CHAPTER 5 Sectoral Innovation Systems of Thailand · organizations (RTOs) and private sector...

CONCEPTUALISING INNOVATION SYSTEMS: CAN DEVELOPING ECONOMIES LEARN FROM DEVELOPED WORLD?

CHAPTER 5

Sectoral Innovation Systems of Thailand: The Making of Agro-Biotechnology Innovation System

1. Introduction:

In previous chapters, the illustration of Thai economy was reflected through its public

policy and planning development under economic and social development ambitions

in over last four decades, including understanding of Thai national innovation system

by evaluation of present status, roles, main activities and interactive linkages of three

key players. These analytical exercises underlined the complexity and stages of

innovation system development in Thailand. The foundation of national production

system attached to the influencing policy maneuvers by government is illustrated

through the application of generic innovation system studies approach. The weakened

and fragmented innovation system in less successful economy like Thailand is

partially reflected through the applications of manufacturing and R&D survey data

sets based on Oslo Manual and Franscati Manual disciplines.

A sectoral innovation system is composed by the set of heterogeneous agents carrying

out market and non-market interactions for the generation, adoption and use of (new

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and established) technologies and for the creation, production and use of (new and

established) products that pertain to a sector (“sectoral product”) (Malerba, 2002b).

Most of SIS studies have focused on specialized supplier and science based sectors;

such as telecommunication equipment and services, software, biotechnology and

pharmaceuticals, petrochemicals, and complex production of machine tools,

electronics and automation (See McKelvey and Osenigo, 2001, on pharmaceutical

sector; Mansell and Steinmuller, 2000, on telecommunication sector, Pavitt, 2003, for

system integration). These new wave and knowledge intensive sectors become the

focuses under the analogy that there will be the next European innovative,

competitiveness and growth sectors.

The pictures are also similar among those European and some leading Asian

economies, but the picture in less successful economies in Asia and the rest of the

world show different stories. Instead of focusing only on state of the art knowledge

and technological domain and learning process in the mid- and post- industrialized

activities of various sectors above, the dimension of level of development, absorptive

capability and structural transformation through sustaining its society and resources

in which slightly different from conventional industrialization approaches are needed

to be addressed in less successful developing economies context.

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Also, sectoral systems are dynamic and transforming. Change and transformation may

occur in the technological and learning regimes and in the patterns of innovations.

New actors and institutions may emerge, or existing actors and networks may

radically change (Malerba, 2002a). The application of SIS in traditional agriculture

sector in developing economies will test the above concept and of how different

actors learn, interact and produce such different knowledge and innovation.

Agriculture always associates with poverty and less developed issues. In this chapter,

we try to articulate this perspective addressing the issues of sectoral innovation

system as new projection to an understanding of evolution of developing economies’

innovation system, which link to our agriculture sector characterized by six areas of

interesting issues relevant to innovation studies: an alternative contribution of

traditional sector to developing economies and innovation systems can be seen from

the role of the sector in fighting poverty, the key and very complex issues for

international trade negation, technological changes within the sector which reflected

wider gap among rich and poor nations and at the same time the emerging infectious

diseases, environmental protection and sustainable development, convergence of

traditional agriculture to more complex and knowledge intensive levels and sectors,

including the contribution to understanding of innovation system in development

and sociological contexts.

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Thailand is one of few economies that enjoy surplus of agricultural products and food

security, while the manufacturing and services are developing toward international

competitiveness regimes. An understanding of traditional sector through the concept

of innovation system is considered new and under-studied. Thailand, toward the

convergence of the traditional sector into more knowledge intensive area, is creating

new value for her existing agricultural diversity by merging this traditional sector

with the utilization of biotechnology application, the phenomena of different kinds of

technological catching-up for the developing economies. Consequently, this chapter

is organized as follows: it begins with the historical background on the relationships

between agriculture and Thai society, including the contribution of agriculture to

Thai economic development, following by an illustration of characteristics on the key

actors: the monarch, government, university and research and technology

organizations (RTOs) and private sector (private enterprise & farmers).

Then, we will describe the linkages, learning, interaction, success and failure, and

capabilities from the sectoral evolution. The development of technology policy for

agriculture and utilization of biotechnology will be highlighted, particularly on their

impact to agricultural sector, and then, description of the design and construction of

Thailand Agro-Biotechnology Innovation System architecture will be discussed.

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2. Thailand & Agriculture

For more than half of countries in the world, rice represents life. Over the centuries,

rice has shaped the landscape, culture and character of the Asian people. Similar with

many economies in developing world, social and economic structure of Thailand

based on agriculture. 1 Thailand is an agrarian society with the majority of its

population belongs to the agricultural sector (See table 5.1). The country, once, claim

itself as Newly Agro-Industrialising Country (NABIC), stems a deep root of diversify

agricultural society in which full of variety of non-agricultural activities around

national centre of power at the heart Bangkok Metropolitan along Chao Phraya Basin

and Eastern coast of Gulf of Thailand.

Table 5.1: Share of Agriculture in the Thai economy (1976-2001)

Year GDP (%)

GDP (mil. Baht*)

Agriculture Labour force

(%)

Average income:

Agriculture (Baht/year)

Average income: all

workers (Baht/year)

1976* 30.0 97,135 70 3,450 7,580 1985 15.8 167,026 - 12,739 21,662 1990 12.7 279,268 - 13,564 29,560

1997*** 9.34 3,072,615 45.14 - 51,360 2001 10.15 3,776,160 56.00 32,120**** 79,100

Source: Thailand Economic Information Kit. Thailand Development Research Institute, September 1995. ; *1976 figure from The Fourth National Economic and Social Development Plan, NESDB; **Approximately 25 baht = USD1; ***Approximately 40 baht = USD1, ****Office of Agricultural Economics

1 Origins of identity, social and economic structures of the country are rooted from the result of Buddhism practices through rice culture. The various rituals of rice are closely related to both the communal way of life and religious beliefs.

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2.1 Agriculture, Society and Industrialisation

Industrialisation in Thailand started over four decades ago. From a country that relied

on agriculture and primary products for export to an agro-industry and industrialising

country, the government has tried to pursue the success of many ASIAN NIEs and

Japan. Particularly, Thailand has rich natural resources and a strong agricultural base.

These make agro-industry, manufacturing and services grow simultaneously.

Economic growth and industrialization have caused many changes in farming

practices and conditions (Sriwatanapongse, 1997). Most significant has been the shift

from subsistence farming to farming that is geared towards the commercial market,

which has encouraged the production of cash crops and rice for export. This

fundamental shift affects the very core of the traditional Thai way of life, following

with it many positive and negative changes.

On example of how such indicators in table 5.1 can tell us something about

agriculture in society is the increase in the per capita income. The per capita income

increased from 7,580 Baht per year (about US$300) in 1976 to 21,662 Baht in 1986 to

79,100 Baht (about US$2,000) in 2001. This is a successful improvement in the

standard of living in general. However, a large portion of Thai population is still

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relatively poor and there is a wide gap between the rich and poor. The poorest are

those working in the agricultural sector whose average income is twice below the

national average (See Table 5.1).

Such indicators point to the decreasing importance of the agricultural sector as a main

generator of income for the Thai economy. Agricultural products decreased from 30%

of the GDP in the mid 1970s to less than 10% in 1997, contrasting to the prosper time

in 1967 that agricultural exports accounted for 90% of all foreign earnings. However,

the percentage of the labour force in the agricultural sector has not decreased at

corresponding rates, and remains at around almost half of all labour forces in the

country.2 Many Thai returned to traditional sector after the country faced with the

financial crisis in 1997. The number of economically active population in agriculture

had been increased and reached 56% in 2001.

In spite of quantitative figures, increasingly there exists a labour shortage of skilled

agricultural workers, especially during harvest periods and specific activities; such as

rubber collector, fishery, and farming in some areas. Unskilled labour from

neighbouring countries has been increasing over the last decade and become

important factor for many SMEs and agriculture.

2 In 2001, around 44% of the world population is in agriculture sector. Africa and Asia have highest share of economically active population in agriculture comparing with others continents. Sixty two percent of African and sixty percent of Asian live and work in agricultural sector (SOFA report, 2003).

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All these facts combined paint a picture of agriculture in Thailand in a state of

declining, and inconsistent with other sectors in Thailand economic restructuring

platform, which it would finally reach uneven development stage.

2.2 Agricultural Production, Trade and Competition

Here, we have mixed between sectoral dimension and cultural dimension into a brief

description of Thai agriculture business. On the one hand, it represents sectoral

evolution in general and at the same time reflects national and geographic identities

of sector. The general perception of among foreign-eyes toward Thai image can be

seen from the reputation of its exotic cuisine, fresh tropical fruits and vegetables, and

beautiful sceneries ranges from beaches to mountains. In fact, the origin of Thai

identity is alike most countries in Asia, rice is the staple food of Thailand and very

much a part of Thai culture and history. Today Thailand is one of the important

advanced agricultural and agro-food producer with a wide variety of agricultural

exports.

After the financial crisis in 1997, Thailand’s agricultural exports jumped almost 30

percent in 2002, to $6.67 billion, helping its economy grow 6.5 percent. Consumption

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in Thailand’s farming communities is rising so fast that the surge in commodity prices

may be a bigger factor in the nation's consumer-led recovery than the government’s

combination of fiscal stimulus and low interest rates, "a large part of rising incomes

(in Thailand after crisis) is because of favorable terms of trade in the commodity

sector”.3

Thailand has wide variety of agricultural products. Major agricultural products of

Thailand are not mainly on cereal crops such rice, maize but also include for many

others food and agricultural industrial crops which diverse from annual such as soy

bean, cassava to perennial and three crops such fruit tree, rubber, oil palms, and

medicinal plant crops. Given the considerable variety of its agricultural produce,

minimal import content and high competitive advantage, the Thai Government has

launched the campaign for Thailand to be the “Kitchen of the World”, and the

government regards the Thai food industry as a national strategic industrial sector.

Two of the dimensions in which sectors differ are products and the related basic

technologies (Malerba, 2002a). Table 5.2 shows 10 selected strategic agricultural

products of Thailand and their major customers and competitors. There are rice,

cassava, pine apple, rubber, sugarcane, palm oil, longan, shrimp, chicken, and orchid.

3 Sailesh K. Jha, an economist at DBS Bank of Singapore (an interview with)

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4 Tidd, Bessant, and Pavitt (1997) ‘Managing Innovation: Integrating technological, market and organizational change” 1st edition p. 243. (See Appendix B for detailed)

These ten strategic crops share different nature, market and characteristics. These

product champions share around half of export value from agriculture sector (Office

of Agricultural Economies). By applying Tidd, Bessant and Pavitt’s Market and

Technology Segmentation 4 to the selected agricultural products, we can be

categorised them into 4 groups: cash crop (Differentiated) group, semi-

monopoly/value-added (technological) group, niches (architectural) group and Energy

security (complex) group (See Figure 5.1).


