Bangkok: Authorities have initiated a crackdown on nominee firms and foreign-owned coconut processing plants as part of efforts to address the significant decline in fragrant coconut prices. The Department of Business Development, Ministry of Commerce, in collaboration with the Ombudsman and related agencies, embarked on field visits to the provinces of Samut Songkhram and Ratchaburi. The purpose of these visits was to investigate nominee practices within the fragrant coconut industry and fruit purchasing centers, and to engage directly with farmers to better understand the challenges they face due to the sharp drop in coconut prices. Plans are underway to amend existing laws and enhance legal measures to ensure justice and stabilize the prices for Thai farmers.
According to Thai News Agency, Mr. Poonpong Naiyanapakorn, Director-General of the Department of Business Development, Ministry of Commerce, tasked the Director of the Illegal Business Prevention and Suppression Division and the nominee enforcement team with conducting field visits to the provinces of Samut Songkhram and Ratchaburi. The team was accompanied by Mr. Songsak Saichue, Chairman of the Ombudsman, and representatives from the Department of Internal Trade, the Office of the Competition Commission, and other relevant agencies. The aim was to gather facts and information about the hardships faced by farmers due to the drastically low prices of fragrant coconuts, as well as to follow up on investigations into nominee activities within the fruit purchasing and distribution sectors.
Mr. Poonpong revealed that during a meeting at the Samut Songkhram Provincial Hall, representatives from the Department of Business Development disclosed findings from a random inspection of trading companies with foreign ownership not exceeding 50% in Ratchaburi Province. Collaborating with the Central Investigation Bureau (CIB), they found evidence of nominee practices wherein Thai nationals hold shares on behalf of foreigners. The Department of Business Development is preparing to propose amendments to the Foreign Business Act, aiming to classify nominee activities as a predicate offense for money laundering. Additionally, draft regulations from the Prime Minister concerning a committee to address illegal foreign goods and businesses are being prepared, enabling integrated collaboration among various agencies for sustainable solutions.
The delegation proceeded to meet farmers in Phraek Nam Daeng Subdistrict, Amphawa District, Samut Songkhram Province. Farmer representatives reported that the current price of large coconuts has plummeted to only 3 baht, and small coconuts to a mere 50 satang, while the production cost stands at 7 baht per coconut. This has resulted in financial losses for farmers, depriving them of the funds needed to purchase fertilizer to enhance the quality of their coconuts to meet international market standards. Furthermore, farmers indicated that government assistance measures, such as promoting their products in modern trade outlets, have been insufficient due to the absence of packaging plants in the area. They emphasized their proficiency in production over marketing and appealed for government assistance in finding markets for substandard coconuts and providing fertilizer for their orchards.
Subsequently, the delegation visited the Wat Phleng Large-Scale Aromatic Coconut Growers Agricultural Cooperative in Ratchaburi Province. The cooperative requested government support to expand their market reach to European countries, reducing reliance on the Chinese market. They also sought funding to transition their farms to organic farming systems, aligned with market demand. Additionally, they addressed issues of "fake coconut water" arising from foreign orders and unfair practices regarding substandard coconuts. The farmers suggested implementing measures to enhance competitiveness in international trade, strengthen bargaining power with foreign buyers, and promote Geographical Indication (GI) coconuts internationally to increase product value. The PK COCO FARM community enterprise group proposed government support for cold storage technology and solar cells to reduce the cost of storing produce, noting patterns of foreign fruit wholesalers controlling prices due to their knowledge of true costs.
Mr. Songsak Saichue, Chairman of the Ombudsman, provided recommendations to relevant agencies on three key issues:
1. Establish measures to control foreign-owned agricultural product purchasing businesses, ensuring fairness for Thai farmers and preventing market dominance.
2. Integrate supply chain management, with the Ministry of Commerce and the Ministry of Agriculture jointly overseeing logistics and distribution systems.
3. Increase the frequency of inspections for substandard products to maintain the reputation of Thai coconuts and combat counterfeit coconut water.
This collaborative field visit aims to expedite the restoration of justice and price stability for coconut farmers. The Department of Business Development is committed to promoting stability for entrepreneurs and investors, building a positive national image, while firmly opposing nominee practices that undermine the economy. The Department pledges to cooperate with all sectors in investigating businesses suspected of nominee activities, with decisive legal action against violators. Holding shares on behalf of foreigners is illegal and detrimental to economic stability. The public is encouraged to report suspicious businesses suspected of being nominees through the Department of Business Development website, www.dbd.go.th, under "Report Nominees," to support the creation of a transparent and fair trading system.