AEC: OPPORTUNITY, BUT BE CAUTIOUS ABOUT IT

Indonesia Ambassador to Thailand

The Asean Economic Community [AEC] which started in 2006 could be an opportunity for Indonesia to enter the market of agro-products in Asean, especially Thailand. For that Metter Indonesia should be well prepared so as not to become the market for Thailand’s product instead.

Lufthi Rauf, the Indonesian Ambassador to the kingdom of Thailand, on the occasion of the workshop entitled Readiness in facing the AEC 2015 in Bandung sometime ago stated that AEC opened opportunities for Indonesia to market products in Asean countries including Thailand, Indonesia had the chance to fill in the need for raw materials.

“Thailand was still need of raw materials from Indonesia, for example minerals and fish and semi-finished products. Moreover so far Indonesia and Thailand were inter-complementary in production” Lufthi said.

Indonesia could benefit from marketing network international scaled commanded by Thailand. Moreover Thailand regularly staged exhibitions of international scale. “These opportunities could be taken by Indonesia as alternative medium to market Indonesian agro-products.” Lufthi remarked.

The people of Thailand were relatively prosperous were potential market for Indonesia. With limited human resources [today the average age of Thai farmers were 55 years] Thailand’s business people would strive to find a market niche in agriculture in Indonesia.

Therefore, quality would be the determinant factor of success of Indonesian products in Thai’s market. Therefore the effort to upgrade quality was indispensable, through sustainable R & D. the partnership platform between farmers and private sector must also be enhanced because it would motivate farmers to meet high quality standards.

To Stay on the Alert

           

In spite of the opportunity to fill in Thailand’s market, Indonesia still had to watch on their ago products. The government of Thailand was giving serious attention to agriculture through consolidation of R & D activities in technology.

The government of PM Yingluck Shinawatra made a database of family head of farmers which were regularly updated whereby to publicizes or distribute policies and rules. Now the government of Thailand had launched Farmers ID Card to ease identification or distribute subsidies or apply new rules.

In addition to that the government of Thailand also developed sustainable policies in alternative agriculture or organic industry. The government of Thailand encouraged increase of added value of agro-products which were agro-commodities, expansion of market share, stepping up quality and uplifting international reputation.

Since 2012, the government of Thailand had issued 800,000 credit cards for farmers. The objective was to enable farmers to obtain capital for farmers without being trapped in debt. The credit card was issued by the bank of agriculture and agriculture cooperatives [BAAC], a government owned bank. As planned this year another 2 million credit cards would be released.

Thailand had also exercised land reforms of agricultural land by giving opportunity to land owners. Agriculture land was taken from the government’s land, land provider and the king’s land. Farmers were getting certificate of Utility but only for the purpose of agriculture.

To maintain the function of land as land for agriculture, the ownership of land could not be transferred. It could only be passed on to the heirs who were also farmers. If there was no heir, the certificate would again be transferred to the Ministry of agriculture of Thailand to be re-distributed to farmers who needed land. By August 2012 there were at least 5.5 million ha of land which was distributed to 2, 5 million family heads who were farmers.

 

Other point to be anticipated by the Indonesian government was that the board of investment of Thailand on August 2012 last had identified Indonesia, Vietnam and Myanmar as investment targets for Thailand investors. Data of Thailand’s investments showed that now there were 17 projects worth USD 68 million. Compared to other Asean countries Thailand’s position as investor in Indonesia was now the third next to Singapore and Malaysia.

Business News - July 26, 2013