Cooperative Promotion Department

A. Problem Analysis

 1. What was the problem before the implementation of the initiative?
Agriculture is an important sector contributing to nearly 11 percent of Thailand’s GDP and impacting more than 23.7 million farmers’ lives across country or approximately 36.82 percent of total Thai population. Most Thai farmers are smallholders with average 19.40 Rai/household of land (3.10 hectare/household)(Na Mom – avg. 3-5 rai/household) earning 240,231 baht/year/household (7,385.85 dollar/year/household) – 28% less than what people in other sectors make and 37% lower than country average costs of living. Most farmers are living in poverty. Common issues persistently facing smallholder farmers are lack of funding, high expenses relative to earnings. These two factors significantly affect farmers’ ability to save trapping them in permanent poverty. Solving smallholders’ problems has been in both public and private sectors focus. Policies and measures were implemented to help relieve their suffering but many could only delivered short term benefits. Farmers still live in poverty or even worst, in many cases they are burdened with heavy debts. Residents of Na Mom district whose livelihoods depend on incomes from farming of rubber trees, fruit trees, rice, livestock, agronomic crops, and vegetables are not different, they suffered from similar causes: lack of funding and high expenses. Funding are especially vital for farmers here as it is needed for two major purposes – for agricultural production and for covering costs of living in daily life. However, as smallholders, their access to funding or credit was limited so many of them turns to loan sharks for loan with an interest of 200 – 400 times higher than market average. Farmers are trapped in debts that get larger and larger every years because incomes earned from farming can barely cover their costs. Large portion of their incomes were used to pay their debts season after season. During 1984 – 1987, average debts/ household/person was 36,032 or 31% higher than farmers’ average debts. Spending on consumer goods and farm inputs constituted large portion of their total expenses- approximately 60%. Averagely, farmers spend mostly on farm inputs such as coal and rubber tapping equipment and on consumer goods. These items are their daily necessities but there were two major issues with this – costs and source to buy them. Although Na Mom was only 14 km. away from city of Song Khla but it was surrounded by mountains coupled with lacking of road infrastructure making travelling inbound and outbound of the area difficult. Na Mom Agricultural Cooperative Ltd., a farmer organization established in 1984 to help proving these services to them were largely dysfunctional –insufficient capital and have limited access to funding, sell goods that nobody needs – so every parties involved were losing in this relationship – the cooperative performing poorly - farmers cannot get their inputs supply at competitive costs, cannot get access to low cost capital.

B. Strategic Approach

 2. What was the solution?
Mr. Suwate Kongsawat, sub-district headmen and director of Na Mom Agricultural Cooperative Ltd., and Mr. Lap Nu Pradit, saw problems with the system that many other agricultural cooperatives adopted where debts lead to bigger debts and both the cooperative and both the cooperative and its member never be able to stand on their own feet. He observed that how focusing on short-term problem solving leading the cooperative and the community into vulnerability. He only knew that the cooperative and the community needed to break out of that pattern and need to do something different. He brought this issue to consult with Mr. WanlopSukhmee, a cooperative promotion officer responsible for Na Mom district at that time. They thought the community may need to be self- reliance through self-help and mutual help and to achieve this member participation was key. Their first priority was functionality of the coop– to build a capable cooperative that operates in members’ best interests. The initiative focused on two levels of development – enhancing cooperative’s capacity (capital – staffs and BoDs’ ability to manage) and aligning its operation with its members’ needs. The initiative solves the problem as it helps raise the community capability to manage their resources to meet their needs through the coop. Community’ needs are reflected to the coop and then services and projects are initiated to meet their needs. Throughout the process, members play crucial roles from planning to implementation, and evaluation of the program. Members have full involvement with its management from setting saving and loan interest rates, types of service, goods to sell, coop’s surplus target, dividends, as well as what contributions to the community they should make, etc. These were achieved through interactive communication between stakeholders. The initiatives did not just help farmers to gain access to low cost capital or inputs supplies and consumer goods but it has built a system capable of delivering services responsive to community’s evolving needs.

