1. CONTRACT FARMING BUSINESS FOR DEVELOPMENT
“CHALLENGES AND OPPORTUNITIES”
MR. VICHAI POONPIRIYASUP
CROP INTEGRATION BUSINESS
C.P. GROUP (THAILAND)
13 MARCH 2007

2. Total Trade Value 13 billion USD.
1. ABOUT Charoen Pokphand (C.P.) GROUP
Total Trade Value 13 billion USD.
MISSION : C.P. is Source of Human Energy
- Kitchen of the World
- Food for Brain
Pattern of Business :
Expansion along Vertical Integration lines
Two main Business Streamlines :
Production and Processing (Agri-business)
Service (Telecommunications Logistics and Retailing)

3. Business Lines 1. AGRI-FOODS BUSINESS GROUP
( Agro- Industry, Aquaculture Industry and
Frozen Foods & Service)
2. CHIA TAI CO.,LTD. GROUP
(Seeds, Fertilizers and Plant Protection)
3. THE CROP INTEGRATION GROUP
4. THE PET BUSINESS GROUP
(Pet Foods)
5. INTERNATIONAL TRADING BUSINESS GROUP

4. Business Lines 6. C.P. GROUP INVESTMENT IN CHINA
( Agri-business, Retail Distribution, Automotive Parts & Industrial, Entertainment Media)
7. MARKETING AND DISTRIBUTION
8. PETROCHEMICAL BUSINESS
9. TELECOMMUNICATIONS
10. REAL ESTATE AND LAND DEVELOPMENT

5. C.P. Network Investment, operation and trading in 22 countries
EU, North America, South America,
Africa, The Middle East and Asia

6. Crop Integration Business, CP Group
Core Business
Field Crop Business
Rice Integration Business
Horticultural Business
Agricultural Machinery Business

7. C.P.GROUP ALWAYS REALIZE THAT FARMERS ARE OUR LIFETIME PARTNERS
SO WE DO THE BUSINESS FOR DEVELOPMENT
WE HAVE ESTABLISHED SEVERAL DIFFERENT PROJECTS
WITH THE MAIN OBJECTIVE THAT
IF FARMERS HAVE SUSTAINABLE INCOME
AND BETTER QUALITY OF LIFE
THE COUNTRY WILL ALSO PROGRESS

8. 1. Considerations to Operate Agribusiness
Market Potential
- study global and domestic market condition
- production volume
- export and import
- pricing
Knowledge and Technology Potential
- R & D objectives
- new product development
- product differentiation

9. - suitable production area - soil type - water source
3. Production Potential
- suitable production area
- soil type
- water source
- climatic condition
CONTRACT FARMING
Human Resource Potential
& Management System
5. Food Safety and Environmental Concern

10. Contract Farming Case Study in GMS / ACMECS

11. Complete Package Project
C.P. Contract Farm Operations
Complete Package Project
Farmers
BAAC
Dept. of Ag. Ext.
C.P.

12. Objective To educate new production technologies
by maximizing the yield with lowest cost
of production and risk reduction
To promote progressive farmers to be
leaders in each location which will later
help develop farmer society and income
increase

13. Complete Package Project
Cost Reduction/unit
Reduce Risk
Farmers with
Higher Income
Yield Increase/area
Income Increase/season
New Technologies

14. CP 888 Good Hybrid Varieties CP 989 CP 9988 CP 888S CP AAA CP KKK
CP QQQ

15. Seed Production

17. Appropriate Technology
Pre-Planting
Population
Chemical fertilizer & Herbicide Treatment

18. New Technology: Environmental Concern
Bio-Fertilizer
Organic Fertilizer
Bio-Pesticide

19. Pre Harvest Technology

20. Activities in THAILAND

21. Post Harvest Technology
Traditional model

22. Post Harvest Technology
Local Dryer Technology

23. Post Harvest Technology
Dryer & Silo

24. Contract Farming in GMS & ACMECS
Expansion to Neighboring Countries
Contract Farming in GMS & ACMECS

25. Champion Farmer : MYANMAR

26. VIETNAM

27. Laos

28. CAMBODIA

30. ACTIVITIES in CHINA

31. CP 619

32. - Cost & Benefit of Hybrid corn grower in GMS/ACMECS
Input
Land Prep and Planting
Harvest and Transport
Others
Total
Average Yield (Kg/rai)
Cost per Kg
Income
Price per Kg
Profit per rai
%Return on Investment
1,034
684
464
575
2,757
1,000
2.76
5,360
5.36
2,603 94
520
417
280
390
1,607
850
1.89
3,009
3.57
1,402 87
Thailand
469
338
439
375
1,621
800
2.02
3,000
3.75
1,379 85
326
646
304
264
1,540
725
2.03
2,764
3.81
1,224 79
Laos
Myanmar
Cambodia
1,392
700
188
3,280
720
4.55
4,500
6.25
1,220 72
Vietnam
China
2,650
743
1,104
250
4,747
1,080
4.39
7,452
6.90
2,705 56

33. GRAIN CORN : Selling price at farm gate in THAILAND
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001
2002
2003
2004
2005
2006
2007

34. GRAIN CORN : Buyer price at feed mill in THAILAND
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001
2002
2003
2004
2005
2006
2007

35. GRAIN CORN : at Chicago BOT
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2001
2002
2003
2004
2005
2006
2007

36. GRAIN CORN CONSUMPTION THAILAND
: 1,000 tons
item
2006
2007
2008
2009
2010
Domestic DEMAND
4,200
4,400
4,600
4,800
5,000
Supply in THAILAND
3,800
3,900
4,000
4,100
DIFF
-400
-500
-600
-700
-800

37. Supports Need from Government
Water source and irrigation
Climatic report and forecast
Infrastructure
Financial supports
Training
Intellectual property right

38. F Causes of Failure Uncontrollable Factors - Drought - Flooding
Communication gap Misunderstanding
3. Transportation Problems
Farmers
5. Team Work
6. Government Policy and Supports

39. Win + Win + Win Conditions for Success in Contract Farming Key Issues:
Production Technology
Pre & Post harvesting Technology
Technology Transfer
Gov. officer
Private Sector

40. Building TRUST
Mutual Benefit
4. Pricing Policy
Price Information Center
Market Price
Minimum Guarantee Price
Financial Support
Bank of Agriculture
Cooperative
Local Grain Collector
Human Resource Development

41. Thank you