Stakeholders in Thailand’s agricultural sector have prompted governmental action to facilitate farmers’ transition to agroecological practices by improving their access to knowledge, technology and finance.
The solutions were highlighted as over 40 representatives from governmental offices, public and private banking institutions, international standards agencies and associations of agricultural commodities producers recently gathered at a workshop to refine the study on ‘Agricultural Standards for Integration with Climate Risk Financing Instruments to Enhance Climate Resilience of Smallholder Farmers in Thailand’.
Organised by the ‘Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region’ (AgriCRF) project, the aim of the workshop was to provide a platform for all related policymaking stakeholders to explore ways to integrate climate risk financing instruments and sustainability standards into existing mechanisms, which will eventually enhance smallholder farmers’ capacities to cope with hard-to-predict climate change impacts.
Department of Agriculture (DOA) Deputy Director-General Piyanuch Thipayawat gave the opening remarks: “If our farmers can access agricultural standards and improve farming practices, it will enhance consumers’ trust in our agricultural commodities and eventually our capacity and competitiveness in both domestic and international markets.” Driven by consumers and international markets, different certification standards are optional yet increasingly crucial for Thai agricultural produce to ensure that each agricultural commodity is sustainably sourced, for example, the Sustainable Rice Platform (SRP) for rice, Bonsucro for sugarcane, European Union Deforestation Regulation (EUDR) for rubber and Roundtable for Sustainable Palm Oil (RSPO) for oil palm and palm oil production. Capacity building among farmers and all players in the supply chain is needed to boost production standards and market competitiveness.
Green finance can bolster Thailand’s transition to net zero
Apart from the annual crop insurance system for specific commodities, green financing could also play an important role in preparing or improving farmers’ access to agricultural standards, providing extra protection on top of crop insurance and complementing other financial services that could bolster the Thai agricultural sector’s transition to net zero, she said.
Poomlert Lertworawit, Assistant Senior Vice President of Personal Credit Department at Bank of Agriculture and Agricultural Cooperatives (BAAC), said the bank’s policy was aligned with ‘Thailand Taxonomy’, regarded as a tool that would enable financial institutions to better assess the environmental status of their clients, allowing them to offer appropriate financial products. Currently, BAAC offers special interest rates, subsidised insurance and minimal requirements for loan applications so clients who are smallholder farmers can access a green loan.
A climate change loan is one of the examples that showcases BAAC’s progress. As the majority of its clients are rice farmers, the bank works with the Rice Department (RD), DOA and Department of Agricultural Extension (DOAE) to equip arming households with climate-smart technologies as well as practical energy and pesticide reduction so they can access rice certification standards such as Good Agricultural Practice (GAP), low-carbon rice and the Sustainable Rice Platform (SRP). The bank’s retailing partner also provided market linkage for farmers who were clients in 15 pilot provinces to sell their low-carbon rice products to consumers.
In addition, a smart-tech loan programme offering low interest rates for farmers to invest in machines such as drones and the Internet of Things (for boosting agricultural productivity) would also be available.
Forest Credit is the bank’s green loan programme aimed at supporting farmers and communities to sustainably manage forests, promote reforestation and develop eco-friendly agricultural practices. It works through financial assistance for sustainable forestry projects, with specific phases targeting different groups like farmers, juristic persons and community enterprises.
Upscaling agricultural commodities standards
Sugar production remains a significant agricultural processing industry in Thailand, closely linked to upstream farmers. Being the world’s second largest sugar exporter after Brazil, the primary export markets are Indonesia, Cambodia and South Korea. Indonesia, the United States and China are the top three importing countries. Over the past few years, the sugar industry has faced significant challenges due to climate change.
Namfon Unthapanya, Bonsucro’s Senior Coordinator Asia, said the organisation’s certification team had been working with the sugarcane industry in Thailand to achieve internationally recognised certificates to demonstrate commitment to environmental and social sustainability.
The Bonsucro Impact Fund is available to support projects in the sugarcane sector to drive sustainability for industrial members in Thailand to focus on human rights, decent work and environmental impact – which directly applies to sustainable sugarcane production.
Patcharat Saralamp, Quality and Sustainability Manager of Nakhonpetch Sugar Ltd., said the company is in the process of upscaling its standards from Fairtrade to Bonsucro-certified by building the capacity of sugarcane smallholders on climate-resilience, and providing financial incentives to put into practice sustainable sugarcane production measures, e.g. the prohibition of post-harvest waste to reduce greenhouse gas emissions.
Wichulada Yungyuen, Standards Officer at the National Bureau of Agricultural Commodity and Food Standards, said the agency was in the process of training assessors and evaluators to ensure that the national standardisation system would be ready to support the agricultural supply chain by the end of 2026. ■Related Articles
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