate (Biomass Component).
The three-day workshop not only focused on exchanging views and opinions between financing and development framework and concept, but also activity planning of on-going collaborative projects. BAAC strategies and priorities as “sustainable rural development bank” were also highlighted.
Mr Wichai Paksa, BAAC Director of Office of Foreign Affairs said, “Although we have jointly implemented project activities for some time, today’s workshop set the first important strategic milestone for our continued exchange in the future and to support Thai farmers for better incomes.”
The BAAC executive further explained the prioritised BAAC agenda for 2024/25 emphasising on addressing poverty issues facing majority farmers, promoting the use of technology and innovation to enhance competitiveness while supporting community-based economic activities by providing knowledge and financial resources, with consideration for balanced values in the economic, social, and environmental aspects. The aim is to increase income among farmers households.
Mr Tobias Breunig, Advisor to Agricultural Finance, GIZ, shared a similar thought on an impact of climate change on agricultural sector and its threat to farming patterns and livelihoods of Thai farmers. “GIZ and BAAC can work together on the climate resilience and sustainable finance to help improving livelihoods and incomes for smallholder farmers,” he said.
A dozen of BAAC and GIZ representatives from various departments, including Policy and Strategy, Personal Credit, Customer and Community Development, Office of Public Relations, Institution and Entrepreneur Credit Department, Office of Institution and Community Organizations Development, Office of Foreign Affairs, and Research and Innovation Development Center actively shared views on how climate change can also lead to BAAC risk as banking institute. Lessons learned from the Thai Rice NAMA Project implemented by GIZ during 2018-2023 in six central plains provinces regarded as the country’s rice bowl were also presented to showcase how socioeconomic challenges facing agricultural sector can become a key factor to implement an upcoming Thai Rice GCF project, also focusing on financial incentives and mechanism for climate smart agriculture.
Representatives from the two organisations also brainstormed how capacity development activities on climate change and climate resilience financing should be carried out at all levels, from farmers to financial institution. How innovative solutions can enable BAAC as financial institution to effectively assess credit risks from climate impacts; and potential roles BAAC as an agricultural bank could take were also discussed during the workshop. For instance, ‘Environmental Social and Governance (ESG) Risk Radar tool was presented. The tool would support BAAC in assessing ESG risks and impacts (climate risks included) on its loan portfolios.
The workshop was concluded with constructive contribution. Representatives from both BAAC and GIZ agreed with a framework of collaboration and activity implementation of the coming years. Mr Wichai said during the workshop closing: “This is the first planning workshop we had together, and we hope this can be continued so that we can keep our exchange and learning momentum for both orgnisations for the benefits of Thai farmers.” ■
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