 3. How did the initiative solve the problem and improve people’s lives?
The initiative a farmer organization fully run by its members and for its members through human development by building capacity, empowering, and reinforcing. Their enhanced capacity has changed the way the community collaborates with local government agencies from passive to a proactive. Community needs and concerns are reflected to coop’ management so projects are initiated and implemented under members’ approval. Relevant local government agencies are coordinated project implementation. Capacity Building- the community are educated and helped to develop relevant skills so the coop is run effectively to serve its members and community’s best interest. Through this, members’ involvement and commitment was encouraged. Empowering - coop group meeting was a process established to engage members in coop’s management as it promoted communication between coop and members. It facilitates members’ active participation. Inputs from members used to improve coop service, initiate projects to meet their needs. Information from this process also provide insights for promotion officers to prepare training content, initiate projects to be implemented in the area. Reinforcing - benefits realized by members encouraged more participation and stronger commitment. Similarly, members’ participation contributing to Coop’s economic and institutional strength inspired Coop’s BoDs and staffs to promote members’ engagement.

C. Execution and Implementation

 4. In which ways is the initiative creative and innovative?
1986 – 1987 Registered since 1981 but NMAC has not been able to operate for 3 years due to deficiency in many areas. Songkhla Provincial Cooperative Promotion Office (SPCPO) and NMAC organized a public forum for coop members who were residents of 27 villages, in 4 sub-districts of Na Mom to discuss about coop problems, its ability to provide service to members, and the needs to mobilize their own capital. As a result, Satja Omsab (Gentlemen’s Agreement on Regular Saving) project was initiated to promote members’ saving. In this project, members committed to save a minimum of one baht ($0.033) a day without withdrawal for 5 year, their savings at NMAC were deposit under NMAC account at a provincial level coop- Songkhla Agricultural Cooperative Federation Ltd. (SACF) and used as 100% loan guarantee. Loan from SACF was utilized for its daily operation and for credit service to its members. From 1986 – 1987, NMAC’s capital has grown from 61,549.50 Bahts to 13,973.91 Bahts. Since 1987, the coop has been relying on its own capital alone to provide microcredit for its members at low interest rate and other services this contributed community growth. Furthermore, NMAC also rethought its inventory mix to meet its members’ needs. Instead of holding various unwanted goods, NMAC shifted to cooking gas, rubber tapping equipment, fertilizers, animal feeds. 1988 – 1994 As NMAC’s membership was increasing consistently, Songkhla Provincial Cooperative Promotion Office and NMAC were aware of the need to educate farmers of coop principles, and values before their registration to ensure members know their roles and responsibilities as fundamental to their active participation to strengthen the idea of self-help and mutual-help as well as their roles and responsibilities. Cooperative promotion officer also mentored NMAC’s BoDs and staffs in coop good governance and management, and daily operation. In addition, coop group leaders and staffs were also learned how to run group meeting, promote member participation and involvement. 1995 – 2004 Over the span of 11 years, NMAC’s membership base grown from 169 in 1984 to 1,187 in 1994 (an overall 602% growth or an average 23% YOY) so as its business lines and volume. NMAC found it difficult to keep up with members’ needs. So SPCPO suggested the coop to adopt strategic planning for its management. Coop promotion officers mentored NMAC in strategic plan preparation, implementation, monitor and evaluation where members are actively engaged in every steps. Coop strategic plan was prepared based on members’ needs reflected from members’ need survey, reviewed and approved by members in coop’s annual general assembly. Coop strategic plan was prepared for 9 years period and will be reviewed annually. 2005 – 2014 Following coop’s adoption of strategic planning practice, during this period, the coop focused on implementation, monitoring, and evaluation of its strategic plan. At year end, based on feedback from members, the plan would be reviewed for progress, criticality, impact and urgency to consider the continuity and adjustment of the following year’s action plan which would be approved by member representatives at coop general assembly. Projects implemented included student loans for members and family members, community relationship development, demonstration cooperatives in school, community waste segregation, healthcare promotion, welfare for members with disabilities, and study visits, etc. Currently, NMAC has developed its capacity to effectively provide services that promote its members’ well-being and build a better community. Members and community’s needs are reflected to coop through various participation processes, strategic and action plans are prepared accordingly, then relevant government agencies are coordinated for integrated implementation.

