Recently, seven John Deere Thailand employees and a local dealer ventured to the Det Udom district of the Ubon Ratchathani province to meet farmers and to gain a better understanding of the value chain of rice production and some of the farming practices that are utilized here.
Approximately 600 kilometers from Bangkok, and tucked away in the lower northeast region of Thailand, the farmers primarily grow rice, rubber tree, and Cassava. Most divide their farmland into separate parcels where they also plant and grow organic rice and a mix of other crops.
The John Deere team traveled with Mercy Corps, a global development organization that empowers people to survive through crisis, build better lives and transform their communities for good. John Deere and Mercy Corps joined forces in Thailand, united in the belief that smallholder farmers are key to breaking the cycle of global hunger and poverty, and working together to improve the lives of smallholder farmers in southeast Asia by connecting them with the resources they need to grow more food and earn higher incomes. This volunteer project in Thailand was the first time in our company’s history when employees, a dealer, and a development organization came together to learn more about and experience smallholder farmer needs.
For three days the group spent time with local producers, studying their local farming methods and exploring possible opportunities for future projects that could benefit the farmers in this region. During this time they visited five farms, a farm cooperative, and rice mills. While speaking with individual growers they were able to closely examine production practices and discuss some of the challenges that farmers here face, especially in regards to marketing their crops. The farms they visited ranged in size from 6 to 10 acres.
Access to mechanized machinery is limited
During the visit, the group learned that currently there is no existing rice marketing program, and that farmers have only limited access to mechanized agricultural machinery. This makes it difficult for them to grow premium crops such as organic rice. Knowing that 90% of the world’s rice is produced in China, Thailand, India, and Indonesia, farm equipment manufacturers like John Deere are taking note. Last fall in Bangkok, we introduced the new 3036E, a small, lightweight, 36-horsepower tractor specifically developed for rice growers in the Asian marketplace.
Besides access to mechanized equipment, farmers told the volunteer group that operating loans and low interest loans for farm equipment are also not readily accessible to them. In addition, producers here are completely reliant on rainfall to raise their crops. If irrigation was more readily available, the farmers explained that they could more consistently produce greater yields, even during dry periods. The farmers also acknowledged that better record keeping could ensure improved tracking of yields and revenue, and would benefit them.
“Most producers in this region do not track their crop revenue or expenses and do not utilize profit and loss statements,” says Supranee Eksataporn, a participant and tactical marketing manager for John Deere Thailand. “Loans come from the Bank for Agriculture and Agricultural Cooperatives (BAAC).”
Farmer co-ops could provide assistance
To help overcome their challenges the growers are considering establishing farmer cooperatives. Once established, cooperatives could grant monetary loans and offer educational resources to benefit their members. In addition, cooperatives could become a central collection point for unmilled rice and then act as a seller to the rice mills as needed. Eksataporn says establishing cooperatives that would be managed by a board of farmers could provide market sustainability for crops like organic rice that are grown in the region.
Currently, the organic rice prices here are very low, or are the same as non-organic rice, says Eksataporn. “There is no premium being paid because there is no developed market for organic rice in this area,” she says. If the markets can be properly developed, she suggests that organic rice production could offer the producers they visited with, a more sustainable crop option compared to growing non-organic rice.
Sustainable markets are not the only obstacles facing these organic rice growers. Specialty crops require specialty fertilizer to produce good yields. Currently, Small and Micro Community Enterprise (SMCE) purchases the necessary fertilizer ingredients, then mixes and sifts the ingredients to form the finished fertilizer pellets. Eksataporn says these pellets are then sold to farmers who apply the fertilizer to their organic rice fields in an effort to boost crop yields. According to the farmers this practice is working and it’s less expensive for them.
SMCEs are small groups of at least seven people interested in the same business activity. The group formally registers to get together to do business but they are a technically not a legal business entity. Business examples include marketing agricultural products, and providing various community and financial services.
Rice harvest practices are varied
When the rice fields are ready for harvest, farmers typically hire a sub-contractor with a combine to harvest their crop. However, some growers that the group met are still harvesting rice by hand, which is slower and more labor intensive. This was something the volunteers experienced firsthand on the day two of their trip when they went to the field and helped with harvesting the rice.
“We were very tired and lost a lot of sweat,” Eksataporn says about their long day in the rice field. The rice was laid on the ground making it more difficult for the group to handle without straining to do so. The next step after harvest involves getting the rice to the mills.
Rice mills in the surrounding area send trucks to the fields to haul the unmilled rice back to their respective mill. During harvest, a typical mill in this region receives a bank loan to purchase unmilled rice from farmers and to keep it in storage. Unmilled rice is stored at 16 degrees Celsius with a relative humidity of 28% to prevent weevil infestations. This type of storage requires specialized cooling equipment like that of one of the local mills that imported their rice-cooling air conditioners from Germany and Spain.
After milling, the rice is then sold to distributors that include CP All Public Company Ltd.; Asia Golden Rice Co., Ltd.; Tahi Lee Agriculture Co., Ltd.; and Siam Grains Co., Ltd. “These distributors then export the premium milled rice to U.S., and European markets,” Eksataporn says.
The Thailand government is also providing assistance to the farmer group that they visited with in this region according to Eksataporn. One small rice mill they toured was equipped with a rice milling machine that was donated by the Thailand government. Although the farmers here say they appreciate the equipment donation they also expressed concerns to her about the lack of a long-term plan for the maintenance and repairs of the donated machine.
Growing Rice in Thailand
Rice farming in Thailand from prior to planting through harvest.
Growing Rice in Thailand
Future volunteer programs
In the future, Eksataporn hopes that volunteer groups may be able to offer educational resources and other types of assistance to help further develop organic rice markets in this region. One reason for this is the world’s growing population and demand for food. According to the United Nations Department of Economic and Social Affairs, global agricultural-output will need to increase by as much as 70%, to meet the food demand of a projected population of 9.7 billion people by 2050.
“We work to enable farmers in developing countries, such as Thailand, to boost their agricultural productivity,” says Mara Downing, director of global brand management and corporate citizenship for John Deere. “This is accomplished by offering equipment such as the 3036E tractor, and also through our citizenship work that aspires to transform under-resourced agricultural communities in developing countries through distinctive and sustainable solutions for world hunger. Our employee-volunteers are instrumental in making these programs a success by offering assistance in the areas of farmer training and value-chain enhancement. It’s part of our on-going commitment to those who are linked to the land.”