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Learning Route

Strengthening the Role of Agricultural Cooperatives to Address theChallenges and Opportunities of the ASEAN Economic Community for the

Benefit of the Smallholder Farmers

A case study on the experience of the

Khao Kichakood Agricultural Cooperative Ltd.

Chanthaburi Province, Thailand

This case study has been prepared by Mr. PichetNanta for the Learning Route on AgricultureCooperatives in the ASEAN. It is based on interviews,field visits and secondary information provided byKichakood Cooperative, the Cooperative PromotionDepartment and the Cooperative Academic Instituteof the Kasetsart University. Thailand, March 2016

Thailand and Philippines, March 28 – April 3, 2016

A case study on the experience of the Khao Kichakood Agricultural Cooperative Ltd.

2Strengthening the Role of Agricultural Cooperatives to Address the Challenges and Opportunities of the ASEAN Economic Community for the Benefit of the Smallholder Farmers

Thailand and Phillipines, March 28 – April 3, 2016

I. Overview: Kichakood Agriculture Cooperative Ltd.

A. Background on agriculture production and fruit production in Chanthaburi

Chanthaburi Province is situated on the east coast ofThailand. The province covers 6,388 sq. km. Thegeography ranges from forests and mountains, highlandsand lowland areas near the Chanthaburi River and thecoast. Forests make up 30 percent of the whole province.Bangkok is approximately 245 km. away. The majority ofthe population is made up of farmers and fishermen. Thepredominant religion is Buddhism.

Agricultural production represents the most significantpercentage of the province’s 2012 GDP. That year itrepresented some 56,262 million Baht, equal to 55.76percent of the GDP. Furthermore, agriculture as a portionof the GDP has been continuously increasing in recentyears. The main agricultural production sector is the fruit-bearing tree industry. The most popular species grown aretropical fruit trees, pepper and Parὰ Rubber trees.

The most common tropical fruit tree species are the Mangosteen, Durian, Salak and Rambutan. Theregion has the perfect climate to produce high-quality tree fruit, particularly the Durian, a round fruitwith a spiky exterior and notorious aroma. Chanthaburi Province also produces the largest share ofproduce at the national fruit market. Fruit is harvested from April to June every year. However, theannual harvest amount depends on climate. For example, if there is a lack of rain or non-continuousrainfall, production numbers suffer and less fruit is brought to market.




B. History of the Kichakood Agriculture Cooperative

The Khao Kichakood District

The Khao Kichakood district is in the northern section of the province but was formerly within theMakham district. The district has five sub-districts and 44 villages. The geography encompasses bothplateaus and mountains. The district has a national park, located in the east.

Timeline

Since its registration in 1994 the Cooperative has experienced several crises as well built longstanding synergies. Throughout the time until today, resilience and innovation have become twomajor sustainability factors, as well as active membership and partnerships with private and publicstakeholders. Here the cooperative members highlight some of their milestones:

1994 – 1997 The Khao Kichakood Agricultural Cooperative Ltd. registers as a Limited Cooperativeunder the Cooperative Act, on September 9th, 1994. It represents 21 groups, 408 farmers andmembers, and has 34,270 shares, valued at 342,700 Baht.

1997 – 2005 The Cooperative receives 2.3 million Baht in provincial government funding to set up anoffice. The office was officially opened on March 1st, 1999., only two years after.

2005 - 2007 As production costs increase and retail prices decrease, the Cooperative struggles.Farmers become indebted. Around the same time the government encourages farmers to cultivatethe Parὰ rubber tree and the Oil Palm tree. Many farmers begin to grow Palm trees. From this crisis,the farmers come together to improve the quality of tree fruit production. The organization meetswith Cooperatives Academic Institute from Kastetsart University (CAI) and start to partner in orderto find a solution. The partnership idea was supported by the Thailand Research Fund (TRF). Theresearch determined the viability of a business model for the cooperative based on the Value Chainapproach. As this is one of the first cooperatives using such approach, with time became known asthe Khao Kichakood Model.

2010 – 2013 The Khao Kichakood cooperative is honored as the Most Valuable AgriculturalCooperative from Agricultural Cooperative Affairs. The Kichakood Model develops more fully and isapplied widely across other agricultural cooperatives.

