INEFFICIENCY THREATENS THAI FARM PRODUCTS UNDER AFTA

       Three major Thai farm goods - coffee beans, rice and palm oil - will lose their competitiveness under the Asean Economic Community if farmers and the government neglect to increase productivity and cut production costs, researchers warned yesterday.
       A study by the University of the Thai Chamber of Commerce's International Trade Study Centre showed those three goods stood to lose a combined US$60 million (Bt2 billion) to other Asean countries after liberalisation once the Asea Free Trade Agreement (Afta) comes into effect next year.
       Cenyre director Art Pisanwanich said present inefficiency in productivity, logistics and cost management would hurt the competitiveness of Thai farm products under Afta.
       "Although overall exports of major farm goods will increase following trade liberalisation, the market share of Thai exports in other Asean countries will decrease, because Thailand is inefficient when it comes to productivity and cost management," said Aat.
       Thai farmers must urgently develop their productivity, in order to ensure their competitiveness within Asean. They must also decrease costs for production and lofistics and diversify from commodities to high-value-added goods.
       The government should draw up a strategy to strengthen agricultural practices - one that not only promotes higher prices via intervention schemes, but also development of productivity.
       Aat said that local rice productivity was the lowest among Asean countries. For example, in this year's crop, the yield per rai for rice is 452 kilograms in Thailand, 579kh in Laos and Malaysia, 611kg in the Philippines, 787kg in Indonesia and 792kg in Vietnam.
       Local coffee beans will be hardest hit by Vietnam. Thailand's Asean market share of the product will decline 0.1 per cent, or US$200,000 (Bt6.68 million), to Vietnam's benefit between next year and 2015.
       Thailand's export market share in Asean for coffee beans is now 2.8 per cent, while Vietnam commands 61.1 per cent.
       Rice, Thailand's major export crop, will also lose to Vietnam. About 0.5 per cent of the market share, worth $13 million, will pass to that country. For palm oil, 2.6 per cent of the market share, worth $46 million, will go to Malaysia.
       At president, Thai rice exports crop, will also lose to Vietnam. About 0.5 per cent of the market share, worth $13 million, will pass to that country. For palm oil, 2.6 per cent of the market share, worth $46 million, will go to Malaysia.
       At present, Thai rice exports have a 28.9-per-cent market share within Asean, while Vietnam enjoys 71.1 per cent. Thai palm oil has a 6.4-per-cent market share in Asean, while Malaysia commands 34.4 per cent.
       Tapioca will be the only major Thai agricultural export to enjoy a higher market share within Asean, increasing 0.1 per cent, or $5,000.
       Import tariffs on rice and palm oil, which are 5 per cent now, will be elimated next year. Thailand's tariff on coffee beans will be reduced from 30 per cent to 20 per cent next year and then 5 per cent in 2015, because the Kingdom classifies coffee beans as a sensitive product.
       Chainant Ukosakul, vice chairman of the unversity's committee on trade rules and international trade, questioned whether Thailand was ready for free trade in Asean, saying the government had no sustainable or integrated plans for developing agriculture.
       He urged the government to draw up plans to develop the various farm sectors and improve efficiency in custom procedures, in order to serve trade liberalisation under the AEC next year.