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Table 5.2: Trade and Competition of Thailand Selected Agricultural Products (2003-2005) World Trade/Market Share (million tons/percentage)

Agricultural Products

2003 2004 2005 Main Importers Main Competitors

1. Rice 27.55/26.68 25.73/38.83 25.93/32.78

Hong Kong, China, Malaysia, USA, Canada, Iran, Iraq, Saudi Arabia, Ghana, Indonesia, the Netherlands, Spain, South Africa, Senegal, Singapore, Nigeria and Cameroon

USA, Australia, Vietnam, China, Pakistan, Myanmar, and India

2. Cassava 6.06/87.13 7.40/89.60 5.50/85.45 European Union (pallets and chips), Japan, Taiwan and China (starch & modified starch)

Nigeria, Brazil. Vietnam and Indonesia

3. Pine Apple 1.15/41.74 1.1.8/38.14 1.22/37.70 USA, European Union, Japan (Canned), the Netherlands, USA and Spain (Juice)

The Philippines, Indonesia and China

4. Rubber 5.69/45.23 6.24/42.11 6.30/43.65 Japan, China, USA (Smoked), Malaysia (Latex), China, Japan, USA and South Korea (Pallets)

Indonesia, Malaysia, Vietnam

5. Oil Palm 19.68/1.12 21.190/1.23 23.02/0.91 Malaysia, China, Myanmar Malaysia, Indonesia

6. Longan 0.364/80.00 0.455/80.00 0.569/80.00 China, Indonesia, Hong Kong, Singapore, Malaysia, USA, France

Vietnam, China

7. Shrimp 1.34/12.00 1.54/15.60 1.56/16.00

USA, Japan, Canada, Singapore, South Korea, and Australia (Frozen) USA, South Korea, Japan, Canada, Australia (Processed)

China, Vietnam, Indonesia, India, Ecaudor

8. Chicken 6.07/7.14 5.80/3.47 6.225/4.02 Japan, European Union, South Korea Brazil, China and USA

9. Orchid* 5.92/39.99 6.84/36.25 7.92/34.76 USA, Japan, Italy (Cut flower) Japan, Korea, USA (plants)

Malaysia, Singapore Taiwan

10. Sugarcane 46.3/11.50 45.70/10.70 46.00/7.80 Indonesia, Malaysia, China, Japan, and Cambodia Australia, Brazil, South Africa,

Guatemala Unit = million Baht

Source: Agricultural Economics Office, FAO and World Trade Atlas


A. Cash Crop Group: Sugarcane, orchids and pineapple are cash crops. Sugarcane is

one of quota listed product at WTO, as Thailand is the leading world food exporter,

high demand of sugarcane and sugarcane products generate as high as 20 billion baths

(approximately around US$500 million/per annum) for Thailand each years, and

ranked as the second world largest exporter after Brazil. 5 In addition to a high

demand on sugarcane, however, due to high production cost, the export margin of the

products still low compared to the main competitors.

Thailand is the largest producer of pineapple juice and canned with 40% of the world

market. The national goal is to maintain the leader status in the long run by focusing

on cultivar development and development of Thai pineapple brand to the

international market.

Thai orchids are among one of the most popular orchids varieties worldwide and

Thailand has been known as the world’s largest producer of cut-flower orchids.6 The

most popular variety grown is Dendrobium spp., wich comprises approximately 50

cultivars. The revenue generated from cut-flower orchids is as high as 1 billion baht

per annual with a gradual increase each year (Office of Agricultural Economics).

5 They are exported in the form of raw sugar, refined sugar, molasses, and processed products industrial sugar, molasses, and processed products. There are 6 million rai of sugarcane cultivated area in the central, northern, and northeastern regions of the kingdom. 6 There are around 12,000 rai of orchid plantations in Thailand which is mainly located in and around the vicinity of Bangkok and Chiang Mai Major export markets are Japan and Europe.

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Technology such as tissue culture technique and biotechnology will become very

important factor to leverage production standards for the expansion of the markets in

the near future.

Quality improvement and production cost are the main competitive areas to be

improved. There have no new technology introduced so far, most of activities are to

meet an established customer demand by focusing on post-harvest technology,

packaging, and pricing. According to high proportion of market share and unique

quality of products, there is no urgency incentive or pressure to develop new

technology or change any business model for these cash crops.

B. Niches Group: Longan is niches crop. Wild longan trees have never been found in

Thailand. Old documents about Sino-Thai trade in ancient times referred to dried

longan as one item imported from China into this country. Major production areas are

in Chiang Mai and Lampoon, and other upper northern part of Thailand. There are

not so many countries capable to export a big chunk of longan like Thailand. The

country enjoys 80% of world longan export. Major market is Mainland China. The

Chinese people perceive the fruit as “Fruit of Dragon Eyes” and regard its juice as an

elixir. Longan has been received long criticism as political subsidiary scam for many

administrations. Over productivity of longan creates chance of corruption for decades.

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One solution to eliminate the scandal is to expand market to other countries such as

Australia and India (Office of Agricultural Economics) or serve customer demands.

C. Energy Security Group: Oil Palm is one of the major naturally occurring oil

resources and has recently attracted considerable public interests as an alternative

source for green energy. In general, palm oil is used for production of cooking oil,

margarine, shortening, steel and metal coating and soap industry. Although it is

considered as Thailand new generation of economic crop, the current productivity is

still far behind that of the world largest oil palm producers in Indonesia and

Malaysia.7

The crop becomes national agenda for reducing energy deficit by promotion of oil

palm growing and production of palm oil as bio-diesel. Currently, oil palm is

cultivated in a small area in the southern part of Thailand. Current problems of oil

palm growing business includes high cost of investment, low oil yield due to a lack of

research on cultivar improvement, and not enough rainfall. Both technologies and

markets of converted consuming palm oil into bio-diesel are very new in Thailand.

There is still in the early stage of development of this new energy crop.

7 Thailand produced 4 million tons of oil palm fruit in 2001, while the production of palm oil in Thailand is less than those in Indonesia and Malaysia for at least 10 to 15 times.

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D. Semi-Monopoly/Value Added Group: There are natural rubber, rice, cassava,

chicken and shrimp. Thailand is the world largest producer and exporter of natural

rubber, rice, cassava, and shrimp while ranking as the fifth world largest exporter of

chicken meat. The group share around 40% of contribution from agriculture sector to

GDP. Few large agricultural trading and production companies and government

dominates the value chain. To secure the champion position, novel technologies have

been developed in key strategic crops to satisfy customer needs and increase

productivity to crate higher returns for farmers and distributors. Moreover, Bangkok

has been recognized as the world referencing price market for rice.

In this chapter, we will focus three from ten commodities. There is rice, cassava and

shrimp or “Khao Mun Khung” (in Thai). The three strategic crops have long been

received priority attention on technological development and market development as

it involve majority of Thai people source of income and the country enjoy the

competitive advantage in the world market.

Rice: Rice is the main source of nutrition for Thai people and of economic wealth of

the country.8 Thailand specializes in a variety of the grain that is highly prized among

Asia's rice-consuming populations - jasmine rice. Jasmine rice is more fragrant than

8 The average per capita consuming rate is approximately 165 kg paddy or 109 kg milled rice per year. There are 63 million rai of rice cultivated area producing approximately 22 million tons of rice (Office of Agricultural Economics)

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ordinary rice and commands roughly twice the price. So far no other country has

been able to produce it in significant quantities, according to the International Rice

Research Institute in Manila.9

Cassava: Cassava became the most widespread of all the uplands crops in Thailand

since the late 1960s (Pasuk and Baker, 1997). Around 80% of market share for

processed cassava belongs to Thailand. This makes the country becomes the world top

cassava producer ahead Nigeria and Brazil.10 The largest cultivated area is in the North

eastern part of Thailand. Thailand production of cassava in 2001 was 18.4 million

tons, while Indonesia productivity was around 17 million tons (FAO Database, as of

30 May 2003).

Shrimp: Thailand production of shrimp farming is ranked number two in the world

market, while ranking as the world largest shrimp exporter. Most of the exported

shrimps are in the forms of frozen and processing products. Key development issues

for shrimp innovation in Thailand are to develop process of farm management,

9 Thailand sale over 7 million tons of rice in 2001 with average yield of 420 kg per rai (1 ha = 6.25 rai) 10 Cassava is important for human consumption worldwide, especially for countries in Africa, Latin America and some part of Asia. About two-third of the production capacity is used for human consumption where as the rest is used for animal feeds and industry. Cassava roots and tapioca starch are major forms used for human diets. Chips and Pallets are exported for animal feed in Europe. Monosodium Glutamate and lysine, glucose, dextrose, sorbital as much as biodegradable plastics and other biopolymers basic substances is cassava. Modified starch is an important raw material for several applications such as textile, cosmetics adhesives, food and beverages industries.

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product development by increase value added through technological applications and

brand building.

2.3 Distribution of Resources and Management

In general, the key issues for agricultural and agro-industrial products from Thailand

can be categorized into 5 areas (Tarawanich, 1998, in Thai language). Firstly, there

has been the high proportion of imported capital goods in agricultural processing

activities and industries (particularly for frozen sea products, raw material for animal

feeds, dairy products, woods, including related chemical products and machineries).

The annual growth of imported capital has continuously increased around 10% since

the late 1980s (Kasikorn Research Centre, 1999, in Thai language). The others are the

requirement of product standardization to ensure Thai agricultural product quality

and reduce informal trade barrier from international importers, the reduction of

fluctuations of market price for agricultural products, public policy (particularly on

price structure and control, land reform, farmer debt management, quota and sectoral

development), and high demands on qualify human resources.

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3. Characteristics of Agro-Innovation System in Thailand

3.1 Key Actors of Thai Agro-Innovation System

By following Freeman functional-based innovation system approaches, Thailand

shares similar key actors with the others. Thailand illustrates different set of key

actors of SIS. By applying developed SIP mechanism, the differences among actors in

Thai agricultural sector are in the influencing agents and producing agents.

The agricultural evolution in Thailand is totally different from its history of

industrialization and production firms. The transformation is heavily attached to the

cultural roots and political economy of social classes. The uniqueness among the key

actors in Thai AIS lies on the influencing role of His Majesty the King toward the

contribution of agricultural development in conjuncture with people capacity

building in rural area, while political party and non-government organisation (NGOs)

play tremendously manipulating role in political economy of agricultural system

through the election process and lobbying.

Another different key player in the Thai SIS is the role of ordinary farmers or

peasants which share opposite nature with private enterprises in the conventional

agri-business in both developed and developing economies. Consequently, there are

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six key actors in Thai SIS, the monarch, the government, the political party, the

knowledge creator (university and research and technology organisations, RTO’s) and

firms.

3.1.1 Supporting Agents

3.1.1.1 Government

In the early day of national economic and social development plan, agriculture was

emphasized with a view to meeting both domestic and export needs. Within the

agricultural sector, an increased use of modern production technologies, in the form

of chemical fertilizers, pesticides, and small farm machinery, was pursued. Replicating

or buying appropriate technology was not considered. Most of these, however, were

imported. In agriculture, though foreign technologies had some influence, the

majority of farmers still used indigenous technologies (Chamarik, 1994).

