Clampdown planned on fruit dealers

Clampdown planned on fruit dealers

Durian is a favourite in China, making up 41% of Thai fruit exports to the country in 2014. Pawat Laopaisarntaksin
Durian is a favourite in China, making up 41% of Thai fruit exports to the country in 2014. Pawat Laopaisarntaksin

The government has vowed to exercise all related laws to regulate fruit trading in a bid to stop foreign importers from infringing on protected local fruits and vegetables.

Deputy Commerce Minister Suvit Maesincee said Thailand would take into account all related laws and regulations governing fruit and vegetable trading -- such as the Foreign Business Act, the Price of Goods and Services Act and agriculture-related acts -- to prevent traders with unknown backgrounds and sources from contacting fruit farmers directly and handling their own business instead of going through Thai brokers.

In a move to tackle the influx of foreign traders, mainly from China, who talk directly to farmers at Thai orchards and export directly to China, the Commerce Ministry yesterday launched the "Chanthaburi model".

Under the scheme, Chinese traders who want to buy fruit directly from farmers in Chanthaburi province are required to register with the Agriculture Department. The produce they buy must pass good agricultural practice (GAP) standards.

The purchase contract also must be conducted in a manner fair to Thai farmers.

Operators have complained in recent years about Chinese traders entering Thailand to operate fruit wholesaling businesses in provinces such as Chanthaburi and Chiang Mai, which produce durian, longan and other fruits.

Although entry by Chinese traders creates more competition among middlemen and brokers, ultimately benefiting farmers, authorities fear that in the long term the practice could hurt Thai farmers and small businesses if Chinese traders corner the market.

Pongpun Gearaviriyapun, director-general of the Business Development Department, said previous inspections revealed Chinese traders buying directly from Thai farmers solely for export purposes.

In this case, he said, those Chinese traders are legally eligible to do so and are not in breach of the Foreign Business Act.

But to buy and sell in the domestic market, they must first seek approval from the Commerce Ministry, as the practice is regarded as retailing and wholesaling in the annexes of List 3.

List 3 is a group of businesses in which Thais are deemed unready to compete with foreigners.

Foreigners seeking to engage in List 3 activities are required to apply for and obtain a foreign business licence before starting operations.

Thailand shipped 12.6 billion baht worth of fruit to China in 2014, up from 4.42 billion in 2007.

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