June 22, 2020

 

Thailand's farm chemicals ban provokes US, Brazil protests; likely to affect feed supply

 

 

Thailand's move to ban two farm chemicals in early June could likely affect the local feed industry's feed supply and has now provoked protests from the United States and Brazil.

 

The pesticide ban might potentially curtail wheat and soy exports from the US and Brazil - a trade worth US$1 billion a year, based on United Nations data.

On the domestic front, the Thai food chain could also add tens of dollars to costs while slashing millions of jobs, according to one Thai industry estimate.

On June 1, weedkiller paraquat and insecticide chlorpyrifos were included in Thailand's hazardous substances list. The move led to another health regulation forbidding imported food product that contain residues of prohibited chemicals.

The import ban has been drafted pending comments from interested parties up to July 18 and will become law once published in Thailand's Royal Gazette. There is no apparent legal mechanism to derail the ban without first amending Thai health law.

In late May, the US and Brazil addressed Thailand about the ban in separate letters following the country's informing of the World Trade Organization (WTO) of the pending ban. Both the US and Brazil argued the lack of new scientific evidence for the ban - a requirement based on the WTO Agreement on Sanitary and Phytosanitary Measures (SPS).

In one letter reviewed by Reuters, Russ Nicely, Agricultural Counselor at the U.S. Embassy in Bangkok, expressed concerns that Thailand's action seems "to be more trade restrictive than necessary."

Most of Thailand's soybean imports are obtained from the US and Brazil. Last year, the country was the world's eighth and fourth largest importer of US and Brazilian soybeans, worth US$525 million and US$602 million, respectively, according to the United Nations Comtrade database.

The country also happens to be the tenth biggest market for US wheat, using millions of tonnes of wheat and soybeans each year to produce a range of products from cooking oil, noodles, to animal feed.

Thailand has justified its ban through Thai deputy agriculture minister Mananya Thaiset who reasoned the need to protect human health.

However, the banned chemical in question, paraquat, is also banned in the European Union and China. Brail is, in fact, prohibiting the use of the chemical later this year. Additionally, many studies have linked chlorpyrifos, which is banned in Europe and US state California, to impaired brain development in children.

 

Brazil and the United States had pressured Thailand to resume permitting imports of goods under Maximum Residue Limits (MRL) according to Codex, the international standards used for acceptable residue levels in traded food commodities.

Only last year, the US has slammed Thailand's plan to ban glyphosate, which is used in Bayer AG 's controversial weedkiller Roundup. While the ban eventually did not happen, Thailand went on to ban the other two pesticides.

Thailand's hardline approach against the import of commodities containing residues could affect around 10 million local farming households.

"Other chemicals are expensive and do far more damage to main crops than paraquat, while killing weed with less efficiency," said Sarawut Rungmekarat, an agronomist at Kasetsart University in Bangkok.

Thai agribusinesses fear the ban could cause disruptions within the domestic food chain, affecting related sectors including animal feed, livestock, fishery and food industries.

Furthermore, the Thai animal feed industry depends mostly on the import of five million tonnes of soybean and one million tonnes of wheat per year.

"If you cut our supplies today, we simply can't continue," Pornsil Patchrintanakul, president of the Thai Feed Mill Association, told Reuters.

"If we fall, everyone falls with us."

- Reuters