The Living Learning Center was established in order to speed up the conditions for the new marketsdemands. The Center curriculum includes as well integrated farming system skills, which is atechnique to transfer the accumulated know-how to the next generation of farmers (see SuccessorGroups). The Center provide training services as well to others, in total, counting national andinternational visitors, approximately 2850 people from over 50 organizations have received trainingand assistance at the Center.

2014 – 2016 The Cooperative supplies 8,500 tons of fruit throughout Thailand and to internationalmarkets, at an estimated value of 196.2 million Baht. The markets continue to expand its demand forquality fruits. For the farmers in Kichakood this brings stability to the families and honor to theirwork.




About the Khao Kichakood Agricultural Cooperative Ltd.

Kichakood has a membership of 1,404 farmers, 15 Cooperative Committees, ten officers and fivepart-time employees.

VisionTo be the organizational center for agricultural production and business development workingtowards the stability and happiness of farmers and members.

Goals1. Cooperative members participate in organization activities and promote Cooperative business.2. The quality of agricultural products from members is guaranteed and generates a higher selling

price at market.3. Cooperative business is managed effectively and efficiently and shepherds the completion of

organizational and community activities.4. Cooperative management system contributes to efficient operations.5. Cooperative members and their families live healthy, positive lives.

Mission tasks1. Develop knowledge for Cooperative members and offices.2. Promote and develop production of the agricultural products of Cooperative members and

maintain high quality standards, while also building a business network.3. Strengthen the business operation for both the organization and the community.4. Develop a operational manual and data system5. Promote wellness and healthy living among Cooperative members.

Organizational Chart




II. Kichakood: An agricultural cooperative at the service of the development of ChanthaburiProvince

A. Kichakood´s participation in agricultural markets

Cooperative members realize the importance of setting marketing goals, creating opportunities in avariety of markets and expanding distribution channels. The market networking process has beendriven by the Quality Fruits Production Groups, which aim to sell the product together. Officers inthe cooperative officers collect data and develop relationships, as well as make connections withpotential domestic and international markets.

Domestic Markets have three channels; 1) Richfield Fresh Fruit Co., Ltd. distributes high-qualityRambutan. The Cooperative is responsible for production management and the quality control.Richfield is a distributor to retailers and supermarkets such as Carrefour, the supermarket chain. 2)Chanthaburi’s Chamber of Commerce expands access to all regional markets in the country. TheCooperative Union supplies Rambutan, and distributes to provinces like Khon Kaen, Mukdahan, BuriRam, Tak and Amnat Charoen 3) Muang Khlung Agricultural Cooperative Ltd. and MakhamAgricultural Cooperative Ltd. build upon the Cooperative Union’s network to distribute high-qualityMangosteen and Rambutan to retailers like Tesco, Lotus, Makro and Big C Supermarkets.




Access to International Markets is through several trading companies, with which the CooperativeUnion has signed contracts prior to purchase of goods. Terms and conditions of the agreement arediscussed and agreed upon by both parties. The selling price must be fair to the farmers. Theproduct has been exported to countries like Japan, USA, Brunei, China and Vietnam.

The Cooperative has also been trading with PK Siam Co., Ltd. which has helped build businessnetworks and facilitate exchange of knowledge about Mangosteen export trends in the Japanesemarket. The market volume is seen to be expanding. Additionally, the Cooperative Union hasimplemented a food safety and traceability policy for Mangosteen. Thus, the Japanese market canrely on the quality of the goods. The Cooperative Union has a marketing strategy called “BringingGood Quality and High Value for Customers.” All of the Cooperative Union’s farmers are aware andable to guarantee high-quality Mangosteen production according to the customer needs andJapanese’s import and export policies.

Sales of fruits by market sectorStatistics collected by The Department of Agriculture (April 1 to July 13, 2015)

Sales of fruit products by fruit type,Statistics collected by The Department of Agriculture (April 1 to July 13, 2015)




a. Good Agricultural Practices (GAP) Certification

The quality of fruit production is a market-driving factor. It is also at the heart of themanagement of the entire fruit productionprocess. And, farmers are a main factor indriving this process. A good product starts atthe very beginning of the cultivation processand lasts until the very end of the process;which results in high quality of fruit products forcustomers. The most effective process shouldinclude guidelines on food safety, pesticide use,efficient use of natural resources, and anagricultural system free of pollutants.

