chapter  7
14 Pages

Charoen Pokphand: Pig Raising in Four Experimental Villages in Thailand

WithRuth Karen

Charoen Pokphand (CP) is a Thai corporation that started in 1921 as a marketer of vegetables and is now a diversified multinational, the largest agribusiness company in Southeast Asia. In 1977, CP launched an experimental program of rural development, built around the creation of four demonstration villages, each with an economic core of pig production to be purchased by CP, and each with a design aimed at crop diversification, sometimes but not always related to the long-range plans of CP for product diversification. (Chapter 2 gives a description of an analogous corporate approach to agricultural development on the part of Hindustan Lever Limited in India.) Like the Haggar family in the Sudan (Chapter 6), the Thai family that started and still controls CP reflects a special feeling for the interdependence of the company and its economic future and the well-being of rural people as raw material suppliers, buyers of corporate products, and human beings whose needs are more than economic in nature.

Perhaps more than any other case in this book, the CP experience illustrates the extent to which agribusiness management can, at a profit to all concerned and with government approval, entwine itself with the totality of rural development during the early years of transition of rural families from subsistence to a cash economy. Four small villages have been created from nothing. Participating farm families (roughly 225) have been settled in homes provided by CP. Farmers have been given all the necessities to start pig production, and though they participate freely, they have had nothing to do with or to say about the four project designs, each different in structure and operation, into which their lives have been folded. Although philosophically heart-warming, economically successful, and intriguing in the changes the program has initiated, it is still true that the very success of each village has generated an elite that is resented by others. This is a worldwide problem that CP recognizes but has not yet dealt with.

CP has done more than establish four models of agricultural and rural development, each serving the company as a source of 112supply. It has also demonstrated a unique model that satisfies the demand for immediate profitability for the corporation and the farmer. Each village is designed as a profit center. All development costs have been financed by bank loans, based on feasibility studies. Production levels in each village were predetermined to yield the necessary cash flows at company processing facilities to justify the investment, and these village production goals were predetermined to yield a striking increase in net farm income compared to return from the land used for traditional crops grown in traditional ways. There is a warmth of spirit, ingenuity in planning, skill in management, level of farmer response, and degree of learning by government officials that warrants worldwide respect and study.