Agriculture 4.0

Overview – Agriculture 4.0

Thailand has been focusing on strengthening their economy with research and development, creativity, innovation and investment programs. Thailand 4.0 is the latest development model that the government aims to give way to pulling them out of the middle-income trap.

One of their focus of Thailand 4.0 is their Agriculture sector which has a big role to their economic growth and to promote and strengthen its rich resources both for local and international aspects. Other than being one of the major exporters of rice in the world, Thailand’s other agricultural commodities include sugar, fish, canned tuna, pineapples, rubber, grain and frozen shrimps. Almost 40% of its people work in the agriculture division and most of the local farmers are used to traditional farming methods for hundreds of years. These methods have been developed and little by little they adopted into a more innovated way using machinery for more productivity. Agribusiness firms both local and foreign played an important role in Thailand’s development in the agricultural sector. Because of the better resources of technology, funds, and knowledge than the farmers and other groups in the industry, they become the innovators and pioneers in the business.

The government is seeking more ways to improve and give way to foreign investors to make Thailand 4.0 and Agriculture 4.0 more feasible. Multi-stakeholder partnership projects and investment programs that will bring together the non-government organization, companies, the government, universities, and farmers will be the way for technological transformation that will also provide access to shared information, technology, finances and markets. This kind of projects will play an important role of transforming Thailand’s agricultural progress.

BOI Promotion Criteria for Project Approval

There are three BOI criteria for project approval: development of competitiveness in the agricultural, industrial and service sectors; environmental protection; and minimum capital investment and project feasibility.

Under development of competitiveness in the agriculture, industrial, and service sectors:

  1. The value-added must be at least 20 percent of sales revenue (except for electronic products, agricultural produce, and coil centers, all of which must have value-added of not less than ten percent of revenue)
  2. Modern production processes and new machinery must be used. If old machinery is used, its efficiency must be certified by a reliable institution and BOI’s approval must be obtained
  3. A project with THB 10 million of capital investment must obtain a certification, such as ISO 9000, ISO 14000, or similar international standard certification within two years from the full operation start-up date, otherwise, the CIT exemption will be reduced by one year.

For the environmental protection:

The BOI will consider the proposed project location and what will be the type of pollution treatment needed.

Foreign Shareholding

Project in agricultural, animal husbandry, fisheries, mineral exploration and mining, and other service businesses under List One of the FBA (B.E. 2542), Thai nationals must hold shares with a total of at least 51 percent of the registered capital. Foreign investors can hold a majority or all of the shares in promoted manufacturing projects stipulated in List Two and List Three of the FBA (B.E. 2542).  Under certain circumstances, the BOI may set the maximum and the minimum for foreign shareholding in some promoted projects at the level it deems appropriate.

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