The Bank for Agriculture and Agricultural Cooperatives (BAAC) is negotiating with a Chinese tech giant to set up a joint venture to develop an e-commerce platform to facilitate the sale of agricultural products to China, says president Chatchai Sirilai.
The bank does not plan to make the venture a state enterprise, with BAAC holding a 49% stake and the Chinese tech company a 51% stake.
The proposal is expected to be considered by the board in the first quarter this year, he said.
Mr Chatchai said the initiative aims to create a wider market for Thai agricultural products and a fair profit-sharing system for farmers and vendors.
Previously the bank and Thailand Post teamed up to sell agricultural products via an online platform called Thailand Post Mart within the country, he said.
Many Thai agricultural products offer great export potential, but have limited distribution channels, said Mr Chatchai. The bank can play a vital role in helping to promote such products, he said.
Section 10 (14) of the Bank for Agriculture and Agricultural Cooperatives Act allows the bank to establish a limited company or public limited company to operate an agricultural business, but prohibits the bank from carrying out direct sales of agricultural products.
The bank recently entered into a joint venture with an agri-tech startup, but it was unsuccessful. As a result, the bank shifted strategy for the promotion of crop sales by seeking a well-known company with good potential for a joint venture, said Mr Chatchai.
If this joint venture proves successful, it should reduce farmers' losses through more equitable sharing of profits, he said.
There are roughly 50 agricultural categories and 2,000 items sold by 200 vendors on the Thailand Post Mart platform.
Many more products and vendors are expected to join the platform if it can accommodate cross-border e-commerce, said Mr Chatchai.
Deputy Finance Minister Julapun Amornvivat said earlier the bank plans to develop an e-commerce platform for online distribution using blockchain technology for transparency and fairness.
Mr Julapun said many crops in Thailand are produced for export, but most of the profit goes to vendors, while farmers incur losses when selling their harvests.