As early as the sixteenth century, the export of agricultural commodities was the

result of foreign influences, which changed the economic and production structures

of the country. But this extensive growth resulted in a great loss of forest resources.

The increased demands of the external market expanded the area under cultivation.

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During the 15-year period 1966-1980, rice output increased by 19 per cent, but the

area under rice cultivation increased by 47 per cent. Similarly, during the six-year

period 1974-1979, the gross amount of maize produced increased by 50 per cent,

while the cultivated area increased by 61 per cent (Ministry of Agriculture and Co-

operative, MAoC). However, the output of agricultural products increased

satisfactorily as a result of extensive cultivation. Although agricultural production

increased tremendously, it did not keep pace with the increased production costs.

One should be noted that in 1985 the majority of the population was still living in

rural areas; the increase in production in the country occurred essentially through the

exploitation of traditional technologies.

Although production rose the problem of the high cost of production was not

addressed and farmers suffered. This undesirable trend occurred at a time when the

government was promoting the extensive use of modern production technologies,

such as chemical fertilizers, pesticides, improved seed varieties, and improved

techniques. The more the government emphasized the use of such technologies, the

higher the cost of production became for the farmers. The policy for agricultural

development had been remained the same as in the preceding Plan before 2001.

Experience with the Plan indicates that the poor structure of S&T development had

not been sufficiently remedied.

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The key agricultural policy deploying ministries in Thailand has been considered as

Grade A organizations. Among the powerful and important politicians or renown

academics would be selected to mastermind the administration. There are ministry of

agriculture, ministry of commerce, ministry of industry and ministry of finance. The

economic crisis in 1997 which brought a significant effect to the economy of the

government, stringent measures were undertaken on the use of the budget resulting

to the discontinuance of the various projects, has accelerated the restructuring process

within the public sector through the external pressure from the international

organizations such as the World Bank and the Asian Development Bank (ADB) and

has been affected agriculture sector transformation.

3.1.1.2 University and Research and Technology Organisations (RTOs)

In contrast with engineering and other scientific education, agriculture education in

Thailand has long history of development. The higher education for agricultural and

related science in Thailand started in 1904. Kasetsart University (University of

Agriculture in Thai translation) and Majoe University in Chiang Mai are among the

eldest and most respected universities with expertise in agriculture (See appendix C).

Later in the mid 1960s, an expansion of agriculture education has been increased

throughout the country and most of university and vocational institutes in Thailand

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provide an education from certificate to post doctoral degrees. Agricultural research,

medical technology and biotechnology are considered as among the strongest

research fields in Thailand (See Table 5.3)

Ministry of Agriculture and Cooperatives (MAoC) is among the eldest public sector

establishments in Thai administrative history that trace back to the Ayuthaya period

in 14 century.11 With extensive agricultural research and development stations and

agricultural technology transfer units throughout the country under department of

agriculture, from agricultural value chain administration structure which

concentrates on conventional pre- to post harvest activities, in 2003, the MAoC

established two new knowledge intensive activity based organizations from the

impact of financial crisis. There are Agricultural Research Development Agency

(ARDA) and Laboratory Centre for Food and Agricultural Products Company Limited

(LCFA).

11 The origin of MAoC begins when the Department of Na in Ayutthaya Period was established. It was responsible for agricultural activities (since established in 1350). It was a part of Ayutthaya's unique administration system called "Chatusadom". The system consisted of four departments - Maung, Wang, Khlang and Na. The contemporary MAoC, according to the extension of the coup announcement No. 216 dated September 29, 1972, the responsibilities of the Ministry of Agriculture and Cooperatives covers agricultural affairs, agricultural economics, agricultural land reform, irrigation, fisheries, livestock, forestry, land development, and cooperatives. The Ministry of Agriculture and Cooperatives consists of 13 department and offices which are: Office of Secretary to the Minister, Office of Permanent Secretary, The Royal Irrigation Department, Department of Cooperative Auditing, Department of Fishery, Department of Livestock, Department of Forestry, Land Development Department, Department of Agriculture, Department of Agriculture Extension, Cooperative Promotion Department, Agriculture Land Reform Office, and Office of Agricultural Economics.

The Ministry of Agriculture and Cooperatives is also responsible for 7 state enterprises attached to it which are: The Forestry Industry Organization (Now it is relocated to Ministry of Natural Resources), Rubber Estate Organization, Rubber Estate Welfare Fund Office, Fish Marketing Organization, Marketing Organization for Farmers, Dairy Farming Promotion Organization of Thailand, and Thai Plywood Co., Ltd.


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Table 5.3: Top Ten Primary Fields Publications in Thailand (1995-2003)

Citations International Co-Publications Publications Institutions Amount Institutions Amount Institution Amount

1. Clinical Medicine 18,043 1. Clinical Medicine 2,596 1. Clinical Medicine 3,715 2. Immunology 6,524 2. Microbiology 1,044 2. Chemistry 1,372 3. Microbiology 6,186 3. Immunology 872 3. Engineering 1,334 4. Chemistry 3,031 4. Chemistry 807 4. Microbiology 1,207 5. Animal Science 2,724 5. Engineering 706 5. Immunology 1,116 6. Pharmacology & Toxicology 2,470 6. Animal Science 623 6. Animal Science 843 7. Biology & Biochemistry 2,457 7. Agricultural Sciences 615 7. Agricultural Sciences 802 8. Plant Science 1,733 8. Physics 463 8. Pharmacology & Toxicology 722 9. Agricultural Sciences 1,625 9. Biology & Biochemistry 483 9. Biology & Biochemistry 707 10. Engineering 1,615 10. Pharmacology & Toxicology 467 10. Physics 597 Source: Ministry of Education,


The Agricultural Research Development Agency (Public Organization) or ARDA was

established to serve as an autonomous agency for the management of the investment

funds for agricultural and related areas following the Royal Decree on the

Establishment of ADRA (with starting capital of 3,000 Million Baht).12 Laboratory

Center for Food and Agricultural Co., Ltd. (“LCFA”) was established for the purpose

of centralized laboratory facilities service and export reference lab service and

information support for agricultural & food product exporter. LCFA operates as

private company under direct supervision of the Ministry of Agriculture and

Cooperatives and signed MOU with Department of Livestock Development,

Department of Fisheries and Department of Agriculture to provide lab services,

complement and cooperate with competent authorities to issue “Health Certificate”

under “One Stop Service” concept.13

As key supporting organization for Grade A ministry, Ministry of Science and

Technology, on 22 November 1991 Thai Parliament approved a laws to set up the

"National Science and Technology Development Agency" to develop and disseminate

12 The government at that time has made a resolution that budget has to be sought from the foreign countries to continue the implementations of the agricultural projects. The Cabinet Ministers has issued a resolution on 6 July 1999, base on the Commitment on Policy Matrix, regarding loaned projects to re-structure the agricultural sector ASPL:ADB/OECF (Asia Development Bank/ Oversea Economic Co-Operation Fund) related to the building the competitive capacity for export. 13 In addition, LCFA also signs an MOU with Central Sciences Lab (UK), a central lab of the UK government for information and staff exchange and project work.

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science and technology to support and promote competence of the Kingdom's

production and service. There are 3 national centres in the agency namely National

Centre for Genetic Engineering and Biotechnology (BIOTEC) National Electronic and

Computer Technology Centre, and National Metal and Material Technology Centre.

The BIOTEC plays roles in funding about 200 high level research projects relating to

plant, animal and human biotechnology. So far there are only 2 projects that

developed up to an implementing stage, both of them are plant biotechnology related.

Thailand is an agricultural society and research to improve the agriculture always has

a priority at BIOTEC. Fore example, the past concentration of agricultural researches

have been in

1. Production of papaya seedlings resistant to papaya ring spot virus using a

mild strain cross protection technique. Millions of seedlings are produced for

the growers each year.

2. Control of plant diseases using biotechnologically selected Trichoderma

harzianum fungus. In fact, there are a number of biotech companies in

Thailand doing trading in bio-control products of plant pests and diseases,

especially for fruit orchards.

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The biotechnological research areas which gain support from funding agencies are

plant and plant products, animal and animal products, rural development and small

farmers, sustainable development, health related projects, and novel products/

industrial process improvement. Table 5.4 shows the budget allocation for research

and development in public sector. More than half of research budget are allocated to

MOST and MAoC, with around 30% goes directly to agriculture. This reflects the

important of the sector to Thai economy in the sense that the sector is “back bone of

nation”

Table 5.4: Budget Allocations for R&D in Thai Public Sector (1997-2000) Unit: million Baht

Organisations 1997 1998 1999 2000 Office of the Prime Minister 300 100 400 850 Ministry of Defence 85.6 27.2 13.1 18.0 Ministry of Agriculture and Cooperatives 3,175 2,690 2,914 2,886 Ministry of Education 309 7.9 88.5 130 Ministry of Public Health 159 63 231 255 Ministry of Industry 106 36 77 70 Ministry of Science, Technology and Environment 3,150 3.066 3,642 3,140 Ministry of University Affairs 2,026 1,475 970 1,146 Public Enterprises 144 136 96 140 Total R&D Budget 9,458 7,602 8,433 8,637 Share of Total National Budget 1.0% 0.95% 1.02% 1.0%

Source: National Budget Bureau and Central Auditing Office

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3.1.2 Influencing Agents

3.1.2.1 The Monarch

King Bhumibhol Adulyadej is an extraordinary figure in Thailand14. Apart from being

the longest reigning member of the Chakri dynasty, he has earned not simply the love

of his people but their profound respect. For more than four decades, the King’s

efforts to develop his nation have brought results that are palpable to any visitor,

especially in the fields of agriculture and rural development. For example, he has

visited every province of his country, like no monarch before him. And everywhere,

he has suggested where roads could be built, helped create livelihoods, and seen the

benefits of water and electricity brought to people whose lives are transformed as a

result.

14 Kin Rama IX was born on Monday the 5th of December 1927, at Mount Auburn Hospital, in Cambridge, Massachusetts, U.S.A. He is the third and youngest child of Their Royal Highnesses Prince and Princess Mahidol of Songkla. His Majesty attended the Ecole Nouvelle de la Suisse Romande, Chailly sur Lausanne. Later on he moved to the Gymnase Classique Cantonal of Lausanne from where he received his Bachelier s lettres diploma. He then chose to enter Lausanne University to study science, but the sudden death of his elder brother, King Ananda Mahidol, in Bangkok on the 9th of June, 1946, changed the course of his life completely, for the Law of Succession bestowed on him the arduous but challenging function of the Thai Crown.

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Theoretically, the king is the “personification of the Thai nationhood” – “the King

and the People become one.15 King Bhumibol once remarked that the role he played

was not the one usually expected of a king. Certainly not a traditional king, that the

20th century has turned most monarchies into museum pieces or tabloid curiosities.

Since 1946, King Bhumibol (RAMA IX) has redefined Thai kingship for an age of

mass development, mass politics, and mass communication.16

Theory above makes differences of the monarch in Thailand from the others in two

aspects. First, he recreated the relationship between king and people by a personal

commitment to better the nation’s well-being. Secondly, the King helped to guide the

nation through the difficult process of political development (Pasuk Phongpaichit &

Chris Baker, 1998).