Cooperative Members should understand the whole process of fruit production. Good AgriculturalPractices (GAP) includes aspects like workplace safety, which would encompass issues around waterresources, farming areas, chemical storage, and farming implements. Areas need to be neat and tidyfor a safe workplace. These considerations will lead to better operations and cost management, aswell as improve the process surrounding pre- and post- harvesting of fruits, packaging, andtransportation to the local distributor. It will also involve visiting neighboring farms to exchangeknowledge and maintain good relations between Cooperative members, and provide follow-up tothe work process.

Key steps in the certification:

1) Technological training on fruit production techniques according to the Good AgriculturalPractices (GAP) protocol.

2) Visiting neighboring farms to follow-up with the work progress and encourage the learningprocess

3) Survey the production process and estimate fruit production levels in those areas4) Recording and collecting data for a marketing plan.

The Cooperative should pay attention to members and encourage them to keep a daily record ofproduction history. This daily record is valuable because:

1) Farmers are able to ensure safe work habits.2) Farmers can use the information to improve future production processes.3) Farmers will be able to track production costs and thus reduce costs of the next production cycle

based on the previous history.4) Farmers can trace their production history, which is very important for customer service and

building customer royalty. This can also help create opportunity for the expansion of marketingchannels.




Important elements in gsustainin the GAP standard are employee and individual awareness anddeveloping production data systems according to GAP quality management standards. These stepshelp the Cooperative members building the necessary knowledge for a successful compliance. This isa research project from the Chanthaburi Cooperative Promotion Department and was funded by theThailand Research Fund (TRF). The objective of the research was to help Cooperative membersunderstand the importance of recording daily observations in a log.

Techniques for data collection fall under four categories:

1) Recording data on production levels involves collecting basic information from allcooperative members such as the type of fruit they grow on the farm. This basic data will be used forforecasting prices and yield.

The process is divided into three stages; 1.1) General data and base production levels of Cooperativemembers; 1.2) Production costs in the previous year; 1.3) Analysis of the data for planning the nextproduction cycle and developing the marketing plan.

2) Recording production history involves recording all farming practices and farmer activities,identifying problems and noting obstacles, solutions and facts, and factors in production. This datawill be compiled and analyzed to develop a production and action plan for the next season,according to the context of each area.

The data also helps to determine the next investment plan, of which there are four steps; 2.1) Dataon post-harvesting, trimming, and watering plants; 2.2) Data on fertilizer, hormones and use of otherinputs; 2.3) Data on pesticide usage for disease, weed, and insects; 2.4) Analyze the data forevaluation of practical outcomes.

3) Recording the production situation includes the capture of information on the productionstage and weather (climate and rainfall) that impacts fruit production. The data will help forecastproduction levels and quantities for market.

There are three stages; 3.1) Production and weather data; 3.2) Analysis of data for productionforecasting; 3.3) Using data to plan harvests and marketing.

4) Recording sales will involve tracking sales of fruit products through different marketingchannels. Data points will include aspects like quantity and price. Data will be analyzed onmarketing positions and forecasting price ration in each period. Combining this information will helpimprove fruit production and planning.

There are three stages: 4.1) Track quantity of product sold and prices on each marketing channel;4.2) Data analysis and evaluation of the positioning and pricing; 4.3) Decision making for planningproduction according to market demands.

The collected data will help farmers analyze the position and pricing strategy in different saleschannels. Cooperative members can then divide the marketing channels into a main market andsecondary market. This will help them determine market goals. It will also help to plan fruitproduction with other Cooperative members. Famers have realized the benefit of productiondevelopment to meet standards, and market demands. The Cooperative Union will be the mainfactor that links farmers and members to other organizations. The Cooperative Union will alsoeducate famers with knowledge and skills to promote higher standards in farming.




B. Kichakood services to members and other farmers

1) Savings plan for Cooperative members, such as a basic savings account, a special savingsplan (Only allowed to deposit once per month).

2) Loan programs like the Uea Ar Thon Loan, which is funded by a business partner of theCooperative, Agricultural Cooperative Ltd. and a private agricultural retailer. The fund helpsCooperative members with the cost of inputs, like fertilizer and chemicals. The no-interestloan helps cooperative members and farmers to concentrate on the quality of the fruit andthe development of the fruit production process.

