The Historical Movement of Cooperatives in Thailand
Cooperatives in Thailand, like in all developing countries, have been initiated by the government since 1915 with the prime aim of being a means of improving the livelihood of small farmers. This is due to the increasing debt problem resulting from farmers suffering from the shift from self-sufficient economy to trade economy. Natural disasters such as droughts and floods have further worsened the debt situation for the farmers. Consequently, they have lost their farmland and become laborers, leaving their debts unpaid.
The first cooperative in Thailand was named Wat Chan Cooperative Unlimited Liability and was established by the government on February 26, 1916, in Phitsanulok. It followed the Raiffeisen credit cooperative type with the single purpose of providing farm credit and being organized as a small village credit cooperative to help severely indebted farmers. The success of this type of cooperative in preventing many farmers’ land from being foreclosed by the money-lenders led to the increasing number of small village credit cooperatives all over the country. Small credit cooperatives had prevailed in the country until 1983 when other types of cooperatives were then established in response to the people’s needs (i.e. production and consumer cooperatives were)
The increasing number of cooperatives also led to the establishment of the “Cooperative Bank” in 1947 through government capital. Village credit cooperatives were urged to increasingly hold share capital in the Bank with the hope that they would, in future, be owners of the bank which was their own financing center. In 1952 and 1953, two provincial cooperative banks were established in the Chiang Mai and Uttaradit provinces respectively by the affiliation of village credit cooperatives in each of the two provinces. The two provincial cooperative banks served their affiliates so well, both in their credit needs and depositing surplus funds. Unfortunately, the enactment of a new ‘Commercial Banks Law’ in 1962 laid down that the acceptance of deposits on ‘current accounts’ could only be operated by commercial banks which must be organized in the form of a ‘limited company’. The two existing provincial cooperative banks had, therefore, to be reorganized as credit cooperative federations and a program to set up new cooperative banks was dropped. In 1966, the government-cum-credit cooperative-owned Bank for Cooperatives was reorganized as the ‘Bank for Agricultural and Agricultural Cooperatives’, a state enterprise, functioning as a financial center of agricultural cooperatives including lending directly to individual farmers.
In 1968 with the objective to strengthen the cooperative movement, the Government enacted the Cooperative Act, B.E. 2511, which allowed the establishment of the Cooperative League of Thailand, functioning as the apex organization of the cooperative movement. The said cooperative Act also allowed for the amalgamation program which combined the neighboring small village credit cooperatives, paddy and marketing cooperatives, land improvement and land settlement cooperatives into a large scale cooperative at district level performing multipurpose functions and which were officially categorized as agricultural cooperatives.
In 1999, new cooperative act as ‘Cooperative Act, B.E. 2542’ was issued and has been enacted since then.
At present, the cooperatives in Thailand are officially categorized into seven types, namely:
- Agricultural Cooperative
- Land Settlement Cooperative
- Fisheries Cooperative
- Consumer Cooperative
- Thrift and Credit Cooperative
- Service Cooperative
- Credit Union Cooperative
Organizational Structure of Cooperative in Thailand
Cooperatives in Thailand are vertically organized in a three-tier system; primary cooperatives at district level and federations at provincial and national level. The primary cooperative consists of individual members while members of provincial and national federations are cooperatives. The members elect the board of directors through the general meeting with maximum number of 15 persons for cooperative development policies formulation. The board of directors, then, appoints a manager and staff to run the cooperative business.
Five or more cooperatives at primary or provincial level can form a provincial or national federation together to undertake joint activities on behalf of their affiliations such as processing and trading of agricultural products.
At national level, there is the Agricultural Cooperative Federation of Thailand of which all 76 provincial agricultural cooperative federations are affiliates. There are also the Sugarcane Growers Cooperative Federation of Thailand, Swine Raisers Cooperative Federation of Thailand, Dairy Cooperative Federation of Thailand and Onion Growers Cooperative Federation of Thailand. Thrift and Credit Cooperatives, and Consumer Cooperatives are affiliated in a national federation of their own.
All types of cooperatives at all levels, according to the Cooperative Act, B.E. 2542, have to implicitly be affiliates of the Cooperative League of Thailand (CLT). The CLT is functioning as an apex body of the whole cooperative movement. It does not run as a business enterprise, but acts as a facilitator, coordinator and provides educational support in the promotion of all cooperative progress.