 5. Who implemented the initiative and what is the size of the population affected by this initiative?
Stakeholders involved in the implementation of the projects consisted of resident of Na Mom district, Na Mom Agricultural Cooperative Ltd.’s staffs and BoDs, sub-district and village headmen as group leaders, and Songkhla Provincial Cooperative Promotion Office. o Songkhla Provincial Cooperative Promotion Office designed processes for member/ public participation, providing mentorship for coop’s BoDs and staffs to build an enabling environment for member participation such as group meeting, survey, general assembly, etc. Monitor and evaluate coop development to provide relevant supports according to coop situation and needs. o NMAC’s members are critical factor in the initiative implementation. They committed to participate in coop’s capital mobilization, engage non-active members, providing feedback for coop’s operational improvement. o NMAC’s staffs and BoDs in collaboration and under mentorship of cooperative promotion officers played an active roles in projects implementation by involving members in every processes from strategic planning to evaluation. o Sub-district and village headmen as group leaders are key coordinators between coop and community. Throughout the year, coop group leaders regularly communicate with group members and coop management through group meetings.
 6. How was the strategy implemented and what resources were mobilized?
1. Budget used for the implementation of the initiative comes from 2 sources: regular budget for extension service from SongkhlaProvincial Cooperative Promotion Office, and operation expense budget of NMAC. I) Budget for on-site consultation visit of cooperative promotion officer were allocated by the Songkhla Provincial Cooperative for 42,240 baht/year ($1,408/year). II) Budget for coop promotion officers study visit for 49,200 bahts/year ($1,640/year) and III) Operation expense budget was allocated to team of staffs for group meetings, member visits, etc. 2. Human resources involved in the implementation of the initiative consisted of cooperative promotion officers and NMAC’s BoDs and staffs, and sub-district and village headmen representing residents of 27 villages in 4 sub-districts of Na Mom district. I) Cooperative promotion officers helped in the consultation, training, and knowledge transfer to farmers, coop’s BoDs and staffs to help them adopt cooperative principles, values, and practices. Also provided training and consultation to NMAC’s BoDs and staffs to enhance their ability to connect and communicate with members facilitate group meeting process.

 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
- An integrated farmer organization – a cooperative run in its members’ best interest where the community are fully engaged from the strategic planning to decision making. Na Mom Agricultural Cooperative Ltd. has been transformed from a totally dysfunctional cooperative with insufficient operating capital and full of dead stock to an efficient, democratically and inclusively managed, and economically sound one. The cooperative engaged its members in every major decision makings through group meetings (4,791 members from 27 villages in 4 sub-districts into 39 groups), BoDs’ monthly meetings, and annual general assembly so every action and project implemented are designed toward meeting members’ needs – critical, urgent, and wide impact. NMAC’s membership base grow from 169 in 1984 to 4,791 in 2014 comprising 62% of Na Mom population. Its services and social welfare are designed to meet its members’ needs in almost every aspect of their lives involving education, housing, career, healthcare, etc. Over 90% of its surplus are allocated to its members and community. - Community’s human capital. Coop’s BoDs, staffs and members were educated and mentored to collaboratively run the NMAC to meet their needs and promote community growth. They learned about their role and responsibility and how that impacted them at individual, cooperative, and community level. - A process designed to encourage and facilitate full participation from members promoting member-responsive services and allowing effective check and balance processes. I) Communication channels where members, coop’s staffs, BoDs, and cooperative promotion officers can communicate regularly, timely, and openly including: o Group meetings – meet at least once a month. Issues raised, information shared, comments and suggestions made in group meeting are brought for discussion or decision making in BoDs’ monthly meetings. o Surveys – carried out once annually. Information collected are used to prepare cooperative strategic and action plans which are reviewed, and approved by members in general assembly. o Reports – Monthly meeting report will be distributed to group leaders to disseminate to group members. o Focal points – members can talk to group leaders, members of BoDs, coop’s staffs, or cooperative promotion officers. And II) 4 task forces, each consisted of NMAC’s staffs, members of BoDs, and group leaders, assigned to meet with members bimonthly to provide training, following up on certain issues, disseminate information. This process practiced at NMAC for over 30 years has empowered farmers to play an active role in how their organization should be run through their involvement.

 8. What were the most successful outputs and why was the initiative effective?
Monitoring and evaluation are carried out through group meetings, BoDs’ and staffs’ monthly meetings, surveys, reports, NMAC’s operational performance reviews: I) NMAC’s operational performance such as amounts of deposit, loans, consumer goods and input supply sales, inventory, etc. can be good indicators of community’s adoption of are reviewed and analyzed, if any one indicator show sign of abnormalities, further analysis of root causes and factors will be done and discussed with members, BoDs, and staffs so corrective activities/actions can be planned and implemented accordingly. II) Survey is carried out once a year before cooperative’s annual general assembly to seek members’ feedback of cooperative performance and suggestion on service and operational improvement. Data collected will be inputs for coop strategy planning. III) Group Meetings – through group meetings, data reflected from member farmers will be compiled by group leaders and each bring into discussion with cooperative BoDs and staff at cooperative monthly meetings. Issues considered most critical, urgent, and impact wider public will get first priorities for the implementation. Then the plan concluded from the meetings will be brought back to update farmers and discussed at group meetings. The plan will then be adjusted based on feedback from farmers and brought back to discussed in the next group meetings until it get approval by the members. Progress of implementation are also discussed and followed up at group meetings. IV) BoDs’ and staffs’ monthly meetings will review information reflected from group meetings then actions will be planned accordingly. V) Reports including monthly meetings and coop’s annual reports are distributed to members for reviews. VI) General assembly held once a year, attended by members’ representatives elected from group meetings, to report on coop performance, financial statement, surplus allocation, strategy and action plan for the following year, get members’ approval for the aforementioned, , elect new BoDs (a 2-year term). VII) Regular visits. Cooperative promotion officers visit cooperative regularly to learn about their situations and problems, as well as to provide advises, and supports.

