The Tobacco Authority of Thailand (TOAT) plans to set up a subsidiary to move into the hemp business, with the aim of increasing tobacco farmers' income by three to four times the present level, said the state enterprise's governor Phanupol Rattanakanjanapatra.
He made the remark yesterday after TOAT signed a memorandum of understanding for hemp business development for the sustainable improvement of Thai farmers' incomes with Santa Fe Farms (Thailand) Co.
Santa Fe Farms LLC in the United States is the parent company of Santa Fe Farms (Thailand).
Mr Phanupol added that TOAT has cooperated with related government entities and many private business partners to form an alliance to make hemp a profitable business venture for its farmers.
He said the Council of State is of the view that the law governing TOAT allows the state agency to plant hemp, pending approval from the State Enterprise Policy Office (Sepo). Sepo is expected to give the green light to TOAT within the next couple of months.
TOAT sells 18 billion cigarettes per year. Total cigarette sales in the Thai market are around 35 billion per year.
Mr Phanupol added that TOAT is an organisation with many affiliated farmers who grow tobacco for it to produce cigarettes. The farmers are an important part of the business's supply chain.
However, the increase in cigarette excise tax in 2017 affected many of TOAT's affiliated farmers. The tax increase has reduced the demand for cigarettes and, therefore, TOAT's quota to purchase tobacco from these farmers.
Mr Phanupol said that TOAT is not standing still on this issue but continuously trying to find solutions to help its affiliated farmers, especially with new products like hemp.