3) The Cooperative Union will gather and buy Rambutan, Langsat/Longkong and Mangosteenand act as a main distributor, intermediary and delivery service for the products to retailerslike supermarkets and department stores. Mangosteen will also be exported via tradingcompanies.

4) Provide low-cost production resources like fertilizer, hormones, gas, rice, and tools tocooperative members.

C. Kichakood´s best practices

The Cooperative Union understands that supporting farmers and members in productiondevelopment is a crucial part of driving the business forward. Their key activities consist ofexchanging knowledge with other members, keeping farms organized and always striving to developnew techniques, as well as supporting the production process with resources, to reduce costs. Thisoccurs with the encouragement of government and private enterprise which help farmers andmembers increase their marketing channels and keeping up-to-date with marketing trends.

This will help farmers and members develop their approach, skills and relevant knowledge. Farmersand members can then relay their knowledge and skills to the next generation of farmers. They canfeel confident and be proud of their job. And empowering the Cooperative Union leads to thecontinuing development of the group. The operational processes are as following;

Creating Business Networks to Achieve Quality Fruit1) Advance group knowledge, as well as the objectives, methodology and the cooperative’s values

to the next generation and encourage good relation between farmers and members. Memberswill feel the sense of belonging and ownership to the Cooperative Union.

2) Knowledge and learning, farmers and members should be educated in the relevant information,like marketing trends, transportation systems, harvesting techniques, etc. Farmers and membersneed to be aware and keep up with new technologies. Encourage the new generation toadvance the development of the Cooperative Union.

3) Planning encourages farmers and members to produce according to market demands. Farmersand members can implement marketing methodology, using techniques like a marketing surveyto determine market demand and price. This will benefit farmers and members to plan beforeproduction to ensure good prices for quality products.

4) Enhance the scaling-up of production by supporting farmers and members with money, tools,and other farming resources. This also includes helping farmers and members with theharvesting process, transportation and sales.

5) The Cooperative Union will also help plan a marketing strategy to increase marketing targets andopen up distribution channels.




Adding Value to Fruit Production1) Empowering the new generations with the wisdom of the members, and passing along the

objectives, methodology and the Cooperative’s values to the next generation. Members willthen feel a sense of belonging and ownership for the Cooperative Union, so that the nextgeneration inherits these values and passes them on. By promoting group participationactivities, we can create good relations between farmers and members. Finally, an agenda willbe set for an annual meeting so farmers and members can participate in Cooperative planningtogether and continue to operate towards the achievement of similar short-term goals.

2) Educate farmers and members by providing relevant information, like marketing trends,transportation systems, harvesting techniques, etc. The goal is to help them adapt to the currentglobal context of rapid change. Encourage members to produce only the best quality fruits, beself-sufficient and exchange knowledge and experience with other farmers and members.

3) Promote a food safety policy for farmers and members, in which they must be aware and canimplement Good Agricultural Practices (GAP) standard at their farms. Encourage farmers andmembers to participate in GAP, and submit to farm audits (Q-Mark). Above all, assure that fruitproduction is traceable, to ensure quality for customers and help promote access to marketingchannels.

4) Encourage members to understand and realize the important of doing daily record-keeping,which would include historical production, production and trade levels, etc. This information willhelp farmers and the Cooperative Union make joint decisions for production and marketing planfor subsequent seasons.

5) Encourage members to meet with other groups or members of the Cooperative Union somembers can exchange experience and skills. The Cooperative can follow up with theirproduction activities, and help members come up with solutions during the process.

6) Promote “learning by doing” for farm groups managing fruit quality development process andmarketing channels.

7) Promote a high-quality fruit project under Uea Ar Thon Loan; the loan is helping cooperativemembers with the costs of inputs like fertilizers and chemicals. The no-interest loan will helpcooperative members to concentrate on the quality of their fruit product, and has a potential todevelop the fruit production process.

8) Set up a meeting to encourage better relations between members and the Cooperative Union. Itwould also include a meeting with other cooperative members in Chanthaburi Province that theCooperative Union has built a network with, so they can plan marketing strategies together.