 9. What were the main obstacles encountered and how were they overcome?
- During the early stage of initiative implementation, farmers felt it was difficult to get loan from the cooperative as it was conditioned to their commitment in savings. Number of farmers wanted to terminate their membership at the cooperative and go back to loan shark. Group leaders and cooperative promotion officers went to meet with them in the villages and also in group meetings to explain how the system works and how it will benefit them in the longer term. Friends-bring-friends strategy was employed to get more members to attend group meetings, and also visited them at home. Through such processes, cooperation and participation from farmers gradually rise and as they committed to the program started to see benefits- low interest loans, increased personal saving, better services i.e., goods stocked more tailored to their needs and available at lower costs, also total benefits received in terms of dividends, patronage returns, social welfare, and contribution to community - they are more confident with the system so they were more engaged with the program. - When group meeting program first started, it gained low level of participation from farmers – less information sharing, comments, or feedback provided inadequate information inputs for effective planning or decision making. We discovered that some farmers are too shy or afraid to speak in public so we provide a sheet of paper for farmers to write their opinion. Farmers who are afraid or too shy to speak in public or uncomfortable to speak about certain issues can opt to write. The method worked very well, we received better responses from farmers. Even though, later more farmers were more confident to participate in group meeting discussions, paper option was kept available. Presently, member participation in group meeting is over 80%.

D. Impact and Sustainability

 10. What were the key benefits resulting from this initiative?
The totally transformed NMAC has become a legacy of the whole Na Mom district promoting community’s livelihood and well-being through its services to members and contribution to community. More than 30 years, the community leader and cooperative extension altogether use the cooperative as a tool to accomplish the goal of locally financial self-reliance and income generation to local. The strategy on approaching and understanding the need of local people was done over the existing of the cooperative. As a result, the number of co-op member started from 169 members in 1983 to 4,791 members in 2014. In fact, co-op member covers approximately 62% of Na Mom district. Members’ involvement in cooperative’s operation has helped it to provide services better aligned with its members’ needs- inventory mix, financial services, projects, etc. NMAC’s effort to rationalize its inventory mix from wide range of consumer goods to animal feeds, rubber tapping equipment, fertilizers, cooking gas, rice, etc. improved its retail business from approx. 17,000 bahts to over 71 million help its members save costs on consumer goods and agricultural inputs lowing their costs of living and production. Through Satja Omsab project and monthly coop share capital, NMAC successfully mobilized fund from its members and used as loan guarantee from provincial level coop. Loan received from cooperative federation was used for providing microcredit to its members and also fund its daily operation. From 1984 to 2014 NMAC’s share capital grew from 10,350 bahts to over 335 million bahts, capital reserve also grew from 4,176.36 bahts to over 45 million bahts, deposits from 115,813 bahts to 1.33 billion bahts-an approximately 10%/year growth. Its financial stability allowed the coop to provide microcredit to its members at much lower cost than market average. While commercial banks loan at 8%, NMAC can offer to its members at 2 - 5%. Satja Omsab and other saving promotion programs has built co-op members financial discipline, they are more punctual on debt payment so lessen coop’s bad debt. During the first seven year (1985 – 1991), there were no any overdue debts. The outstanding debt firstly founded in 1992. Even though, the arrears of interest to total interest slightly fluctuated by 5% to maximum 18% due to the ASIAN Financial Crisis, the cooperative can remained the stable level only at an average 10%. Loans from the coop was used for farm improvement investment, agricultural equipment purchase, home construction, education, and vehicle purchase, etc. Over the years, most NMAC’s members’ housing has improved from a small one story house in rubber plantation to a more proper two story house. Na Mom was also the first district in Hat Yai to achieve promotion of proper bathroom construction in every household through its 3,000-bahts additional loan for bathroom program. NMAC’s members’ average savings increased from 437 bahts in 1985 to 278,000 bahts in 2014. Since 1994, NMAC has also allocated its surplus to members’ social welfare and community contribution including scholarship for high school students, organic vegetable farming, green waste for green community through waste segregation project, welfare for members with disabilities, and healthcare allowance for members, etc. This fund has constantly grown from 0.3% to 6% of its net surplus. As successful implementation of this initiative helps promote community development by promoting member participation in coop operation, during 1985 – 2004, SPCPO initiated Brother Coops Project where successful coop shared its experience with other fellow coops in 14 provinces of southern Thailand in how it achieved self-help and mutual help through promoting member participation. Numbers of coops learned and adopted the process and help them grow sustainably. In two cases, coops in critical financial problems adopted the process and recovered from loss to financially stable. Coop promotion practice has also changed to focus more on member level, in addition to coop level, and consistently adjusted to more responsive to their needs.

