Mr. Leaun's tale of chickens and corporate farms
Leaun Kongthavoin, once a poor Thai farmer who grew cassava, named his first child ''Kai'' -- meaning chicken.Skip to next paragraph
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Others may cluck, but Mr. Leaun insists his wife had a baby only after he became a full-time chicken farmer.
Many other changes came Mr. Leaun's way. His income rose from $600 to nearly sewing machine, a television, a motorcycle, and a $14,000 two-story house to replace his one-story wooden shack.
Mr. Leaun, like hundreds of farmers in Thailand, grows chickens under contract with Charoen Pokphand Company, known as the CP Group. It is Thailand's largest agribusiness, helping to transform Asia's largest farm crop exporter into a major food-processing nation.
Leaun's chickens, for instance, are fed corn and soy grown in northeast Thailand by CP farmers.
The grain is shipped to a CP feed mill, where it is properly mixed into batches by an IBM computer. Every two months, CP trucks pick up Mr. Leaun's chickens and take them to a CP processing plant where they are slaughtered, deboned, and exported to Japan.
From seedlings to tractors to an international trading company, the CP group of about 60 firms provide many Thai farmers with new technology, new crops, and new markets.
CP even owns a dozen chicken restaurants in Bangkok and broadcasts a radio program on new farming ideas.
By being so vertically integrated, CP comes under charges of controlling market prices and exploiting farmers. But the World Bank has studied CP as an example of private enterprise helping to develop rural areas.
''In the past Thai farmers were the baby of the government -- subsidies, free seed, etc.,'' says Ajva Taulananda, CP Group vice-president. ''And they became kind of babies. And today, still, any company involved with the farmer is accused of being exploitative.''
CP's approach differs from government methods in a key area: The government guarantees minimum crop prices while CP guarantees a minimum income. For farmers under contract to CP, their livelihood depends on how efficiently they grow their stocks and not on world market prices.
In one CP-run village, called Nongwa, the income floor is $90 a month. But the average earnings of the 56 pig-raising families is $200. Once landless farming tenants, the families were given 10 acres each, a home, a pig house, technical advice, a community center, and a guaranteed market.
CP has found the contract farmers to be good workers and efficient. ''The farmer is more willing to deliver the piglets at two in the morning,'' says Dr. Ajva.
North of Bangkok, CP is experimenting with cooperatives of rice farmers who already own their own land. Crop yields have more than doubled, but the idea has met resistance from the government, which legally controls all farm co-ops.
CP has joint ventures with some American firms, to introduce new farm techniques, and also in other Asian countries. The latter include a feed mill in China, a chicken and pig farm in Singapore, and a chicken farm in Indonesia.
Started 60 years years ago by a Chinese-Thai family selling vegetable seeds, CP Group now has more than 15,000 employees and is growing 10 to 15 percent a year, expanding its professional management. Its latest venture is an international consulting service on rural development.
CP represents a shift in Thailand, as in many developing countries, from grain to meat diets as incomes rise. Many Western scholars point out that far more land is used to produce the grain necessary for growing livestock.
But, says Dr. Ajva, 3 million tons of corn might be sold for $340 million, while that same corn fed to 12 million hogs would bring in $1.5 billion. And processing the meat would triple the income.