9) Visit to members by participants in the Cooperative Union, government officers, and businesspartners. The purposes of these visits are to generate suggestions on how to improve the fruitproduction process and marketing channels. Above all, this is an opportunity to buildrelationships among partners.

10) Enhance a network to bolster product distribution. It will be a shared network among theCooperative Unions of the province. In addition the Cooperative Union will also developrelations with the Rice Cooperative Union in other provinces.

11) Support groups engaged in cooperative production in order to promote high-quality fruitproduction and the exchange of knowledge. The Cooperative Union is at center of the networkconnecting all groups together.




Market Plan1) Cooperative members analyze basic information such as production levels and describe the

production scenario in their own farms. This would include basic information like the quantity offruit, available farming area, variety of plants, age and amount of plants. Then the farmer shouldbe able to forecast the production situation up until the fruits have been harvested and sold atmarket.

2) The Cooperative Union combines data, analyzes the marketing plan and helps membersnegotiate to find the best solution with their business partners. It would also include setting up adistribution area for their partners and members, and gathering fruit production. This includesfinding investors and loans to keep the business running for farmers and members.

3) Business Partners (Fruits Suppliers/Retailers) cooperative will help plan the marketing strategyfor each distribution channel.

Production Plan1) Farmers and members, after completing the basic analysis in their own farm (historical aspects

of production levels and cost), can determine costs and benefits. Then members can share theexperience with other members and the Cooperative Union itself.

2) Cooperative Union will then use this data for planning, and provide guidance on the productionprocess and loans.

3) Business Partners (Private Agricultural Retailers) can help the Cooperative Union to make anaction plan for farmers and members.

Stakeholders in the High-Quality Fruit Value Chain with participation of Kichakood Cooperative

Kichakood considers the Value Chain successfully developed when all stakeholders support eachother and actively engage in the knowledge and business networks. The Cooperative is the center ofthe network and links all farmers and members, and business partners, to improve the livelihoods of




farmers and members. Increasing income and decreasing debt will promote a lifelong learningcommunity within the Agricultural Cooperative Ltd.

To continue the Cooperative’s activity, the process must be open for everyone to be able to askquestions and ensure honesty and integrity. This will lead to the long-term development of thefarmers and members in the Agricultural Cooperative Ltd.

The four test areas are in the three sub-districts of the Khao Kichakood District and one sub-districtin the Makham District. The test will bring together theoretical knowledge, which is recognizable,and discrete knowledge, which is associated with wisdom and experience. Learning networks willhelp farmers and members share their knowledge with groups in their networks and businesspartners. This process will include the new generation of apprentice farmers, and other interestedparticipants.

1) Chak Thai sub-district Learning Center, Khao Kichakood DistrictFor the group in the Chak Thai sub-district, the production of Mangosteen is the main drivingforce. Topics of focus are; 1.1) High-quality fruit production for exporting under a GAPproduction quarantine; 1.2) Control and management of production costs; 1.3) Production andmarketing plans for the main crop (Mangosteen) and the secondary crop (Lady Finger Banana);1.4) Building the next generation of farmer and the transfer and inheritance of farmingknowledge.

2) Takhian Thong sub-district Learning Center, Khao Kichakood DistrictThe Mangosteen production group of the Takhian sub-district is a learning center for holisticbusiness management. The main topics are; 2.1) Selling the products according to theCooperative Union standards; 2.2) Management and control of the gathering and screeningareas; 2.3) Identifying marketing channels for Mangosteen production; 2.4) Production planningaccording to market demands.

3) Pluang sub-district Learning Center, Khao Kichakood DistrictFor the group in the Pluang sub-district, the production of Mangosteen is also the main product.There are three stages; 3.1) Quality production management according to a multi-stage process;3.2) Analysis of comparative statistical data; 3.3) Daily data collection of production data andmarket information.

4) Makham sub-district Learning Center, Makham DistrictThe topic of this learning center is how to manage a year-round Crop Rotation System. It has thefollowing aspects; 4.1) A production plan and marketing plan for the main crop (Mangosteen)and secondary crop (Papaya); 4.2) The most efficient way to utilize resources to cultivate thesecondary crop.