 11. Did the initiative improve integrity and/or accountability in public service? (If applicable)
It has been acknowledged that “Na Mom Agricultural Cooperative. Ltd. is the heritage of Na Mom community” because a part of successfully strengthen community has been contributed from the cooperative for over 30 years. Local people can obviously generate income by the concept of self-help and mutual help. In addition, the virtue and morality have been taught during the cooperative’s group meeting implanting in cooperative member’s mind. The cooperative always give and share to the community never exploitation. It brings about peaceful society. The perception of the existing of the cooperative and its benefit enhance unitedly Na Mom people and the cooperative. The concept towards self-reliance and member participation system has transferred to 14 cooperatives in the Southern of Thailand. Mr. Lap and his associates disseminated the idea and how to use in the cooperative to those coop either trouble cooperatives or new establishment cooperative since 1987. There are three difficulty cooperatives, Kho Yao Agricultural Cooperative, Ltd., Hat Yai Agricultural Cooperative, Ltd., Rattha Phum Agricultural Cooperative, Ltd, which was early establishment and prolonged loss. Since the Na Mom idea was applied in these cooperatives, business operation can be restored. The example of the success as follow; • Kho Yao Agricultural Cooperative, Ltd.; share capital rises from 38 million bahts (2005) to 90 million bahts (2013) increased by 136% • Hat Yai Agricultural Cooperative, Ltd.; share capital rises from 106 million bahts (2005) to 318 million bahts (2014) increased by 200% • Rattha Phum Agricultural Cooperative, Ltd.; share capital rises from 42 million bahts (2005) to 136 million bahts (2014) increased by 223% The newly cooperative, developed the idea of Na Mom cooperative in the beginning, also found the financial sustainability such as Sigh Hanakorn Agricultural Cooperative, Ltd. currently has 466 million bahts of operational fund with 19.42% average profit growth and Bang Kram Agricultural Cooperative, Ltd. has 411 million bahts on operational fund with 21.92% of average profit growth. However, there are others factors affect the accomplishment of cooperatives. Even though some cooperatives had applied the best practice of Namom, it couldn’t work due to identical behavior of each local people and their living environment. The next generation of Namom District has absorbed the idea of cooperative from various activities created/initiated by of Namom Agricultural Cooperative. The Cooperative Youth Camping, the project is to disseminate the moral and unity concept of cooperative to the new descendant. Ensuring the sustainability of the cooperative, furthermore, the management team, the board of director and extension officer had been worked together to create the cooperative member’s participation system. Monthly member group meeting, quarterly member group chairmen meeting, and annually general meeting are set as a communication system approaching member frequently and thoroughly. Additionally, the continuous training is provided to all target segments involved in the cooperative.

 12. Were special measures put in place to ensure that the initiative benefits women and girls and improves the situation of the poorest and most vulnerable? (If applicable)
Tangible benefits realized by every stakeholders from the process validate the concept of self-help and mutual help encouraging more participation and commitment from the members. Regular monitoring and adjustment contributed to initiative success as any problems can be spotted and solved early on so public service are delivered more suitable for the community situation and needs. These two factors help keep the community stay committed to following through with the process even when they encountered problems and obstacles along the way.

Contact Information

Institution Name:   Cooperative Promotion Department
Institution Type:   Government Agency  
Contact Person:   Sureeruch Auansakul
Title:   Director  
Telephone/ Fax:   6626285547
Institution's / Project's Website:  
E-mail:   sureeruch@cpd.go.th  
Address:   12
Postal Code:   10200
City:   Pra Nakhon
State/Province:   bangkok
Country:  

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