A memoir on the King’s sixtieth birthday recalled the concept of kingship from

thirteenth-century Sukhothai…”The King…having been entrusted with the task not

out of any divine right, but by the consent of his fellow peers, felt an inherent

obligation to rule the country ‘with the benefits and happiness’ of people in his trust.”

The King explained his own role: “I do things that will be useful and that is all”.

i15 A Memoir of H s Majesty the King Bhumibol Adulyadej of Thailand; (Bangkok: The Office of His Majesty’s Principal Private Secretary, 1987), 52. 16 Until 1932, the Thai monarch was still an absolute ruler, rendered remote by power and ritual. In 1932, nationalists revolted against this absolutism and demanded a constitution. In 1935, the King RAMA VII abdicated. For over a decade, the country had no resident, ruling monarch. This gap might have signaled a trend of decline. Instead it provided the opportunity to rebuild kingship for a new era.

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It is obvious that the monarch takes on responsibility for the economic needs and

political aspirations of the mass of people, King Bhumibol had redefined Thai

kingship for an age of democracy and development. In Thailand, the institution of

monarchy has grown steadily stronger. Very unique and important dimension of the

King is His Majesty’s contribution to agriculture and villagers.

In an annual address on 4 December 1997, His Majesty the King of Thailand, who is

the world's longest reigning monarch, mentioned that “…Whether we are a tiger is

not important. The important thing is that economy can support our people…" It was

his first direct public comment on the crisis since the economic difficulties gathered

earlier in that year and prompted the government to seek an International Monetary

Fund (IMF) bailout.

In Thailand, the royal institution and agriculture is inseparable. The influence of rice

is not only felt at the level of ordinary citizens. It also prescribes the roles and

responsibilities of government leaders including the King and members of the Royal

Family.17 One of the most colourful annual events in Thailand is the Royal Plowing

17 In Thailand, rice is the essence of life. Rice is the only crop that Thai farmer arranges to give "blessings" at every stage of its life, from planting to harvesting. They emphasise the need to live together in harmony and to be mutually supportive. In Thailand, the Rice Goddess is “Mae Posop”, the goddess who is the protector of rice17. Mae Posop and the Balinese Rice Goddess, Dewi Sri, are treated in similar ways-respectful and protective. Just as mothers give food and milk to their children, so Mae Posop gives her body and soul to everyone. In addition, such

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Ceremony, which has been held for more than 700 years. This ancient Brahman rite

is held in the public ground in front of the Grand Palace in Bangkok, during the sixth

lunar month (around May, as the regular rice-growing season approaches) to produce

bountiful crops and boost farmers' morale.18

According to His Majesty the King vision, Thailand’s agricultural resources could still

sustain the country's needs and this would enable it to emerge from its troubles better

than other nations facing economic downturns. He elaborated that "…If Thailand has

land and has modern technology and money for research and funds for agriculture.

This will help Thailand survive the crisis…"

The crucial roles of the monarch in Agro-innovation system can be seen in three

different aspects; the teaching role, the policy advocacy role and the development

projects granter.

rituals also play an important role to the beginning of agro-based economy in Thailand through the village economy that involves rice production, distribution and exchange. 18 The two main activities in the Royal Plowing Ceremony are (a) the rite to predict the amount of rainfall and the bounty of the harvest in the coming season, and (b) the actual plowing of the field by Lord of the Festival (Phraya Raek Na) with a pair of ceremonial bulls and the scattering of rice seeds from gold baskets carried by four Nang Thepi (fair ladies). These rice seeds come from the rice crops grown in the Palace. At the end of the formal ceremony, spectators rush to the ceremonial field and pick up the sacred rice grains to take home for planting or for keeping as hallowed items. His Majesty the King attaches great importance to the Royal Plowing ceremonies and had attended the ceremony for many years. In recent years, he has delegated the Crown Prince to attend on his behalf.

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3.1.2.2 Political Party

In 1975, poverty ratio of the whole kingdom accounted for 30%, the poverty rate of

Thailand has been continuously dropped into 13% in 2002. The majority of the poor

are farmers. The urban poor in Thailand represent around 7% (See, TDRI, 1993 and

SOFA 2004). Even the rate of poverty in Thai has been improved overtimes, there are

many poor farmer still live in rural area with insufficient mode of income and

resources (land, healthcare, education, water and sanitation). For the farmer, the only

source of finance was the middle man such as crop trader and Chao Por or Mafia in

providing advances (in cash and inputs) in order to gain a lien on the crop (Pasuk &

Baker, 1997, p. 64). The only mode of social safety net among the poor are Kam Nan

and Phuyaiban or the head of the village, who provide all means of access to resources

needed for the farmer.

Those middle men and village heads are elected by the villagers, all on a life time

basis. The kamnan in particular has considerable power as the executive arm of

middleman, government and political party at the local level in matters ranging from

land registry to coordination of project work (See, Phongpaichit and Piriyarangsan,

1994).

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Control the majority of farmer implies to the tendency to win the election. Because

80 per cent of the parliamentary seats belong to the representative outside Bangkok,

to be able to command enough support in parliament in order to have a role in

government, a political party needed an electoral base in the provinces. Then, the

parties has reached out into the provinces looking for electoral support and found the

middle man and village leaders with appropriate networks of influence ready-made.

Thaksin Shinawatra, the leader of Thai Rak Thai Party, is the first Thai politician to

be seriously committed to manifesto-based politics. Whereas previously party

platforms were not taken at all seriously, Thai Rak Thai’s election promises provided

the basis of most of Thaksin’s major moves during his first year in office by focusing

on farmer’s debt, to offer a million-baht development fund for every village in

Thailand under special purposed vehicle scheme (SPV) and to introduce a healthcare

scheme allowing people to receive medical treatment for a token 30 baht. This

strategy helped account for TRT landslide victory in 2001. His innovative political

strategy has shifted the above model from local corrupted middle man interacting

mode into institutionalization of political party and crate direct communication

channel between the poor (farmers) and the political party. In this respect, it is likely

to understand Thaksin as a genuinely reformist politician, moving Thai politics away

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from a set of empty choices between self-interested parties and toward a range of

active alternatives from which voters (farmers and the poor) could choose.

By transforming the old paradigm of political economy of election to more

institutional oriented approaches, political party has become another key influencing

agent for farmers and government in Thailand by introducing the political party’s

policy led model and eliminate the power of technocrat and mafia by passing through

group of professional economists and planners from the political party with direct

expose to voters at “grass root level” and at the same time opening the room for more

knowledge intensive activities into this traditional sector which we will explore later.

3.1.2.3 Non-government organisation (NGOs)

Similarly, the NGOs in developed and developing economies work for the poor and

under privilege. Most of the innovation system literature, so far, has not included or

explored the role of the NGOs in shaping or manipulating the IS. In agriculture and

biotechnology context, the NGO plays crucial role as opinion leader and at the same

time as political and power lobbyist. For example, the NGOs in Thailand and India

worked very hard to voice against an plantation of GM crop by accusing that the GM

have more costs than benefits, especially since it is already difficult for small farmers

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to enter the export market on top of tendency for these small farmers to stuck in a

debt cycle as agriculture gets into the hands of bigger producers (The Nation). This

make the government, research institutions, universities and firms in Thailand and

India face difficulties in continuing an experiment or reach any conclusion on the

GMO technology.

Apart from the technological manipulating role, NGOs plays crucial in term of

political affairs. For example, in the mid 1992, the local Thai NGOs orchestrated the

protesting villagers together in a meeting which prepared a petition to the

government on the plan to move six million settlers out of 1,250 different forest areas

to make way for forestation known as Khor Jor Kor in Thai (Phongpaichit and Baker,

1998). Again, the NGOs successfully broke the policy deployment of central

government on land reforms. Whether or not the plan is good, bad, right or wrong,

the NGOs have proofed that they play very important role as influencing agent apart

from the above two institutions.

In Thailand NGOs emerged and exerted a growing social impact as private

development organisations (Ongkon Phatthana Ekkachon) thus explicitly linking

NGOs with development work. Missingham critiqued that “…there has been on

going debate within NGO circles, academic commentators, and in the media about

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the role and legitimacy of NGOs in Thai society, not least because of their links with

foreign and international funding agencies.”

3.1.3 Producing Agents

Major differences between private sector in agriculture and non-agriculture are

associated with social recognition and institutional formation. Social recognition

prescribes to the general perception of the synonym of the poor and agriculture,

while the later is much inclined to the tendency of personal interests and fashion

among thinkers and academics toward the former evolution.

Here, we group key producing agents in agriculture sector as private enterprises and

farmers. There are huge numbers of economic and management literatures on

production firms (Cobbenhagen 2000, Foss and Klein 2002, and Bessant 2003) In

contrast, in the field of economics, even agricultural economics, and management

science, there are very little contributed to the role of peasants and group of farmers

in developing world in economic and social changes (See Chatthip Nartsupha, 1984,

Pasuk & Baker, 1995, Ingemann, 1999).

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3.1.3.1 Farmers, Co-Operatives and OTOP

In Thailand we can group non-firmed productive units into 3 categories; farmers

(peasants), co-operatives and community enterprise (One Tambon One Product,

OTOP).

Farmers: Farmers in Thailand are peasants who live in village. They are the main raw

material producer in agriculture sector. In the past, Thai village economy was a

subsistence economy. Production for food and for own use persisted and could be

reproduced without reliance on the outside world. Linkages among village members

were strong. Control of land was mediated by membership of the community.

Cooperative exchange labour was used in production. Individual families were self-

sufficient. There was no class conflict within the village.

Production relations were similar to those of the primordial socialist community – a

small community in which people help one another in a spirit of common humanity.

But the production of technology of the community was low (Chathip Natsupha,

1999). Unlike the successful transformation of villager’s technological capability in

Japan in Tokugawa period (1603-1868), that many of the techniques used by

craftspeople and farmers in the mid nineteenth century were relatively recent

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innovations. During the 250 years of Tokugawa rule more productive seed varieties

had been developed and better methods of planting and fertilizing crop introduced

(Morris-Suzuki, 1994).

The traditional style village with no technological capability could not fight back

against external changes from state and capital. Contrasting with urbanization in

Latin America Thai village has not disintegrated but kept up the struggle for a long

time. Partly because of their abundance of natural resources served as a

counterweight. Partly from the social structure so called “patronage”. Mulder cited

that “…(in Thailand) patronage expresses differences in economic and social position

in which the lesser partners show deference – call it “respect” – to the big people. The

lower people are at the beck and call of the big shots who are expected to extend help

and protection to the former in all realms of life….Patronage is a relationship

between persons, not one between people and principles, or law…Because the ties

between superior and inferiors rot in basic social differences, the ideal of equality is

absent…” In these aspects, Thai peasants hold very flexible but complicated

relationship with high tolerance under Bhuddism foundation.

