The National Legislative Assembly (NLA) yesterday passed the first reading of a bill aimed at regulating and developing a contract farming system while protecting farmers from being exploited.
Agriculture Minister Gen Chatchai Sarikulya told the NLA contract farming has become popular over the years and it offered huge business potential for farmers if regulated and developed properly.
Transfers of technical know-how, low production costs, increased productivity and income security were among benefits the participating farmers could expect from contract farming, he said.
"However, the contract farming practice is complicated and small-scale farmers often don't have negotiating power and are unable to fulfill contractual conditions.
"So the bill sets criteria for designing the contracts to ensure fairness for the farmers and put in place mechanisms to promote and develop contract farming," he said.
The bill was proposed by the cabinet amid concerns that farmers under the contract farming system were left to shoulder investment risks alone and many ended up with huge debts.
Under the bill, contract farming would concern a contract for the production of farm produce or services between an agribusiness operator and a group of at least 10 individual farmers or a legally registered agricultural organisation.
The operator's involvement is limited to the production process.
The bill also seeks to establish a board, chaired by the agriculture minister, to promote and develop contract farming and requires agribusiness operators to come up with a prospectus for contract farming.
"The bill will protect farmers and give them leverage when negotiating with the [contractual] business operators," said the minister.
The NLA members spoke largely in favour of the bill with some observations and recommendations.
Thanee Onla-aid expressed concern about the required number of farmers, saying the minimum requirement could provide a legal loophole for some operators to circumvent the law.
"This could be exploited to allow business operators to avoid scrutiny," he said.
Another NLA member Jate Sirataranont suggested that a class-action lawsuit should be adopted in case of a legal dispute pitting farmers against operators.
He also called for a dedicated committee to be set up to deliberate the bill to make sure the legislation is introduced in the best interests of farmers.
NLA member Worapong Sokhatiyanurak was concerned about who could claim benefits that might arise during contract farming.
He urged the committee to have this issue covered by the law.
"There might be certain benefits that occur during the contract such as intellectual property. These must be addressed and made clear [in the bill]," he said.
Following the debate, 202 NLA members voted to pass the bill with three abstentions.
A 22-member committee was set up to deliberate the draft.
In another development, a coalition of tobacco growers and retailers yesterday submitted a petition to the NLA demanding amendments to the Public Health Ministry-sponsored tobacco control bill.
Krit Phathong, chairman of Chiang Mai's tobacco growers, curers and dealers association, said the draft threatened the livelihoods of tobacco growers as it seeks to curb areas for growing tobacco.