AFTA EFFECTS – Farmers suffer coffee blues

BANGKOK – All hearts up on Doi Pahee in Mae Sai district were heavy when they heard the news that the Asean Free Trade Area would take effect last Friday.

In this mountaintop village, all residents make their living from growing coffee. For years, middlemen have come to this village to place orders for their harvests in October. However, they received not a single order last year and are still waiting expectantly for a buyer to show up.

“Perhaps it’s because of AFTA,” said Aran Pornjirapaisan, 34.

The village head said more than 500 people here were now living in fear that AFTA would suddenly deprive them of their livelihood.

“We are now worried that traders may prefer to wait for coffee from Vietnam. With AFTA, Vietnamese coffee will be much cheaper than what is grown here,” he said.

All of Doi Pahee village will be in trouble if no one arrives to buy the locally grown coffee.

“Coffee is now our fate. Locals don’t grow anything else. If our coffee is suddenly not wanted, we won’t survive,” Aran said.

He said Doi Pahee produced 400 tonnes of high-grade arabica coffee annually, 10 per cent of what Thailand’s production.

“Two decades ago, we grew opium all around here. But after officials reached out to us, we agreed to switch to lychees, longans and coffee. But coffee fetches such a good price that we’ve focused on coffee only in recent years,” Aran said.

Thanks to arabica coffee, each family on Doi Pahee did earn Bt250,000 a year on average.

Local officials have tried to allay the Doi Pahee residents’ jitters by explaining that AFTA would involve mostly instant coffee.

“They said coffee beans would not be imported,” Aran said. “But if that’s true, why haven’t traders come to buy our crop yet?”

Now, Doi Pahee village is full of dried coffee beans as villagers desperately wait for buyers to show up.

AFTA eliminates duty on instant coffee and reduces the rate to 5 per cent for coffee beans.

research by the Bank for Agriculture and Agricultural Cooperatives shows AFTA will affect farmers, including coffee growers.

Prathom Meekaew, a coffee expert at Nestle (Thai), said AFTA would not affect arabica growers anytime soon.

“The supply of arabica here is not huge,” he said.

Prathom is also convinced local growers of robusta coffee will not feel much of a pinch.

“Our coffee quality is much better than Vietnam’s,” he said.

Nophadol Siwabutr, director of corporate affairs at Nestle (Thai), confirmed that his company planned to buy Thai-grown coffee seeds this year.

Nestle (Thai) buys 70 per cent of its robusta coffee from local farmers.

“Because Vietnam focuses on quantity, its coffee beans’ quality is not as good as Thailand’s,” Nophadol said.

He admitted there were no contracts between Thai farmers and his company, so the company could stop buying their beans at any time.

“But for 2010, we’ve already decided to continue buying crops from Thai coffee farmers,” he said while declining to speculate what the company would do in the future.

Nestle (Thai) said local farmers produced 50,000-60,000 tonnes of coffee from 400,000 rai of land each year. Of that amount, 93 per cent is robusta and the rest arabica.

The Agriculture Ministry can only promise to help farmers via several measures. For example, coffee importers may be required to buy a certain amount of local output.

Source: asiaone.com