Finally, population increased, resources were over-used, and this natural abundance

dwindled. The number of landless increased continuously, villagers were confused

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because of the existing institutions important to their lives were breaking apart with

nothing to replace them. The deforestation and illegal plantation started (see Section

3.1.2.3 on Kor Chor Kor incidence).

There are two main strands to the historical origins of the formation of the institution

for the poor which represents rural farmers’ role in Thailand. This directly relevant to

an emerging new actor in AIS and make the poor’s institution very important to the

successful development and transformation of the system as a whole. Firstly, post war

economic development and industrialization have transformed Thailand’s economy

and social structure, deteriorating the importance and security of the agriculture

sector, expanding economic inequality, and bring about new and more complicated

forms from both state and capital acquisition and exploitation of natural resources

such as land, forests, and rivers, since the early 1980s. This has been happened all

around the world and not exclusively for Thailand. Secondly, Thailand has a long

history of rural resistance and collective struggle against subordination and

exploitation.19 (Missingham, 2003).

The 1997 economic crisis induced grassroots collective action as representing a new

type of social actor: the Assembly of the Poor (samatcha khon chon), a group of

19 Quantitatively, it is difficult to present a cohesive account of rural opposition, as it has largely been a suppressed history, based in sporadic and geographically dispersed events.

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landless villagers and urban poor commenced a mass demonstration on the streets

facing the Government House in Bangkok demanding land reform and debts relieve

from the government.

Co-Operatives: In 2001, there were around 5,533 co-operatives in Thailand, 1,500 of

them are agriculture co-operatives (Co-operative Promotion Department, CPD). Co-

operatives movement in Thailand was introduced in the King RAMA VI in the mid

1910s (See Appendix D). The development of the Thai co-operatives is considered to

be static and very slow. The formation of the CPD in 1972 was considered as the

starting points of the state-led co-operative promotion. Even this Fourier & Owen

“Utopian Community” sound to fit with the root of Thai village philosophy, there

have many different evolutionary styles. 20 The motivation to the formation of

agricultural co-operatives in Thailand is top-down initiative. As mentioned earlier,

the villager has long history of self help structure, by any senses, this is totally

different from bottom-up approaches in Europe.

20 Charles Fourier of France and Robert Owen of England were among the earlier famous cooperative pioneers. For Fourier, his idea was to organize communal associations, the utopian communities, covering three square miles each. Each association contained, among other things, social, educational and industrial centers. Each member of an association had jointly ownership over the communal property. Robert Owen had, at about the same time Fourier developed his idea in France, proposed the idea of "new harmonic colony" which was similar to the "utopian community" of Fourier. According to Owen, the ideal group or community should consist of 500 to 3,000 people placed on about 1,500 acres. All community members should have one large quadrangular building with public kitchen and mess-room and with separate apartments for each family. The community should be mainly agricultural but should carry on other occupations for self-sufficiency. It should avail itself of the inventions, but without yielding to the factory system.

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OTOP: In parallel with the high ambitious national competitiveness and economic

restructuring under TRT party, the government pursued the idea of crating a new

structure of production at the grass roots. In order to reduce the reliance on foreign

investment and technology, Thailand should create industries which combined “local

ingenuity and wisdom” with the country’s “rich natural assets” to produce goods with

“high touch and high tech” (Pansak, 2003). The “One Tambon One Product (OTOP)

scheme was based on the idea that localities would have better chances to compete in

national or international markets if they specialized in a single product (or type of

products).

The concept of non-professional backyard innovators is not new. For example, the

case of Danish grassroot pioneers in organic farming (Ingemann, 1999). Similarly, the

OTOP mechanism is under governmental loans for OTOP projects along with some

help in technology and marketing, as well as promotion through retail events and

international awareness raising. This is the first step to upgrade some group of peasant

to have more entrepreneurial experience and one day become small and medium

sized enterprises (SME’s).

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3.1.3.2 Production and Trading Firms

Contemporary evolution of agricultural production and trading firms in Thailand

started during the 1940s. Despite the attempts of military government to bring the

urban economy under government control, Bangkok’s Chinese-dominated business

grew very significantly (Pasuk and Baker, 1997). Through rent seeking, the

government at that time successfully aligned benefit between politician and Oversea-

Chinese entrepreneur. This is the starting point of long period of Oversea-Chinese

domination in agri-business in Thailand.

Since the mid 1980s, agribusiness and other resource-based industries have grown.

Exports of fruit, seafood, animal feeds, wood products, and assorted foodstuffs all

expanded. The capital was wholly or largely local. Firms started using local inputs,

later acquired sufficient scale and comparative advantage to move on to processing

imported materials. In the late 1980s, several new ventures in freezing and canning

seafood for export started to grow according to the development of fish and shrimp

farming. Later the firm moved on to processing imported ingredients such as tuna

caught in the Pacific and Indian oceans.

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In this period, the CP group or Charoen Pokphand, growing from seed company of

Overseas-Chinese in the 1920s, has expanded. The origin of CP group is in

agribusiness and food processing. Later, CP group has expanded into

telecommunication, services, retailing wholesales, and logistics, but still rank as the

biggest agribusiness group in Thailand.

Charoen Pokphand Food (CP Food) is one of the largest feed producers in the world.

CP’s feed manufacturing, had its origins in Thailand in 1954, as an offshoot to its

original seed supplying business. Today, CP operates feedmills, producing food for

poultry, swine, shrimp as well as pet food for dogs, cats and fish, in Thailand,

Cambodia, China, India, Indonesia, Malaysia, Myanmar, Singapore, Turkey, Taiwan,

USA and Vietnam. The business lines of CP Food are aquaculture industry, frozen

food and food services, pet foods, crop integration, seeds fertilizer, and plant

protection. In short, the company covers the whole value chain of agribusiness. CP

Food is among the pioneer firm that active in research and development which we

will discuss later. Apart from large conglomerate, there are huge numbers of trading

company for important crops. For example, rice, cassava, sugarcane, chicken, fruits

and etc.

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279

Unlike the results of the community innovation surveys presented in chapter 4, many

of interviewed firms related to agribusiness from the survey of new niches areas in

biotechnology related businesses reflect active research and development activities in

seed production business, especially of the development of transgenic plants to

improve productivity and product quality.

3.2 Linkages, Successes, and Failures within the SIS

Figure 5.3 illustrates simplified linkages of key actors within the Thai AIS by applying

SIP mechanism to analyse the complex interaction. Supporting agents compose of

ministries and public knowledge creation institutions (university and RTOs).

Influencing agents compose of the King, Political party and NGOs, while key

Producing agents are firms and farmers. Again, unlike the weak and fragmented Thai

NIS, the The AIS is not only weak and fragmented, it is very complicate. We can see

two different sub systems within the Thai AIS, community-based innovation sub-

system (The Monarch, political party, peasants, government and RTOs) and

production-based innovation sub-system (Freeman’s functional-based innovation

system approach of firms, government and universities).


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3.2.1 Supporting Links

In the past, agriculture policy in Thailand has been fragmented. For example, the

promotion of “Kitchen of the World” policy has been in the air form decades, in

reality, there has not been concrete policy and strategy or even the clear picture of

the position of Thai agricultural capacity. Integrated policy development for

agriculture always involve many Grade A ministries. This increases complication to

have well-organised policy development with continuity and good division of labour.

From interviews with various experts, the existing policy direction for many key

strategic crops is appropriated. However, there are three key strategic groups of

activities that policy makers and researchers should take very close consideration.

There are groups of activities with high competitive advantages (focusing on rice, hot

climate crops, cut-flower orchids, and fishery), groups of activities with less

competitive advantages (soybean, corns, cottons, and dairy products) and groups of

activities with high impact to national environment (pig and shrimp production,

zoning and waste management).

The roles and the importance of tangible assets are reducing in the post industrial

sectors. In contrast, tangible assets like land and water still very important to the

agriculture sector, especially, in the sense of social security and distribution of wealth

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in grassroot level. Government has direct duty to manage and control of scare

resources. There are four crucial resources important to Thai AIS development

including soils, water, human resource and finance and financial incentives and

infrastructure. As mentioned earlier, land less farmer is one of the big problems. Also

the environmental and zoning issues are also important to the AIS. The structure of

land utilization in Thailand has been unclear. Deforestation had been once very big

problem, most of lands retrieved from the illegal deforestation was used for living,

plantation. At the same time, agrarian spaces were taken over by urbanization and

industrialization.

3.2.2 Influencing Links

As mentioned earlier, there are three key influencing agents in Thai AIS. The King

plays prestige and very important role as social harmonization and teacher of the

farmers. The role in agriculture development of the King is much more than

supporting role, but rather influencing in the mind set of people to follow.

Separated from the good will role of His Majesty, the political party in Thailand has

institutionalized itself through the “popularize policy” by transformation of the role

of political party with no political and policy direction into more operational

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approaches of administration through ministerial manipulation. Anyway, NGOs still

plays crucial role as leading opinion leaders and affect the policy deployment of

political party as the counterbalance between farmers, firm, political party and

government.

3.2.3 Production Links

The linkages and interaction between public and private sectors in Thai system can be

seen as triangular relationships of peasants, state and firms. These kinds of

relationships still represent the agricultural structure in many parts of country.

We can see the evolution of peasants in three different routes; self-organising

assembly, top-down co-operatives, and entrepreneurial OTOP. For the bottom of

grassroot level, the assembly of the poor play crucial and controversial role on

political lobby and protection for the right of peasants. The co-operatives have been

recognized as source of money from the government rather than the self-organising

group of farmer to increase production or to achieve something. The OTOP, so far,

has been positively welcomed from group of peasant and farmers as new institution

and successfully set sense of belonging among member. Many groups of people take

product and brand development by pursuing cluster method (Intarakamnerd, 2005).

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t

t

f t t

i

t

r

State and Farmers Links: Unlike European experience on the evolution of peasants,

Thai peasants have been exploited by Overseas-Chinese entrepreneurs. State in

Thailand in past was not involved with production and Thai peoples were not familiar

with trading. Since the early 20th century, Danish agriculture had already founded a

tradition of collaborating and co-ordinating their efforts in the market through the

co-operatives and, at the same time, using governmental regulations and subsidies to

create a strategy for running and developing Danish agriculture (Ingemann, 1999).

Comparing with Thailand, with almost 600 years old of public institution for

agriculture development, the country has been adopted the idea of co-operatives into

the heart of the MAoC just around 40 years ago. Like Chatthip Nartsupha illustrated

on the evolution of institutional set-up between Thai state and villagers that;

“The old Thai sta e extracted labour services and produce taxes directly fromthe village. This was different from the experience in European history where exploitation in society was exploitation of individual by individual, for example, of the peasant by the landlord. In that case the landlords intervenedto manage the village production and improve it to some exten . The old Thai state was not an organization involved in production, only in taxation. It hadno though o nurturing the village a all. Besides, the old Thai s ate blocked the rise of a free bourgeo sie which might have provided leadership for the villagers’ struggle, as occurred in the European experience. The Thai state limited any development at the provincial level by co-op ing provincial leaders completely onto the side of the state. It did not support the sometimes suppressed any collaboration at the regional level which the centre did not accept. As a result, regional towns were not independent and not important.In Thai history, the e were only two lead characters, the institutions of state and village. All other parts were supporting roles” (Chatthip Nartsupha, 1999, p. 75).

