January 29, 2018
CPF registers as farming contractor with Thai government
Charoen Pokphand Foods PLC (CPF), one of 87 farming contractors in Thailand, has completed registration under the newly-enacted Contract Farming Act.
Aside from compliance with the law, the company vows to maintain leadership in the livestock industry through a first of its kind insurance system for its small-scale contract farmer. This system enhances the company's more than 5,000 contract farmers' sustainability.
Narong Jiemjaibunjong, CPF's senior vice president, announced the complete registration under the law which demands the registration of all farming contractors with the Agriculture and Agricultural Cooperatives Ministry.
"Today, CPF is one of 87 Thai contractors who has assisted farmers and supported the agricultural sector. CPF has been already registered as a farming contractor and completed the prospectus as required by Thailand's law," Jiemjaibunjong said. He added that CPF's 5,960 farming contractees engage in chicken and swine farming. 60% of them has been doing business with CPF for over 10 years.
Aside from complying with the law, CPF is the first livestock company setting the goal of managing risks for income-guaranteed small-scale farmers whose output is fully supplied to the company. Believing that risk insurance will support confidence, stability and sustainability, CPF will extend the insurance scheme to cover farm structures and equipment in times of disasters.
"Farmers operating with loans are normally required to insure their structures and equipment for eight years, but most of them do not extend the insurance after the loans are paid off. CPF is shouldering this risk on their behalf for their own stability," Jiemjaibunjong added.
The insurance scheme will not cover large-scale farmers who enjoy price guarantees. These farmers, registered as business enterprises, earn high income and are able to shoulder their own risks.
CPF has improved its contract farming agreement in line with UNIDROIT principles of the International Institute for the Unification of Private Law. It is thus able to set best contract farming standards by which farmers are treated as business partners and develop with the company.
CPF initiated the contract farming scheme in 1975 to support small-scale livestock farmers by equipping them with farming technology and knowledge.