Financing Sustainable Rice in Thailand

Srijakpat Chalermchai, Agriculture and Food Cluster

Thailand aims to promote climate-smart and sustainable rice farming practices for enhancing farmer’s ability to adapt themselves to more frequent droughts, while helping reducing gas emissions harmful to climate change. 

Innovative finance partnership is needed for securing the future of sustainable rice cultivation in Thailand, rice experts say.

Up to 50 participants from government and international organisations and private sectors recently met during the virtual roundtable discussion on the topic “Financing Sustainable Rice in Thailand”

Hosted by the Sustainable Rice Landscapes Initiative (SRLI) in collaboration with the Just Rural Transition, the World Business Council for Sustainable Development (WBCSD), Sustainable Rice Platform (SRP), Food and Agriculture Organization (FAO), United Nations Environment Programme (UNEP), International Rice Research Institute (IRRI) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, the aim of the 2-hour forum is to bring together rice experts and stakeholders to share their views and insights on financing rice landscapes and identify innovative yet suitable solutions to pushing forward sustainable rice cultivation in Thailand and the region.

A Roundtable Discussion on Financing Sustainable Rice in Thailand

Nowadays, the agriculture sector in Thailand represents only 6.3% of the country’s gross domestic product (GDP) where the rice sector accounts for 13%. Among the current challenging issues, Thai Rice Department provides a budget for rice research and extension which is not only to meet consumer demand or food security concerns. There has also been responding to climate change through the risk reduction measures for rice cultivation in both the support of financial instruments and non-financial instruments. For example: subsidy for laser land levelling (LLL) cost and insurance premium, carbon credit and SRP product price support, structural investment, as well as the supporting activities and SRP standard rice promotion.

Dr. Apichart Pongsrihadulchai, Advisor to the Director, General Rice Department of Thailand, speaks on the topic of Climate Change and Rice Farming with a Focus on Financing Needs and the Climate Financing Infrastructure in Thailand.

Dr. Apichart Pongsrihadulchai, Advisor to the Director, General Rice Department of Thailand
“Whenever we talk about a new practice, the farmer always asks whether they will get a higher selling price…it is difficult to control the price in this highly competitive market. That is the reason why we have to address cost reduction and valuation,” said Dr. Apichart.

The Thai government has been working for over a decade to introduce policies on tackling financing needs for improving infrastructure in the agricultural sector and supporting smallholders on efficient rice cultivation regarded as the country’s major crop.

In cooperation between the department and GIZ, Thai Rice (Nationally Appropriate Mitigation Action) NAMA projecthas accomplished in bringing transformational change to over 100,000 Thai farmers in six central provinces. Approximately 40% of them have so far could access low-interest rate financial support programme enabling them to invest in innovative agricultural technologies and equipment for LLL regarded as one of the key methods to help farmers increase rice farming productivity and efficiency.

Narawadee Modenuch, Research and Sustainability Manager, OLAM
“Many companies have sustainability programmes in place. However, to achieve a greater impact on a greater scale, we must go beyond what is currently being done and reimagine a better system to meet the nutritional needs of the population,” said Narawadee Modenuch, Research and Sustainability Manager, OLAM.
OLAM has been implementing the SRP indicator into the company’s supply chain since 2015. Speaking during the session, Ms. Narawadee said OLAM worked with GIZ Thailand and Thai authorities through the Market-Oriented Smallholder Value Chain (MSVC or BRIA II) project to improve the livelihood of smallholder farmers and introduce the low-emission rice farming practice. After 6 years of implementation, the project could help farmers reduce nitrogen and phosphate usage by over 30% and 60%, respectively, helping to mitigate GHG emission and reduce the fertilizer run-off into local freshwater bodies, while cost reduction and boosting yield, leading to an income increase of over 10%, she added.

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