Thailand Board of Investment North America

(source: Thailand Investment Review, May 2018)

There is a saying in Thailand that agriculture is the backbone of the country. More specifically, the phrase refers to the farmers who work tirelessly to ensure that their fellow countrymen and, increasingly, citizens beyond their own national borders are well-fed.

An old sector upgraded with new technology

There is a saying in Thailand that agriculture is the backbone of the country. More specifically, the phrase refers to the farmers who work tirelessly to ensure that their fellow countrymen and, increasingly, citizens beyond their own national borders are well-fed. Through generations of such productivity combined with the fertile nature of Thailand’s tropical climate, the country has established itself as one of the world’s most renowned producers of agricultural products. Rice is, without doubt, the champion of that reputation with production recently soaring to a new high of over 11.48 million tonnage worth 5.1 billion USD in 2017. This figure represents a staggering 15.9 percent annual growth from 2016 and, from a global point of view, reinforces Thailand’s position among the world’s leading producers of this agricultural staple.

Looking ahead, there is no doubt that Thailand will continue to be a leading supplier of rice and other agricultural products to the world. However, as the global economy expands, so too does its population, and with it, the obvious demand for agricultural produce. According to the Food and Agriculture Organization (FAO) of the United Nations, the global demand for agricultural commodities is expected to grow at approximately 1.4 percent per year from now until 2030 and then at 0.8 percent annually onward to 2050. These annual figures compound into a staggering 40 percent increase for the 2018–2050 period. In such an environment, land scarcity will become one of the major challenges facing the world. While there are still untapped arable lands that can be put into proper use, the volume of new cultivatable land will simply not be sufficient to keep pace with demand. As a result, productivity and yield rate are the keys to ensuring future food security for the planet. 

As is the case with other sectors, modern digital technology offers a solution. At every level of the agriculture industry supply chain, new technologies are transforming the sector. For upstream activities, the Internet of Things (IoT) and increasingly intelligent sensor systems are enabling farmers and growers to monitor their produce in real-time and adjust input accordingly. At the downstream end of the chain, the ongoing development of better machinery has made food processing more efficient and less costly. On the distribution front, e-Commerce has also recently opened up to agricultural products. These are just a few examples of the innovations that are driving the agricultural industry into new territory. This article will be focusing on the digitalization of commodity production, an activity more popularly known as ‘smart farming’. 

Samples of local innovation in smart agriculture

Thai entrepreneurs are already setting their sights on how farming should be done in the future. Here are some examples of 100 percent locally-made innovations that will revolutionize the agriculture industry in Thailand. 

Researchers at Mahidol University and Granmonte Farm, a renowned vineyard in Nakhon Ratchasima Province, have created the Micro-Climate Monitoring System. A dedicated network of sensors detect key data, including temperature, humidity, light intensity, wind speed, and air pressure, among others. These data are then analyzed by the intelligent system to increase the output yield and reduce the risk of failure. As one specific example, the irrigation system is automatically activated when the detected humidity is low. This feature, combined with the constantly-on internet connectivity, not only increases productivity but also gives growers the freedom to manage their farms remotely.

A similar feature can also be found in the Smart Farming Kit, an IoT-based irrigation control system developed by the Faculty of Science and Technology at Thammasat University. Using this product, watering cycle timing can be preset in advance, while at other times, irrigation can also kick in automatically when soil level humidity falls below a pre-designated threshold.

Formed in 2015, FarmD Asia is a smart farm service provider that aims to boost agricultural productivity through its flagship product, a pre-programmable pesticide-releasing aerial drone which can cover approximately six to eight acres of land in a single flight. In addition to reducing farmers’ risk of exposure to chemicals, this technology also saves time and lowers cost. Another of FarmD Asia’s products is a specialized environmentally-controlled mushroom cultivation chamber. The internet-connected chamber enables growers to adjust and optimize temperature and humidity remotely in order to maximize output.

Another agro-tech company, Thai Advanced Agri Tech, has enabled a reduction in planting spaces through its I-Stack planting kit, a stacked vertical hydroponic pot which can potentially save up to three times the space required for conventional planting. The pot is made of food-grade plastics that are highly durable and last for four to five years.

The companies and their innovative products mentioned here represent just few basic examples that attest to Thailand’s current standing as an emerging player in the global smart agriculture industry and its related services. Foreign investors are therefore invited to invest in Thailand and use the country as a base from which to expand their operations into the region as well as a compatible setting in which to test new products or services. 

Thailand’s readiness and government support

In a country with such well-developed expertise in agriculture as Thailand, the possibilities afforded by the digitally-enabled farm and agriculture business have long excited all related stakeholders and interested parties, including farmers, policymakers, academics, and industry business operators, among others. Through this openness to change and progress, a wealth of knowledge and expertise in the future of farming has already driven agriculture in Thailand into an exciting new era years before the term ‘smart farming’ came into the spotlight, making Thailand’s agricultural industry second to none when it comes to institutional support and industry readiness.

From the field of academia, the Agricultural System Integrator (ASI) launched by the National Science and Technology Development Agency (NSTDA) was a program designed primarily to equip modern farmers with the technology agriculture-integration mindset they require to start and run a smart farm successfully. This short course provides its participants with business and networking skills, knowledge on smart agriculture technology, and a standard accreditation framework, as well as a field workshop, which provides participants with a true sense of how an agriculture business and farmers in the 21st century should operate. 

In terms of government support, Thailand Board of Investment (BOI) stands ready to provide its full support to smart farming investment in Thailand. Under the current investment promotion scheme, smart farming and its related services (i.e., the manufacturing of modern agriculture products and services related to modern agriculture, e.g. detection or tracking systems, resource regulation systems, and smart greenhouse systems) are activities classified under the A3 category of the Activity-Based Incentives. As a result, smart farming investment will be granted 5 years of corporate income tax exemption with no maximum capped amount, along with an exemption on import duty for machinery and raw materials used for the production of exported goods, given that such investment includes the development of system and software for resources management that are integrated and capable of collecting, interpreting and analyzing data. 

The readiness and support that Thailand provides underscore the country’s determination to maintain its reputation as the world’s foremost supplier of agricultural products and to continue supplying the world with the best quality agricultural products. To this end, Thailand has committed to further enhancing technological absorption and integration in the agriculture sector in order to ensure that all previously mentioned goals can be achieved.

© 2013 The Board of Investment of Thailand. All rights reserved.