Rise of the patrician farmer

Rise of the patrician farmer

Korn Chatikavanij has started a non-profit organic rice company with the goal of raising the income and status of growers.

People recognise Korn Chatikavanij as a successful investment banker-turned-politician who was once the country's finance minister. Today he has a new role: owner of a non-profit packaged organic rice manufacturing company.

Korn Chatikavanij, the former finance minister, presents some of the organic rice with which he hopes to boost rice farmers' income in a sustainable way.

He has a dream to see Thai rice positioned as a premium product, like French wines, whereby prices are based on the area and year they are produced. For this he has spent his own money to set up Kaset Khem Khaeng to distribute organic rice to luxury restaurants under the brand name "Imm".

In Bangkok his customers include Greyhound Cafe and White Cafe. E-commerce will be another channel for the products. By cutting out third parties from the supply chain, Mr Korn hopes to hand down more profit to his suppliers, the rice growers.

Scores of rice-farming households in Moo Baan Nong Hin in Maha Sarakham province grow organic hom mali, black fragrant and red rice for Mr Korn's company on 167 rai of land. The organic rice paddy is later milled and packed in packaging made from loincloth produced by wives of the farmers in the community.

To encourage farmers to cultivate organic rice, which does not use chemicals throughout the plantation and production processes, Kasem Khem Khaeng agreed to purchase paddy with moisture of less than 15% from farmers at 20,000-25,000 a tonne, depending on paddy type.

It also paid 4,000 baht per rai in advance to farmers to help them cover their debts, as some farmers borrow from loan sharks to plant rice. Organic rice cultivation typically yields a lower output than with chemical inputs, but the organic rice price is higher.

Farmers who participate in the project receive a double windfall from selling their organic paddy at the guaranteed price of 20,000-25,000 a tonne by sharing in the company's profit from rice sales to restaurants and consumers.

Kaset Khem Khaeng will also contribute a portion of the profit to the farmers' community.  

It sells organic rice at 120 baht a kilogramme and around 100 tonnes of paddy is expected to be sold in the first year of operations.

Imm organic rice was officially unveiled last Friday.

Mr Korn said he wants farmers involved in the company's entire operational process to train them as entrepreneurs so they can eventually run the project without his involvement.

"The biggest weakness of Isan rice farmers is their lack of bargaining power, so they must accept prices offered by merchants. They don't have any chance to set selling prices," he said.        

Creating a direct distribution channel from field to dish can build up farmers' bargaining power, said Mr Korn, adding that he believes consumers are willing to pay more for high-quality organic rice.

There is vast room for growth of organic rice as a mere 2% of total rice-growing areas cultivate organic rice. That percentage is likely to jump to 10-15% in the future, he said.

Suphan Sompakdi, 58, a farmer participating in the project, said drought remains the biggest problem of rice farmers.

"The government can tax rice farming. We only beg them to build more thorough irrigation systems. I believe we can do so because if we can construct elevated highways, why not better waterways?" he said.

If there are ample waterways, rice farmers have a chance to get rich like farmers in advanced economies, said Mr Suphan.

Organic rice cultivation takes more time from input to output than chemical rice farming, and the former yields 500 kilogrammes a rai on average, compared with 600 kg for the latter. But the price of organic rice is double that of chemically-produced rice.  

The project is likely to gain more members because of the price difference, Mr Suphan said.

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