II. Recommendations within the framework of the ASEAN Economic Community (AEC) 2015

A. Reflections by Cooperative members on AEC challenges and opportunities

The ASEAN Economic Community of 2015 seeks to drive market standards for all member countries.All goods can freely circulate which means money moves across regions, as does labor, services andinvestment. This will increase competitive abilities and member unity. It will enable countrydevelopment and moving forward together. It will also minimize the gap between developingcountries. Additionally, Thai business and investment communities will benefit from the labor,national resources, and goods from member countries through lower prices. Markets and serviceswill grow rapidly. Business partners and networking will be created across the region and empowernegotiating positions among each member. It will also cut logistics costs and Thai customers will beable to benefit from a variety of quality products and services, especially agricultural goods.

Challenges facing Thai Agriculture

1) Agriculture in Thailand has not seen much recent innovation and new technology. The results arelower production yields when compared to other ASEAN members. Furthermore, Thai farmershave not had the continuing education that allows them to incorporate new inventions andtechnology. And, Thai society is aging and the labor market is shrinking. Most of the agriculturalsector is seeing fewer younger family members interested in continuing the business.

2) Government policy towards Thai agriculture is unclear and has a lack of continuity. Some policyresults in interference in market flows, resulting in reduced potential for agricultural marketsand an inability to compete on the global market. At the moment Thai infrastructure, naturalresources and labor are costly, thus increasing production costs. This makes Thai goods moreexpensive than their neighbors.

3) And, outside investors from ASEAN countries and around the world are taking advantage of ouragricultural products, buying land and hiring Thai farm labor, either through cooperative jointventures or other forms.

Competitive analysis for the Thai agriculture sector and other ASEAN countries

Dimension Advantages Disadvantages

Production • Varieties of crops and livestock• Climate suitability for farming• Continuing agriculture research to improve plant

breeds• Good post-harvest technique

• Low Production Yield• High Cost of Labor

FoodProcessing

• Modern food processing techniques• High-quality of products oriented towards customer

needs• Varieties of products

• Thai production costs are higherwhen compared to other ASEANcountries. Examples of these cropsinclude Tapioca, feed Corn, ParáRubber Plant, and Oil Palm.

Marketing • In the geographic center of the region• Experienced business partners• Existing perception and reputation for high-quality

agricultural products

• Cost of transportation is high• Distribution is by intermediary

(Singapore)

AgriculturalCooperative

• Farmers are knowledgeable in agriculture and farming• Existing agricultural cooperative groups, and Small

and Micro Community Enterprises (SME)

• Lack of information about marketing• Majority are small organizations or

individual farmers.

Source: Opportunities for Thai farmers to survive in the ASEAN; http://www.aftershake.net/?p=400




So far, the impact from entering ASEAN in 2015 on overall fruit demand from Chanthaburi Provincesis low. Regardless, farmers and members of the cooperative will need to study market trends andupdate their understanding of competitor products to prepare them for the AEC. Farmers andmembers must be able to adapt to changing circumstances. The Agricultural Cooperative Ltd. mustsupport them by continuing to develop high-quality fruit products and improved productionpractices. Farmers and members must follow established protocols by each distributor or theimporting countries, because there will be different requirements for each market.

Farmers and members must also ensure they collect basic production data and marketinginformation. This data on fruit production will help in planning for the cultivation of both main andsecondary crops, and will help increase income and generate more revenue. Effective action plansshould be used to distribute products to domestic and international markets. And value must beadded to the Agricultural Cooperative’s businesses to operate sufficiently. The Cooperative shouldencourage farmers and members to participate in group activities thus ensuring long-lasting successof the learning community and the process. The most important part is building and exercising thenetwork between all cooperative unions so they can react to the supply chain management issuesalong the value chain.

B. Lessons learned and recommendations

Networking for selling the products has been a driver for the fruit production groups. Officers in theCooperative are collecting data and developing the network, as well as creating connectivity with thepotential markets both domestically and internationally.