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In 1985, Thailand had 41% of agrarian land (Office of Agriculture Economics). The

industrialization has been viewed from the farmers as treat to the ways of life in the

village. Many state-led projects play crucial roles as cause for land loss of villagers

(Surapon Sudara, 1998). Ammar Siamwala (in Thai, 1999) critiqued that the most

problematic issues in land management are zoning and land registration for farmers.

Still, the water irrigation system in Thailand is not sufficient, demand management

and structural adjustment have been seriously discussed and ministry of water is

under consideration for establishment.

From the failure in institutionalization of agriculture sector, technology learning

among firms, peasants and state is considered a moderate success stories. For example,

in seed production business and contracted farming, foreign firm like Dupont and

local firm of CP Food are the major seed provider for farmers. Currently, only about

20% of all planted seed in Thailand is purchased with 80% belong to farmer stock and

from plant-back seed as the grower places a premium on increased yields, while the

loca MAoC’s agricultural technology transfer units has successfully diffused new

knowledge to grassroot in many areas (Chairatana, et. al., 2004). Thus, high yielding

germplasm is essential for the use of purchased seed for commodities to increase. Also,

contracted farming becomes important source of income security and reduction of

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f i

rl l fit ,

illegal loans from various traditional sources for farmer. Securing crops purchasing

and quality control has induced technology transfer from buyer to producer, but at

the same time, farmer has increasingly relied more on knowledge, resource and price

control from the contracted buyers.

3.2.4 Financial Incentives and Infrastructure

The contemporary for the turning point on long battle of peasantry and agricultural

development in Thailand can be traced back to the early 1900’s when Phraya

Suriyanuwat, who served as Minister of Finance in 1906-7, argued that the

government should invest in agriculture by providing more credit to the individual

peasant:21

“…The progress o Siam (The name of Thailand at that per od) is ever moredependent on paddy cultivation. Whether Siam will grow quickly or slowly is dependent on the benefits farmers will receive. But how to give farmers mo e reasonable access to credit, which will enab e them to rea ize more pro s isthe major problem’ (Suriyanuwat, 1975: 73).”

Since then, there has been very little change on the financial supports for peasants in

Thailand. In contemporary financial structure, it is general perception that only

traditional agriculture activities and income from selling primary products could not

21 Phraya Suriyaniwat wrote “Sapphasat”, the first Thai treatise on economics.

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feed and leverage living stand of ordinary farmers’ family. In Thailand, development

of ‘community enterprise’ has been introduced in parallel with agricultural and

continuing industrial loaning system to the agricultural sector for decades which is

the foundation of co-operative promotion in Thailand. As a result, the farmers need

credit for their supplementary investment.

Approximately, there is new farm credit on loan around 220 billion baht each year.

The amount of debts per household has increased 12 times between 1980 and 2001

(Office of Agricultural Economics). Before Thaksin’s administration, the Bank for

Agricultural and Agricultural Cooperative (BAAC) has had developed its expertise in

small amounts of short term loan for small farmers, and responding to 60% of national

farm credit. As a result, BAAC has to shift its vision to become the “Premier Rural

Development Bank” in the Asia-Pacific Region by concentrating mainly on the uplift

of the people’s life quality coupled with the promotion for sustainable consumption of

natural resources and environmental, orchestrating with the TRT government’s

“Special Purpose Vehicle (SPV)”. The foundation of SPV idea is to transform almost

600 billion baht of small farmer’s debts to productivity.22

22 The Cabinet, on 9 November 2004, approved the establishment of a special purpose vehicle (SPV) as a new financial mechanism to support the agricultural business in rural areas.

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4. Transformation of AIS in Thailand

Many diverging characteristics of sustainable farming development and agro-

industrialization in various economies have been responded to the globalization and

international trade through social conflicts. Opposite to the industrialization in

Thailand which we illustrated in Chapter 3 and 4, the transformation of AIS in

Thailand can be seen as harmonious twin paradigms of the sectoral development. In

Thailand, the balancing of national competitiveness through productivity

improvement and standardization of agricultural and agro-industrial products is as

important as leveraging living standard of peasant through sustainable development.

Paradigm shift on competition, development and community learning have been key

issues among stakeholders in the sector.

There have been two concepts simultaneously evolved through the collaboration of

key actors by following His Majesty the King development philosophy as mentioned

above in section 3.1.1. There are His Majesty “Self Sufficiency Theory” and

“Economic Restructuring toward Knowledge Based Economy”. The two are coined by

the introduction of TRT government’s “Dual Track Economy Policy”.

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t l i it

r

4.1 The Monarch and Self Sufficiency Theory

Over the past three decades, His Majesty has continuity reminded Thai people

through his royal remarks on many occasions of a step-by-step and balanced approach

to development, which is now known as the Philosophy of Sufficiency

Economy. The philosophy provides guidance on appropriate conduct covering

numerous aspects of life. The following is one example of an excerpt from His royal

speech in 1974:

“Economic development must be done step by step. I shou d beg n w h thestrengthening of our economic foundation, by assuring that the majority of our population has enough to live on. ... Once reasonable progress has beenachieved, we should then embark on the next steps, by pursuing more advanced levels of economic development. Here, if one focuses only on rapid economic expansion without making sure that such plan is appropriate for ou people and the condition of our country, it will inevitably result in various imbalances and eventually end up as failure or crisis as found in other countries.” (Royal Speech 1974, p.12)

After the economic crisis in 1997, His Majesty has reiterated and expanded on the

concept of Sufficiency Economy in remarks made recently after the crisis in

December 1997 and the following years. The concept points the way for recovery

that will lead to a more resilient, balanced and sustainable development, better able to

meet the challenges arising from globalization and other changes. The theory bases on

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the Buddhism middle path philosophy. The NESDB defines the “Self Sufficiency

Economy” as a philosophy that stresses the middle path as an overriding principle for

appropriate conduct by the populace at all levels. This applies to conduct starting

from the level of the families, communities, as well as the level of nation in

development and administration so as to modernize in line with the forces of

globalization (See Appendix E for more details). Self Sufficiency theory becomes

important driving philosophy in most of policy development agencies, firms and

people.

4.2 Value Creation in Thai Agro- Innovation System

4.2.1 Biotechnology: the Revolution of Agro-innovations in Thailand

Together with Self Sufficiency Economy, in order to take advantage of the large

economic potential of biotechnology, Thailand with over 45% of labour force is in the

agricultural sector, agriculture remains a significant part of Thai economy. The

country is also considered as important tropical plant animal and microbe genetic

resources. Thailand has been known as an agricultural-based country for a long

period of time. Due to the geographical advantage, the country can grow high quality

rice widely known as “jasmine rice” and wide varieties of tropical fruits, vegetables

and ornamental flowers. In addition, prosperity and diversity of natural resources

provide perfect foundation for agricultural-based practices. These foundations make

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Thailand the world’s leader in rice, tropical fruits and vegetables export. With this

background, most of the industries established in the past were agro-industry focusing

only on post harvest technology or food processing primarily (See Appendix G).

Biotechnology has generally been considered in isolation from any specific national

context, which, to large extent, will determine success or failure in taking advantage

of what the new technology has to offer. The intrinsic capacity of Thailand to

stimulate technological change and innovation – and, hence, to integrate

biotechnology in the process – has rarely taken into account in formulating

biotechnology policies and strategies.

Biotechnology has thus become one of the country’s key strategies for developing the

competitiveness of Thai natural and biological products. As a result, Life Sciences and

biotechnology will indeed provide a major contribution to achieving Thailand’s

objective of becoming a leading knowledge-based economy in Southeast Asia and

gaining recognition as ‘Kitchen of the World’.

In the past, biotechnology business in Thailand had mainly been involved the

utilisation of micro-organisms, generally, natural occurring strain, for production of

foods or food products. Generally, raw materials for the fermentation process were

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agricultural products, or agro-industrial wastes. For example, production of soy sauce

which is one of the major biotechnology-related business clusters in Thailand,

production of monosodium glutamate by Ajinomoto, ethanol production from

molasses, fermented foods using lactic acid bacteria and dairy product such as yoghurt

(Chairatana and Ratchadawong, 2004).

During the past 10 years, trend of biotechnology-related business in Thailand has

shifted slightly. More advanced technology has been utilized in agro-industrial

biotechnology business. Thai RTOs and national funding agencies such as National

Centre for Genetic Engineering and Biotechnology (BIOTEC) and Thailand Research

Fund (TRF) have paid more attention in medical biotechnology fields. Extensive

research in molecular biology has been conducted not only in the medical fields but

also agricultural and industrial fields. In the medical area, most of biotechnology-

related business involved import and sale of drugs or diagnostic kits, medical

equipment and supplies derived from R &D conducted in foreign countries. Market

demand in research and laboratory equipment and supplies, reagents, chemicals, and

enzymes for molecular biology, recombinant DNA technology and protein study has

been increased significantly. Thus, an increased in a number of companies selling

these goods has been observed (Chairatana et. al., 2004). However, applications in

agro-industry are still the most important for Thai economy. In Thailand, most of

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biotechnology related researches have been focused on agricultural biotechnology

field.

In addition, biotechnology has been exploited traditionally for wastewater treatment

from agro-industries such as tapioca starch factories and production of biogas from pig

farms. This technology has been well accepted by a small group of farmers and factory

owners because waste can be utilized and treated efficiently. However, not many

factories are interested in this technology as the investment and operating cost is

quite high and factory must use open pond waste treatment system in order to use

biogas technology.

4.2.2 Technology Foresight: Paradigm Shifts on Technology Policy and Planning for

Agro-Biotechnology Sector.

Martin and Johnston (1999) asserted that ‘Technology Foresight’ offers a means of

‘wiring up’ and strengthening the connections within the national innovation system

so that knowledge can flow more freely among the constituent actors, and the system

as a whole can became more effective at learning and innovating. Foresight provides a

mechanism for considering and developing strategies without engaging in top-down

planning. They also noted that: ‘In the case of system-wide learning, we need a

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process capable of wiring up the national innovation system so that it too becomes

more effective at learning. The more this wiring up take place, the more effective the

national innovation system should become in terms of learning and hence innovating.

Foresight is a process for achieving this goal’ (See Appendix F).

Thailand is the host of APEC Centre for Technology Foresight (TF). NSTDA launched

Thai Foresight Unit in 1998 to pioneer the application of technology foresight into

the agriculture sector in developing economies. It shows a remarkable contribution to

innovation policy of Thailand by producing the result of this macro level exercise for

the National Biotechnology Plan in early 2003. The sectoral study wired up the two

concepts together which may facilitate the policy makers to deliver an unprecedented

policy and planning for the sector. Later the idea of integration of TF with innovation

system has been spread through many APEC member economies. For example, there

were exercises for tea industry and fish farming in Vietnam, water resource

management and Mega City in APEC level (Johnston, 2002, and Chairatana and Bach

Tan Sinh, 2003).

