September 1, 2010

 

Thai agri sector needs to brace for tough Asean rules

 

 

With trade liberalisation on the Asean agenda to be fully enforced over the next four years, Thailand's agriculture sector faces a "tough trade" under the upcoming Asean Economic Community (AEC), Apichart Pongsrihadulchai, advisor to the agriculture minister has warned.

 

Thai farm goods will be facing tougher competition as the increase in non-trade barriers imposed by trading partners to protect their domestic markets would hamper exports.

 

"Thai farmers and enterprises, in order to survive, must focus on producing goods that serve complicated demands to ensure that they have a larger market share in Asean and the rest of the globe," said Pongsrihadulchai.

 

Today, Thailand is Asean's largest exporter of agricultural products with a market share of 18%. However, once investment is liberalised under the AEC, some sectors in the farming industry will be opened for Asean investors and manufacturers will be able to relocate to countries that have lower labour and production costs, and that is when Thai enterprises will see big changes in the farming sector over the next few years.

 

To survive, Thai farmers will have to boost the quality of their products, while enterprises will need to rapidly adapt so that they continue to compete in what will be the "borderless market."