Agriculture 4.0 – Thailand’s superfood

Apart from being one of the major exporters of rice in the world, Thailand’s other agricultural commodities include sugar, fish, canned tuna, pineapples, rubber, gr, in and frozen shrimps. Currently, almost 40% of its people work in the agriculture division, but the agriculture sector accounts only for 8-10% of Thailand’s GDP. This disproportion shows the urgent need for improvements.

Most of the local farmers are used to traditional farming methods for hundreds of years. These methods have been poorly developed and only little by little they adopted into a more innovated way using machinery for more productivity. The current non-smart system can’t feed Thailand in the future.

Agribusiness firms, both local and foreign, play 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.

Smart agriculture, smart farmers, superfood

During the last years, Thailand has been focusing on strengthening its 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 pull them out of the middle-income trap.

One of the focusses of Thailand 4.0 is the agriculture sector to promote and strengthen its abundant resources both for local and international use. Agriculture 4.0 aims to increase yield per rai by reducing inefficiencies, water consumption, fertilizers insecticides, and other chemicals and harmful effects on soil, animals, and people. Thailand is the kitchen of the world.

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 organizations, companies, the government, universities, and farmers shall be the way for technological transformation that will also provide access to shared information, technology, finances, and markets. This kind of project will play an important role in transforming Thailand’s agricultural progress.

Criteria for farm investments

Project in agricultural, animal husbandry, fisheries, mineral exploration, and mining, and other service businesses under List One of the FBA, 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 shareholdings in some promoted projects at the level it deems appropriate.

Under the Foreign Business Act, foreigners are strictly prohibited from operating rice farming, plantation, or crop growing, livestock farming, and forestry and timber processing from a natural forest. Foreign companies require specific investment promotion by the Thailand Board of Investment to carry on such businesses.

New BOI investment promotion

• Production or services in the agricultural sector, e.g. production of tracking, monitoring or control systems to regulate resources (water, fertilizers, pesticides). Tax holidays will be granted for five years without any cap.
• Measure to upgrade agriculture industry towards international standards, e.g. Good Agriculture Practices (GAP), Food Safety Management System (ISO 22000) etc. Tax holidays for three years, max. 50 % of the investment capital. The application must be submitted until December 31, 2020.
• Promotion of local communities in certain local areas, e.g. production of organic fertilizers, nano-chemical fertilizers, organic pesticides, plants and animal breeding, quality control, packaging and preservation of fruit and vegetable, manufacturing or preservation of food and beverages and trading center for agricultural products.