For many years I had been waiting for a visit to Thailand. I heard about its all-round development, especially in the agricultural sector, and thus wanted to see the land.
In November, my dream came true and as part of an eleven-member Bangladesh team I went to that country to attend an international seminar with the theme "Replication and pilot testing of risk management strategies and tools in agricultural lending for smallholder farmers, traders and entrepreneurs". It was an exposure visit sponsored by IFAD (International Fund for Agricultural Development) and supported by APRACA (Asia-Pacific Rural Agricultural Cooperative Association) project. APRACA is a regional project on enhancing the access of poor rural people to sustainable financial services through policy dialogue, capacity-building and knowledge-sharing in rural finance. Representatives from Bangladesh Bank (BB), Microcredit Regularity Authority (MRA), Palli Karma Sahayak Foundation (PKSF), ASA and BRAC attended the event. I have participated in the seminar as a BRAC participant working with the farmers development project Borga Chashi Unnyon Project (BCUP) funded by BB.
In Thailand, the Bangladesh team had the opportunity to get acquainted with many activities of Bank for Agriculture and Agricultural Cooperative (BAAC) at Bang Beng district in Chonburi province and Khlong Luang in Pathum Thani province from 17th November to 20th November, 2014. We were surprised to see the progress in the Thai farmer's development, the agricultural market cooperative system and the value chain marketing process. BAAC covers almost all 95 per cent of the total farm households in Thailand (Source: www.baac.or.th).
During the trip we were able to learn about how we can practise the Thai style of work in Bangladesh. It could be carried out either by government organisations or NGOs, or through a collaboration of the two parties for the sake of agriculture, especially targeting small tenants and marginal farmers. For smooth lending of money all kinds of banks, financing institutions and private companies preserve the national identification numbers of all Thai farmers. If anyone goes to any lending organisation to borrow money, the officials concerned can identify the borrower's status. Thus the system operates with a harmonised national database. But in Bangladesh, borrowers can take loans from more than one organisation at a time, leading to financial complications between borrowers and lenders. In Bangladesh, we have the National Identity Card (NID) which can be used in various activities of our life. If the Thai style of a database could be introduced in our country, it would check many financial irregularities.
In Thailand, BAAC has many deposit projects (Muslim Pilgrim Scheme, periodical and non-periodical saving deposit system for all levels of people etc). Banks disburse coupons to the clients as per their deposit balance. The banks encourage savings by promoting 'lucky draws' every six months at district and nation levels. They award cash, cars, motorbikes, domestic goods etc. Encouraging the Thai people's savings deposit habit is a pragmatic way of attracting them to sustainable socio-economic development process. We can take up these kinds of schemes in Bangladesh. Â
BAAC controls and provides support to the Agricultural Marketing Cooperative (AMC). AMC supplies quality seeds, fertilisers and pesticides, financial and technical supports for agricultural production; and facilitates collaboration between factories and wholesale markets to provide the optimum price for the agro-products through a responsive value chain process. After harvesting agro-products, the farmers process them into many grades and sell them in markets. Their storage management is also directly controlled by BAAC. BAAC plays a vital role in maintaining cordial relationship among farmers, producers and consumers through AMC. Moreover, BAAC provides financial support to AMC to help produce agro-based processed foods and sell them in the national market. With backing from BAAC, AMC supervises the agro-product grading systems, price tagging on the goods and laboratory testing system before marketing. Bangladesh does not have a financial institution like BAAC. The country has two specialised banks (Bangladesh Krishi Bank and Rajshahi Krishi Unnyon Bank) for agriculture, both of them being run by the government, and a considerable number of commercial institutions and NGOs. Bangladesh Bank can play a vital role in setting up institutions like AMC. Government organisations, NGOs and other relevant stakeholders can also take initiatives to assure farmers of fair price of agricultural products by a controlled value chain and marketing policy. Thus farmers can get their proper share of profit, which is now mostly being enjoyed by the middlemen.
In Thailand, farmers enjoy the crop insurance policy. The agricultural department suggests people to produce crops, which are suitable for a specific region, with the help of meteorological statistics. Disaster-affected farmers get subsidy right after the agriculture department conducts surveys and submits their results to the provincial governor. The Thai government and BAAC jointly pay insurance claims. Disaster-hit farmers get soft loans, and they reschedule their outstanding ones. Rice, maize and other crop producers get crop insurance facility. In Bangladesh, we can provide the facility immediately to the livestock sector, and later it may be provided to rice and maize cultivation in some areas as a pilot programme.
BAAC has 'funeral associations', which consist of BAAC beneficiaries and also the people out of its periphery. As per the funeral regulation, members subscribe a fixed premium every year as per their age-groups. If anyone dies after giving a certain premium, inheritors will get the full payment of policy (what the person has deposited; and the remaining amount to be paid by all the association members). It is executed by a funeral association executive committee. In Bangladesh, BRAC provides insurance policy of grants to its borrowers from its own fund without taking additional premiums. It gives Taka five thousand for its clients' funeral purpose immediately to their nominated persons, and waives Taka twenty thousand in outstanding loans after investigation by BRAC's local management. Coming to premium-taking system as a form of welfare which is run by a few organisations, irregularities are detected too. Sometimes, relatives of dead persons want to avail support of two or more non-government organisations at a time. It is a malpractice and is occurring due to the lack of national database system and also less integration within the lenders and borrowers.
There are many insurance companies working in Bangladesh. But they do not cover the farmers in their project areas focused on agriculture and aquaculture. They even have no plan for this in the future. Bangladesh Bank has some policies in favour of the farmers (National Agricultural Policy -- NAP) saying banks and financial institutions have to spend some portions of their lending in agriculture. But, practically, the institutions have less special support projects for farmers and they are making allies with NGOs. The government may take initiatives to provide insurance supports to promote farmers' development.
Thailand is now standing on three pillars of development, which are manufacturing, agriculture and tourism. Many international companies are investing in the manufacturing sector. Thai people are educated by around 93 per cent. Only 3 per cent unemployed educated people are there, and their per capita income is about fifteen thousand US dollars. Many tourists from all around the globe visit Thailand every year. Security in Thailand for tourists and natives are high. Shopping malls, hotels and easy transport systems are available everywhere. People are cooperative and hospitable. In Bangladesh, we do have many tourist spots. But the security, transportation, accommodation and safety measures are not equal to the international level like Thailand.
The Bangladesh team has visited many manufacturing plants, shopping malls, cultural and historical sites in Thailand. They seem to be more patriot than us as they prefer not to speak English which many Thais know well. The visit has enabled us to know about what the Southeast Asian country has achieved, especially in 1985-1997. They are fast coming up, despite some jolts. The Thais are committed to standing firmly in the ASEAN forum.
We have a lot of opportunities to make Bangladesh a fast-emerging country with its existing resources. To do so, national integrity, patriotism and political commitment to socio-economic uplift are the only prerequisites.
The writer is Senior Regional Manager, BRAC Microfinance Programme (Borga Chashi Unnyon Project, BCUP).
Email: abbasuddinmolla@gmail.com
Agricultural development in Thailand
Md Abbas Uddin Molla | Published: December 27, 2014 00:00:00 | Updated: November 30, 2024 06:01:00
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