The group producing high-quality fruit is the Agricultural Cooperative Ltd. The Cooperative willimplement a system that uses the most effective methods for collaboration to reduce the timeinvolved in the production process as well as the cost of production. Nowadays, the markets are veryattentive to the needs of the customer. The customer has become the priority for the producer.Some steps to take are the following:

1) The agricultural cooperative is the focus of efforts by the government and participating partnersof the fruit industry to support the new generation of farmers and members who have lessexperience in farming. New farmers that are entering the farming business now only seek quickprofits. So, when the market conditions change, they suffer. Additionally, due to a datedstrategy, farmers will sell products through a middleman and lose any negotiation advantage.This contributes to lost income and lost profit. The outcome is not worth the investment. Thisthen leads to a loss of profits on production and recurring debt.

Farmers are suggested to complete the following: 1.1) Follow good management practices at thefarm and utilize all parts of their land, encouraging themselves to change bad production habitsand improve soil quality in farmed areas, as well as reduce unnecessary production costs; 1.2)Grow the main crop together with the secondary crop, and study market trends and produce asper market demands; 1.3) Build learning networks within cooperative groups in order toexchange knowledge and experience, and thus improve their production processes. The goal is tohelp each other, and enrich the collective knowledge and skills of the cooperative groups forlong-term learning within the fruit farming groups.

2) Developing a Network of fruit production groups will encourage farmers and members tobecome aware of AEC and prepare themselves for AEC. The most important key is to worktogether and strengthen the internal bonds among members, Cooperative Union participants,business partners, and governmental and private sector actors. The Cooperative Union of Fruit




Producers began by sharing experiences and knowledge, thus increasing their self-awareness andthen sustainability. Research supports the idea of improving social welfare by sharing and helpingmembers of community live together in harmony.

3) The Government and the Agriculture Cooperative Ltd. should help to promote the businessmanagement of the fruit production group and empower cooperative members in the marketingand supply chain of fruit distribution. To minimize the impact and obstacles of an AEC market toCooperative members, the goal is to increase the quality of fruit while also giving something backto the environment and incorporate social concerns.

4) Help promote a planning system for gathering, distributing and trading products for theAgriculture Cooperative members. The purpose is to push the development process amonggroups as well as connections among the cooperative groups. Government should be supportingand driving this process. Ways to make this happen can occur by applying information,technology and innovative techniques to fruit production and processing, data collection,marketing and planning, and expanding market distribution channels.

5) Support logistics planning to minimize the cost of transportation, which is the main contributorto the end price of products. Cooperative Unions can build relationships and networks withlogistics companies, which could lower costs. Other logistics opportunities include the expansionof existing distribution channels, opening a new distribution channel in each region and creatingnetworks between the regional agricultural cooperative and the local one. This will help in thecreation of a “Cheap, Quick and Quality Product,” with lower transportation costs, quickerprocessing, and fresh, quality, fruit.

6) Promoting a business network includes building an image, brand and creating loyalty. It willpromote the participation of the producer, customers and business partners to build a loyalcustomer base and incentivize the continued production of high-quality of fruits for the market.

V. Annexes

a. Kichakood website in English: http://www.coopthai.com/kitchakud/b. Juthathip Pattarawat (2011). The development of cooperatives and fair trade. The ThailandResearch Fund (TRF): http://www.ace.coop/wp-content/uploads/proceedings/2012/Juthatip_Patrawart-abstract-25062012a.pdf.c. Champions in the Kichakood Story




CHAMPIONS IN THE KICHAKOOD STORY

1. Ms. Sasithorn WisetAge: 57Current Position: Chanthaburi Cooperative Development Department.Education: BA, Business Management, Rambhai Barni RajabhatUniversity, 2006Background:• 36 years at the Provincial Cooperative in Chanthaburi Province• Head of the research project titled: “Supply Chain Management –Fruit Value Chain”: Funded by Thailand National Research, October 2009

The main obstacle in business-based farming, is that farmers may lackplanning when arranging their cultivation areas. Thus, managing thecrops became difficult. In most cases farmers were eliminating the crops that had low profit. Thenthey cultivated crops that they believed provided higher profit at a high volume, without thoroughlyconducting research into the advantages and disadvantages of this strategy beforehand. Afterfarmers participated in a group discussion and exchanged experiences with others, attitudesregarding this method began to change. Hope surged for the next generation of farmers to have abetter life in farming. They imagined being able to implement new techniques to improve the fruitproduction process, farming and planning. Group discussion also helped two generations of farmersto meet and exchange knowledge and wisdom. The most important part of the group discussion waswhen they reached the conclusion that the key to high-quality production was to thoroughly recorddata from production, and base planning on the collected data.