The agriculture foresight conducted in 1998 concluded the picture of Thailand future

agro-biotechnology envisions that by the year 2011, biotechnology will be playing a

vital role in the national development in line with major government policy and the

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national agendas, which gears toward sustainable competitiveness, healthcare for all,

equitable income distribution and a self-sufficiency economy. The areas of emphasis

will be an application of core technologies, e.g. genomics, bioinformatics, plant and

animal breeding by means of molecular markers to accelerate development in the

following areas: agriculture/food, medical care and environmental protection, new

knowledge creation for the development of higher value-added products, as well as

for knowledge-based policy and strategic planning. The committee foresees that the

core technologies would help to promote biotechnology business with high-end

product and new types of services where modern technology is in demand.

In 2002, Graduate School of Management and Innovation (GMI), at King Mongkut’s

University of Technology Thonburi (KMUTT) by the joint supports of Japan

International Co-operation Agency (JICA) and NSTDA, conducted the survey for new

niche areas in biotechnology related businesses. The aims of the surveys are to

identify industrial sub-sectors which have or will have potential to gain significant

benefit resulted from R&D or application of biotechnology, survey firms in sub-

sectors for information including their basic characteristics (e.g. size, ownership,

income, etc.), their technological activities and effort, their expected new niche areas

and goals and their needs and strategies to achieve the goals and identify key research

institutes and universities thought to have R&D activities related to industrial needs.

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And recommend policies and strategies for both government and private sectors in

enhancing biotechnology related business in Thailand both existing and new niche

areas through cooperation between industry and R&D sectors.

The finding is that Thailand should emphasis on applying core biotechnology,

namely, genomics, bioinformatics, plant and animal breeding by mean of molecular

markers to accelerate the development in the following areas: agriculture/food,

medical care, automotive industry and environment protection. High valued-added

products, namely, medical diagnostic kits (especially those for tropical diseases such as

dengue fever, malaria and typhus), herbal products (with international standard),

supplementary food, high-yield seeds and bio-degradable plastics for automotive

industry should be given as high priority as well as biotechnology services like

molecular-level detection/analysis for medical care and public health, agriculture and

food export (e.g. to tackle problems of technical barriers to trade), and bio-safety

(Chairatana et. al., 2004).

As for existing products such as shrimp, rice and cassava, biotechnology should be

applied more as core part in reducing chemicals (such as promoting usage of bio-

fertilizer), increasing productivity and generating innovations (such as new breeds of

plants and livestock that are able to meet the ever-changing market demands).

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In brief, there are 3 industrial areas which are medical industry, bio industry and

green industry, and 6 biotechnology fields of major applications of biotechnology

based on Thailand biodiversity strength which includes biomaterial (bio-plastic), bio-

energy (bio-diesel and gasohol), agro-biotechnology, medical biotechnology (Herbal

and medical kits), bio-environment and bio-industry (Chairatana et. al., 2004).

With a rapid growth of advanced biotechnology research worldwide, the Thai

government also realized the necessity to strengthen biotechnology research

capability of the country as those who do not have competency in biotechnology will

be left behind in the near future with no bargaining power in the international

community. In the early 2003, the development process of framework had conducted

by using many brainstorming sessions and analysis of data from commissioned studies

of contemporary status and trends in biotechnology-related fields, including public

hearing with technical experts, the private sector and other stakeholders. Six months

later, the secretary under the responsibility of NSTDA and BIOTEC, branch of

NSTDA with specialization in biotechnology completed draft report on the

identification of framework of policy initiatives for developing Thailand’s

biotechnology. Later, comments on the draft report were subsequently sought from

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BIOTEC’s Executive Board and the National Science and Technology Development

Board, who provided some recommendation to improve the report.

The first eight years roadmap for Thailand National Biotechnology Policy (2004 –

2011) is the initiative of Dr. Thaksin Shinawatra, Prime Minister of Thailand. The

assemble of the framework was jointly developed by the National Economic and

Social Development Board (NESDB), in collaboration with National Centre for

Genetic Engineering and Biotechnology (BIOTEC), and the National Science and

Technology Development Agency (NSTDA), and submitted to the National

Biotechnology Policy Committee (NBPC), chaired by the Prime Minister himself on

23 December 2003.

The NBPC concluded to draw the framework, for the period of six years (2004-2009),

with 6 major goals23. In conjuncture to this roadmap, the appointments of six sub-

committees were done to discharge each separate goal. Along with the committees, a

special sub-committee was also set up entrusted with main task of genetic engineering

and bio-safety policy development (See Appendix H).

23 The reason to shortening the proposed period under the framework was that the NBPC views the biotechnology development in Thailand possesses high potential along with a series of on-going projects that has been carried out with much efficiency and resources.

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Following the agricultural exercise in 1999, the first 5 years national biotechnology

roadmap (2004-2009) was submitted to the office of Prime Minister in January 2004.

Thailand with abundant biodiversity is entering this knowledge-intensive business

and has high hope to gain competitive advantage from the utilization of its existing

resources and develop its research capability to meet with technological challenge in

the fields of life science and biotechnology. There are 4 major areas that will be

focused and supported not only technically but also financially to academia and

industrial sectors (See Table 5.5).

These strategies should reflect the direction of biotechnology business to be emerged

in the next 5-10 years. In addition, the plan was announced in conjunction with the

drafting process of the national agenda on biotechnology. Thus, it should reflect

national trend in biotechnology development as well. According to the 5-year plan,

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biotechnology innovations could be arisen from the aforementioned research

foresight. Types of business could be developed will be:

- production of GMO rice with desirable characteristics and can be grown in the

stress environment, especially jasmine rice which is one of the most popular

rice variety in the world.

- Business in production of diagnostic test kits for shrimp diseases, human

diseases, plant diseases. More companies focus on R & D of diagnostic test kits

should be established. Currently, only 2 spin-off companies were founded

which are Innova biotechnology and DNAtech.

- Firms for managing of wastewater from shrimp farms, tapioca starch, Spirulina

farms, etc.

- Business in production of modified tapioca starch, especially for modified

starch granule size

- Use of modified tapioca starch for cosmetics, pharmaceuticals, and food

industries

- Production of probiotics for animal feeds to replace use of antibiotics

- Production of enzymes from microorganisms for animal feeds

- Biotechnology service business in terms of product’s quality assurance

- Production of biological control agents, bio-pesticide, etc.

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- Screening of novel bio-active compounds from bacteria, fungi, or insects for

anti-cancer, anti-malaria, anti-TB, anti-HIV, etc. As a result, foreign

pharmaceutical companies may interested in these products and start R & D

facility in biotechnology in Thailand.

Anyway, the business trend in biotechnology in Thailand in the near future (5 years)

could well be focused in the agricultural aspect rather than in the medical fields. This

is due to strength and nature of Thai society. A number of full-time researchers in

medical field is much less than those in agricultural and agro-industrial biotechnology

fields and most research conducted in the medical fields was concentrated at the

clinical trials but not at the fundamental knowledge. Investment in real

biotechnology research and development by private sector in Thailand is very rare

since it requires large sum of investment. Majority of biotechnology-related

companies operated at present are medium size businesses. Even, large scale company

like C.P group still reluctant to invest in real R & D in biotechnology to be used for

their product improvement and production processes (Chairatana, et. al., 2004).

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4.2.3 Technological Innovation in Agro-Biotechnology Crops

Currently, rice is the most studied and new cultivars with improved characteristic

have been introduced to the companies to produce seeds for farmers. However, these

technologies are used mainly by public RTOs and implemented only in the state

incubating fields, and universities. Only few agro-industry firms are capable to scale

up the production to meet the demands (Chairatana et al., 2004). Table 5.6 shows the

active research technology organizations and universities in Thailand that

continuously collaborate in rice, cassava and shrimp researches.

Table 5.6: List of institutions conducting biotechnology research in the selected commodities

Commodities RTO’s and Universities Rice BIOTEC, Kasetsart University (KU), Rachamnkol University of Technology (RUT)

Lampang campus, Rice Research Centre (Department of Agriculture, Ministry of Agriculture and Cooperatives (MoAC), Asian Institute of Technology (AIT), Khon Kaen Unveristy (KKU)

Cassava BIOTEC, KU, Mahidol University (MU), and King Mongkut’s University of Technology Thonburi (KMUTT)

Shrimp BIOTEC, Prince of Songkla University (PSU), Department of Fishery (MoAC), Burapha University (BU)

Souce: Chairatana, et al., 2003

Extensive research has been performed to modify starch granules of cassava tubers so

that smaller granulated starch could be generated which can serve as potential raw

materials for industries such as cosmetics and pharmaceuticals, while shrimp farmers

demands extensive researches on disease detection and domesticated broodstock

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technologies. In this direction, firms, university and RTOs in Thailand play crucial

roles on innovation development in agro-biotechnology business.

Recently, biotechnology has played a role in improvement of Thai rice varieties. This

is in order to develop the process of rice production and improve productivity.

Among fragrance rice, Jasmine rice (Aromatic rice) is considered as high quality rice

with smell of flower. Only specific location in the norheastern Thailand can grow this

variety. The productivity is not that high. Better quality seed could be seen as the

solution in improving yield. In order to develop the process of rice production and

improve productivity, rice research in Thailand exploits advanced technology such as

gene tagging, genome mapping and genomic sequencing and several genes responsible

for productivity traits, for example, through the development of strains by molecular

markers by genes controlling for several disease resistant traits, stress tolerance are

identified and new cultivated with improved traits have been developed. In addition,

transgenic rice strains have also been developed to introduce desirable characteristics

that can not be manipulated through conventional breeding programme.

However, it will take sometime to encourage farmers to invest more for higher

returns in the longer term (80% of seed stockpile belongs to farmers). For supply side,

few companies produce seeds as the business in not seen as commercially viable

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304

because of long process of developing long strain. According to the CP Crop

Integrated Group, the company produced a total of 15,000 tons of four varieties of rice

seeds for distribution to growers in 2002. The requirement for rice seeds is 900,000

tons but so far public and private agencies could support only for 100,000 tons

(Agricultural Extension Department).

Apart from productivity improvement, seeds require to improve disease resistance.

Transgenic rice with several disease resistant traits, stress tolerance are identified and

new cultivars with improved traits have been developed. Rice genome sequence

technology will identified and located the improvement of rice strains. The main

focus is to link physical map and sequence information from Nipponbare to KDML

105 to improve cooking quality, aroma, nutritional values, and etc. Then, rice can be

classified as nutraceutical product with more value.

BIOTEC’s DNA discovery unit, has participated in the International Rice Genome

Sequencing Programme to decode 300,000 genes in rice which will be discovered

around the mid 2010s To this end, genes that control the economically important

traits will be identified and located and the improvement of rice strains can be carried

out in a much more efficient way (See Figure 5.3).


