chapter  11
16 Pages

Adams International: Tobacco Growing and Marketing in Northern Thailand

WithRuth Karen

Adams International (AI) is a joint venture tobacco company involving a Thai-Chinese family and W.A. Adams Company, Inc., of Durham, North Carolina, AI was organized in 1969, primarily to export leaf to Japan. In 1974, AI entered into a marketing agreement with Philip Morris, Inc., which provided for the sale of Thailand's oriental-type tobacco, if AI could meet price, quality, and quantity requirements. This agreement led to major new investments by AI and, for the first time, caused the company to establish its own satellite procurement system. By 1982, more than 40,000 small-scale farmers, for the most part in the underdeveloped northern and northeastern areas of the country, were cultivating oriental-type tobacco under contract.

After a difficult start, AI evolved an outreach organization that has proven most effective in transferring the technology for the cultivation of oriental-type tobacco. The heart of the program lies in the maxim laid down by the chairman of AI, which states that the farmers in the program must be thought of not just as producers but above all as human beings. The key to implementation is a staff of approximately 500 "village inspectors," who were selected from the more experienced farmers in the area, trained for their job, and who establish the close contact basic to confidence and loyalty. These village level inspectors report to and through a hierarchy of technical personnel, all of whom are visible to the rural people and have direct contact as needed with farmers, village leaders, and government personnel. The AI plan of growth and procurement has evolved smoothly and efficiently over the past eight years, to the mutual benefit of company, farmer, and nation.

As might be expected as a result of a corporate policy expressing deep concern for its rural constituency as human beings and not just as producers motivated by economic return, AI over the years has extended a variety of services to enhance the quality of farm family and community life. Yet, it has been cautious in the extent to which it feels it proper for a private company 174to take increasing social responsibility. Current events may be forcing management to examine its role in this regard.

There is a fundamental uncertainty in dealing with the highly competitive international market for leaf tobacco. AI is fully aware of this and for some years has been conducting research on alternative field crops and animal husbandry possibilities for introduction to the practices of its farmer associates. To date, encouraging productivity results have been attained, with crops like peanuts, sunflower seed, sorghum, corn, sesame seed, and tomatoes. Similarly, species suitable to the manufacture of fish meal have been cultured successfully. Clearly, the introduction of such new farming practices and crop marketing has great potential importance in diversifying and strengthening the economic base of both tobacco farmers and AI. Should this diversification take place in a way that maintains the satellite procurement system AI has created, the company inevitably will be drawn into a much deeper involvement, an ever-greater interdependency, with the rural people.

The speed with which diversification may proceed was brought into question when in the 1982/1983 season, the European Common Market (EEC) extended subsidies to Greece, quickly matched by the Turkish government in favor of its growers, permitting oriental-type leaf from these countries to compete successfully with Thai tobacco. The impact on Thailand and AI was serious, immediate, and negative. It is too soon to observe how AI will react to this competitive situation, or what impact will be felt among the small-scale farmers now engaged with AI.