2. Ms. Surang PoompothongAge: 52Current Position: Manager of Khao Kichakood Cooperative Ltd.Education: BA, Agricultural Economics, Ramkhamhaeng UniversityBackground:• Product Quality and Safety Management, Malaysia, 2008• The ASEAN Exchange Visit for Cooperative Personnel andLeaders, 2009• Workshop for Development of Leader of AgriculturalCooperative Group, Japan, 2009• Product exhibition and business negotiation, Peking, China,2011

The Khao Kichakood Agricultural Cooperative has about 1,400 members. The fruit projectencouraged cooperative members to develop and help each other as a team. The project alsohelped the Cooperative Union set goals for the agricultural extension. Some of the cooperative’smembers were placed into small groups, called Quality Fruit Production groups. These groupsconcentrated on high-quality product cultivation, and as a group they were able to negotiate withthe market and thus reduce their costs and earn more. They realized that the most crucial parts inthis process were self-development, being self-sustainable, being flexible and easily adaptingthemselves to a situation.




3. Mr. Wuttichai Prakobsap (Wut)Age: 31Current Position: The president of the Agriculture CooperativeSuccessors GroupManager of Khao Kichakood Living Learning CenterMember of Khao Kichakood Agricultural Cooperative Ltd.Education: BA on Business Management, Rambhai Barni RajabhatUniversity, 2006Background: Joined the cooperative as a member in 2006 Selected for a training scholarship in Japan, “Cooperative”

organized by JICA, 2015 Product:

Primary: Durian, Mangosteen, LongkongSecondary: Banana, Rubber

In the past, researchers have observed Cavendish banana production in the region. And from therearose the idea of growing bananas to grow in small farm with the primary crops. The Lady Fingerbanana was selected to grow with the Durian. Good production planning at this stage helpedfarmers to harvest crops when market had a high demand. Additionally, data collection in all areasbenefited the decision-making process. These secondary crops not only increased the income tofarmers, but it also generated job opportunities for the community throughout the year. Theconclusion is that a good understanding of modern technology with good management and planningpractices can help farmers effectively apply their knowledge to their farm, according to their fullpotential.

4. Mr. Preecha Puangpikul (Mod)Age: 31Current Position: An active member of the agricultural successor groupEducation: MA, Horticulture, King Mongkut’s Institute of Technology,Ladkrabang, 2010Background: Joined the cooperative as a member in 2011 Registered under his own brand, “Preecha,” in 2014Product:

Primary: DurianSecondary: Zalacca

Annex:

Kichakood Agricultural Cooperative Ltd. Membership

Update May, 2016

Source: Kichakoog Agri Coop Ltd. and Cooperative Promotion Department of Chanthaburi

Members per land size

Members per size

Land Size

In rai (from - to) 1 rai = 0.16 hectare

Annual Income

In Thai Baht (from – to) 1 USD = 35 THB

Main Crops produced

Small size member 5 rai

0.8 ha

10 rai

1.6 ha

<300,000 THB

8,500 USD

Durian

Medium size member 11 rai

1.76 ha

30 rai

4.8 ha

300,000 THB

8,500 USD

600,000 THB

17,000 USD

Mangosteen

Large size member >30 rai

> 4.8 ha

>600,000 THB

>17,000 USD

Rambutan

Membership by year and categories

Members /Years 1994-1997

2000 2005 2010 2015 2017 Approx.

Total number of Members

408 1,142 1,219 1,326 1,396 1,430

Small size Members

127 354 378 411 433 444

Medium size Members

208 582 622 676 710 727

Large size member 73 206 219 239 253 259

Women members 184 514 549 597 663 679

Youth (up to 35 years old) 18 49 53 57 60 61

127 354 378 411 433 444

208 582 622 676 710 727

73 206 219 239 253 259

0%

20%

40%

60%

80%

100%

1994-1997 2000 2005 2010 2015 2017

Small size Medium size Large size

Strengthening the Role of Agricultural Cooperatives to Address the Challenges and Opportunities of the ASEAN Economic Community for the Benefit of the Smallholder FarmersThailand and Phillipines, March 28 – April 3, 2016

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