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BIOTEC play crucial role by development special research unit with close

collaboration with university to solve production and environmental problems of

shrimp farming. In 1996, the Shrimp Culture Research and Development Company

Limited (SCRD), a government-industy consortium dedicated to the development of

sustainable shrimp aquaculture has bee established. In order to maintain high levels of

production, shrimp diseases have been recognized as serious problem among Thai

researchers and farm owners.

The Thai shrimp industry exports between 250,000 and 300,000 metric tonnes of

shrimp annually, mainly from farmed sources. All of this relies on wild catch of

spawners. However, availability and quality of spawners has been declining for some

years. Moreover, wild shrimp carry an additional risk of disease. Relying upon will

spawns is not good strategy. Two important technological innovations for shrimp

farming and production are molecular detection technology for viruses and

development of domiticated broodstock technology. Two important diseases to be

tackled are yellow-head virus and white-spot virus. Another technology is to develop

domesticated broodstock with specific pathogen-free.24

24 At present, all broodstock come from wild shrimp catch by specialised broodstock fishers [wild broodstock are either males/females or “spawners”- females with eggs]. These are sold directly to nauplius producers [nauplius is the first stage hatched from the egg] or hatcheries. Spawners produce eggs within 1-20 days depending on the stage of ovary development and the eggs within 36 hours to produce nauplii. Nauplius producers sell these to small hatchries which do have their own spawning facilities. It takes 18-25 days to grow from nauplius to postlarvae, before selling these to farmers. These postlarvae are stocked by farmers in their ponds and take between 4-5 months to grow to a market size of 20-30g each. Wild broodstock cost from 3,000 baht for a female with no eggs to

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Cassava innovation starts the development of new cassava variety through

hybridization. Production process of starch is considered as energy consuming and

dirty activities, another technological innovation is waste & energy utilization for

management process. Also, new generation to gain new cassava variety is starch

biosynthesis.

From the three cases, most of technological innovation in key strategic crops focuses

on productivity and quality development, which requires high budget for R&D and

take very long time. In this sense, it reflect that Thai farmer still the most important

in the value chain as those technology will serve the farmer to gain more income and

preserve the environment.

4.2.4 Emergence of Dual Track Economy

The dual-track policy can be regarded as an economic development policy framework

of the TRT government led by Dr. Thaksin Shinawatra. This new policy approach

aims to create a more balanced society as much as to reduce Thailand’s exposure to

as much as 10,000 baht for a female with eggs. Nauplii are sold by the million at a price of around 6,000 baht per million and postlarvae will sell for between 12 and 18 satang per piece depending on size and quality. The potential market for shrimp broodstock, nauplius and postlarvae in Thailand is approximately 5,000 million baht.

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s

external volatility. The rationale behind this policy can be explained when looking at

the changing environment of the global economy.

In the past, the world’s economic prosperity was very much dependent on three

major economic blocs, namely the Unites States, Western Europe and Japan. The

economic growth of developing countries, Thailand including, were unlikely to

achieve without external demand and strong economic performance of the big three.

However, the situation started to change as some empirical evidence suggested. The

rise of Chinese economy during the last fifteen years started to water down the

eminence of the big three economies. Moreover, as well as China, other East Asian

countries started to adopt the new approach to achieve economic recovery after the

1997 financial crisis, which focused on stimulating domestic demand in parallel with

promoting exports. As the Prime Minister described that;

… “The dual-track approach represents a new policy paradigm of simultaneously pursuing the development of a strong domestic foundation forthe economy as well a promoting linkages through international trade, investment and financial cooperation. The two tracks combined will lay a solid base for sustainable growth and stability for the country.”…(Dr. Thaksin Shinawatra Prime Minister of Thailand At the Tenth APEC Finance Ministers’ Meeting 4 September 2003)

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For high road side, to achieve the goals of creating and strengthening the

aforementioned niche high value added areas, four policy recommendations are

proposed:

1. Bio-Infrastructure: Thailand’s National Biotechnology Policy Framework

2004-2011 envisages development of massive infrastructure like biotechnology

parks where government R&D institutes and tenants buildings located inside

(similar to those of Singapore’s Biopolis and Malaysia’s Bio Valley). This is, of

course, a necessary step to provide a big push for biotechnology-related

industries. However, smaller incubators inside universities in different parts of

Thailand should also be promoted. Government should bear in mind that there

are different types of incubators. Each is suitable to promote companies at

different stages of growth. ‘Technology incubators’ type should be provided for

companies that are just in the process of proving their ideas technologically.

This type of incubators might require only small space but it has to be close

universities’ faculties in order to have intensive interaction with faculty

members. Another is ‘business incubators’ type. It may requires more space

and does not have to be so close to university’ faculties. What needed at this

stage is business incubating, for example, how to write business plans, and how

to seek funding and collaborative partners.

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2. Bio-financing: Many people think the best way to finance start-up companies

especially new technology-based companies like those in the biotechnology

field being through private venture capital. This might be true in countries

like the US where its capital market has been developed for several decades

and people have high acceptance to failure. However, in developing countries

like Thailand where capital market is not well developed and financial

institutions (including existing venture capital) are risk-avert, private venture

capital is not adequate to finance biotechnology start-up firms.

Seed money from the government in the forms of matching grants (i.e.,

government match every Baht private firms invest up to a certain limit) might

be a better solution. Start-up biotechnology firms or individual biopreneurs

should be provided with matching grants from the proof of concept stage

(when firms or individuals have only technologically untested but interesting

ideas), to the start-up stage (when ideas are technologically sound but need

more business development to enter the markets) and the early-growth stage

(where products have been out to the markets but business are still not well

established).

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3. Bio-Human Resources: Qualified human resources in the biotechnology fields

should be increased substantially, especially those having masters and Ph.D.

degrees in specific fields supporting niche sectors. Government needs to

allocate more budget and resources such as laboratory facilities to train people

in such fields. In addition, ‘teaching consortiums’ comprising professors from

various universities and outstanding researchers from public R&D institutes

should be formed to pull resources together to train post graduates students.

Biopreneur courses should be encouraged. Students with background in

biotechnology should be trained in technology and innovation management. They

should understand how to start biotechnology companies such as how to

commercialize research, how to write solid business plans, how to seek funding

and cooperative partners.

Rotation of bio-human resource between universities and private companies

should be supported to facilitate flow of knowledge and generating cooperation

and trust between the two sides. University professors should be encouraged to

second at private companies for one or two years, and their contribution to private

companies in terms of collaborative research and product development should be

given high credit at the same level as academic publication.

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4. Bio-research: Funding for biotechnology research supporting niche areas should

be given a higher priority compared to other fields. ‘Research consortiums’ in

strategic areas should be established. Members of such consortiums should

comprise researchers from different agencies such as universities, research

institutes and private firms. Funding for prioritized areas of research supporting

niche areas should be given to such consortiums on competitive basis rather than

individuals or single organizations. This is an effective ways used in several

developed countries and newly industrialized countries like Singapore, Taiwan

and Korea to force researchers from various organizations to collaborate, and

share knowledge and make sure that their researches satisfy needs of industry.

This multidisciplinary environment fosters the establishment of synergies and

cooperative research and supports new ideas, products or processes as well as the

birth of new companies developing these new concepts. The essential requirements

for such a favourable milieu are:

• technology transfer processes

• financial support

• law consulting

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• business management

• biotech oriented communication

This means that highly qualified professionals are required: they must have a

multidisciplinary expertise in order to manage the ever-changing issues of an

international and extremely challenging marketplace.

At the opposite direction of high technology development in agriculture sector, the

government developed “popluarist policy” which integrate the philosophy of self

sufficiency economy as key implementation for villager in line with OTOP initiatives

and new technology development scheme for framers in both agricultural technology

and agricultural business.

5. Conclusion

Asia is trade-driven! The idea that other Southeast Asian nations ought to emulate

Thailand and let agriculture fill the gap in growth created as more and more

manufacturing flees north to China arising after the financial crisis hit the region in

the late 1990’s. The idea that counter to the rest of the Southeast Asia's leadership,

who since independence have been trying to wean their nations from labor-intensive

commodities like rubber, grain and palm products by courting foreign investors to

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build high-tech factories, might be25. But agriculture still has an important role in

most Southeast Asian countries, especially in Thailand and Vietnam, partly in

Malaysia and Indonesia, except for city state like Singapore that service sector flourish.

The description of the Agro-Biotechnology Innovation Systems illustrated in this

chapter reflects how uniqueness and importance of the traditional sector which

contributes to Thai society and at the same time act as social capital reservoir for the

engine to drive Thai economic and social transformation. In Thailand, agriculture

represents about 10 percent of the economy but provides a living to half the

population.

Thailand has abundance of bio-resources and capacity in biotechnology to the extent

that the country should put extraordinary effort to promote this technology and use it

to strengthen existing industries and to create new ones. It is a remarkable

achievement that the National Biotechnology Policy Committee, chaired by the

Prime Minister, was established and the nation’s master plan for developing

biotechnology has been composed. This shows strong commitment from the present

government that developing biotechnology is a national issue worth having a special

national-level committee chaired by the Prime Minister himself.

25 Thailand and Japan are only two nations in Asia that survive from the colonisation of the West.

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Creating such competitive advantages in agriculture would be alternative way out off

for the regional trade and competition hook for Thailand and some Southeast Asian

nations when the loosing manufacturing jobs to China scenario is inevitable. Even the

conventional idea of business management and economics associate agriculture with a

poor country, but there are some leading nations around the world that their key

competitiveness lays on this traditional sector; such as Australia, Denmark, the

Netherland and New Zealand. Consequently, innovation in agricultural sector for

developing economies would shed a new light for the future Agro-Industrialized

nation.

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r

Reference: Thai language กนก ฤกษเกษม และ ลือชัย จุลาสัย “เศรษฐกิจการเกษตร : ระบบการผลิตพืช” ยุทธศาสตรการพัฒนาเศรษฐกิจ

ภาคเหนือตอนบน กรุงเทพฯ : ศูนยหนังสือจุฬาลงกรณมหาวิทยาลัย, 2544 ปญญภัทร ธาระวานิช “ขีดความสามารถในการแขงขันของสินคา เกษตร และอุตสาหกรรมเกษตร...สรางศักยภาพ

แขงขันในตลาดโลก” เกษตรทรรศน ฉบับที่ 6 เดือนมกราคม 2541 ปญญภัทร ธาระวานิช “กุงป ‘ 42 : เผชิญปญหาทั้งการผลิต และตลาดสงออก” เกษตรทรรศน ฉบับที่ 18 เดือน

มกราคม 2542 ผาสุข พงษไพจิตร “พัฒนาการอุตสาหกรรมและพัฒนาการเศรษฐกิจประสบการณของ เกาหลีใต บราซิล ไทย”

กรุงเทพฯ : โครงการตํารา ลําดับที่ 37 ศูนยบริการเอกสารวิชาการ คณะเศรษฐศาสตร จุฬาลงกรณมหาวิทยาลัย, 2541

วิชิตวงศ ณ ปอมเพชร “พระบาทสมเด็จพระเจาอยูหัวกับปญหาเศรษฐกิจของประเทศไทย” กรุงเทพฯ : สํานักพิมพแสงดาว 2546

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