CHIANG MAI - The government has revealed its strategy to develop the rural economy by setting up 76 social enterprises, one for each province, by combining private sector expertise, community know-how, and public funding.
The enterprises will be run on business lines with their own boards, managing director and advisers, and will come under a holding company, known as the "Pracharath Raksamakkee company".
The enterprises will be operated as a legal business entity to develop rural businesses and communities, focusing on agriculture, agriproduct processing, and tourism. The social enterprises will pull together the efforts of the private sector and civil society organisations, with advice, funding help and oversight provided by the government.
The Pracharath Raksamakkee company will be run under the Pracharath, or people state's partnership model, initiated by the government. Advocates say the government wants to put One Tambon One Product (Otop) items on a more commercial footing.
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According to the Community Development Department (CDD), the government sector will provide support on policy advocacy. The private sector will provide management and marketing know-how, while a civil society organisation will run the social enterprises.
Presiding over a meeting of the Pracharath committee in Chiang Mai recently, CDD director-general Apichart Todilokwet said while all social enterprises will come under one holding company, each social enterprise will work independently and generate its own income.
It will also have executive boards made up of members of the government and private sector, and a managing director working in civil society in the province.
The enterprises will also have advisory boards including officials from ministries and government agencies, including the Ministry of Agriculture and Cooperatives, the Ministry of Commerce and the Prime Minister's Office.
"The aim is to increase the incomes of rural people and help rural communities raise their standard of living, so we will use financial KPIs to measure the executives' performance," Mr Apichart said.
Thai Beverage Group CEO Thapana Siriwatnaphakdee who heads the working team on the Pracharath Raksamakkee model, said the idea of creating a social enterprise in each province is similar to the community cooperatives system.
However, it will not come under the law governing cooperatives, which will allow management to be more flexible and effective.
Mr Thapana said the working team has come up with a plan to set up social enterprises in three phases.
Phuket, Chiang Mai, Phetchaburi, Udon Thani and Buri Ram will take part in the first phase.
Thirteen more social enterprises will be set up by September in the second phase and the committee will set up social enterprises in all 76 provinces by the end of this year, he said.
"We have launched the first social enterprise in Phuket. It is the first province to pilot this project because the island is ready and several products and services there are connected to tourism. We are now working on Chiang Mai as the second destination," Mr Thapana said.
For Phuket, five products will be promoted for adding value and branding. They are Phuket pineapples, lobster, goat milk, organic vegetables and batik clothes.
For Chiang Mai, some 10 products will be promoted for adding value and branding such as rice, mango, coffee beans, longan, hand-woven textiles, woodcarving and silverware.
"Local communities should be taught about business strategies and how to develop diversified revenue streams," he said.
"Shareholders in the company will oversee the operation with the aim of benefiting society, not to maximise profits. All profits will go back into improving the businesses, so no dividends will be paid to anyone," Mr Thapana said.
Chiang Mai Chamber of Commerce president Wiphawan Woraphuttiphong said the policy could help transform Chiang Mai's economy.
Ms Wiphawan said many Otop products have the potential to expand to bigger markets, but businesses, especially SMEs, need more support from the government sector and large companies to develop.