Energy crop zoning proposed

Key Issues: 

Bangkok Post 20 May 2008 

By Phusadee Arunmas

The government is being urged to zone farmland to define areas for food and energy crops to ensure food export stability and also promote food as a strategic product to swap for oil. Vilai Kiatsrichart, president of Thai Food Processors' Association, said the government should cash in on soaring food prices to strengthen food management, and increase productivity in the farm sector.

Closer monitoring of world demand is also essential, as it would enable Thailand to designate export products appropriate to demand and prevent surpluses, she said.

''Food could be used as a strategic product to barter for other products such as oil. It could also be used for trade bargaining,'' said Mrs Vilai.

According to Mrs Vilai, without proper zoning, increased cultivation of energy crops might jeopardise raw material supplies for the food industry.

Thailand has about 130 million rai of farmland. About 63 million rai are rice fields, while about 17.4 million are being used for crops with both food and energy applications, mainly cassava, sugarcane and oil palm. The remaining land is farmed for fruit and other products.The area planted in energy crops, excluding oil palm, is expected to increase from three million to 5.5 million rai, according to the Agriculture Ministry.

The Washington-based International Food Policy Research Institute noted recently that the use of food crops to produce energy in some major countries, including the United States, had led to lower food production around the world.

As a result, prices of many foods have been rising, which benefits Thai food exports, according to Mrs Vilai.

''We believe [food] exports for all of 2008 both in terms of value and volume will remain strong given rising prices per unit following higher raw material and production costs,'' she said. ''But what we are now concerned about is [the availability of] raw materials supplied to the food industry. Aquatic animals, for instance, are likely to be in short supply because of climate change and rising oil prices that have led to many fishing vessels being idled.''

According to Mrs Vilai, unpredictable raw material supplies have also made it tough for exporters to forecast their sales in the longer term. However, she said the overall food exports of Thailand were expected to grow in a range of 10-12% this year from 117.6 billion baht last year.