As inflation hits historic highs in the Mekong Sub-Region, the region’s farmers feel its impact the hardest.
Just this year, prices of nitrogen-based fertilisers increased to about THB30,000-35,000 per tonne, up from THB12,000-15,000 per tonne in 2020. This price hike will increase production costs of rice by THB69 billion, causing pain not just to consumers, but particularly farmers, who already have very slim margins to begin with.
Arrut Navaraj believes a solution may lie in organic farming. As founder of the Thai Organic Consumer Association (TOCA) and key proponent of the Sampran Model of organic trade, Arrut is leading efforts to increase awareness of organic farming in Thailand, and its benefits for hotels, restaurants, tourists, and destinations.
We asked him to talk about the Sampran Model, TOCA and its innovative new platform, and how farmers have become partners with hotels and restaurants in the organic journey.
This interview has been edited for length and clarity.
Can you tell us how you got your start in the organic farming and tourism business?
We have a property at Nakhon Pathom called Suan Sampran, which was started by my grandparents about 60 years ago. When I came back to manage the property about 15 years ago, I started to work with the local farmers, helping them to produce organic vegetables and fruits for our hotel. Originally, it was purely for business reasons.
But when I started working with the farmers, I started to get interest from local NGOs like the Thai Health Promotion Foundation and the Thailand Research Fund, and they gave us funding to create a business model linking hotels and restaurants to local farmers directly.
The business model is called the Sampran Model, which we define it as an inclusive business model for the tourism industry. The model supports local farmers, helping them switch from conventional farming using chemicals to organic farming.
What is the ultimate outcome you’re aiming for?
Our goal is to drive for an organic society: hotels and restaurants directly connect to local farmers, empowering them to switch from conventional to organic. We also get our customers involved: at our restaurants, they receive information on the sources of their food. We also take them on farm visits, organic tourism.
We’re doing this not just for health reasons. We’re doing this to help local farmers.
In Thailand, one-third of our population are farmers, and nearly all of them are using chemicals. We only have about 500,000 organic farmers out of over 20 million conventional farmers. We only have about 1 million rai of organic farming land as opposed to 150 million rai of total agricultural land.
With the war in Ukraine, the price of chemicals has gone up two or three times. Conventional farmers are facing really high production costs. So it’s a really good time for them to switch to organic.
With organic farming, you aren’t importing harmful chemicals for farming. You’re making everything locally: fertilizer, biocontrols for organic farming. You’re not relying on imports. You’re helping the country to reduce the carbon footprint, go net zero. And you’re helping the farmers get rid of debt, because most of the farmers are in debt because of using chemicals.
So it’s a win-win-win: it’s health, environment and social.
What is the scope of the Sampran model now?
We’re working with hotels and restaurants in Chiang Mai, in Phuket at the moment, and some in Bangkok, to get the model going, because we believe it’s going to be a provincial area-based model, you know, connecting hotels and restaurant with farmers locally.
Because every province has restaurants and hotels and farmers. If we can actually get them to be partners, this can actually lift the image of sustainable tourism for that province.
If you start on the country level, I think it’s too big. But for people in that provinces, they know each other. They feel loyal to the people in the province, they want that to be prosperous, to be sustainable. So so basically, we only have the tools. We need the people in the provinces to adopt this. And then once we have the model ready, we can we can expand throughout the country.
Could you talk about how farmers benefit directly from the Sampran model?
Traditionally, in hotels and restaurants, we’d buy from suppliers. And the suppliers would buy from a middle market. The middle market would have another supplier sourcing the raw materials from farmers. So there’ll be about three middlemen in between the farmer and restaurants and hotels, traditionally.
For example, if I pay for morning glory (water spinach), I would pay about THB 30 to 40 per kilo to the middleman. But the farmers only get about THB 15 per kilo. So when I buy directly from farmers I pay them THB 30 a kilo; I pay the same as I pay to the suppliers. But the farmers get at least twice as much.
One, it’s really worthwhile for the farmers. Two, the farmers don’t need to use chemicals, so they reduce production costs, health improves, and they can actually do production planning according to our needs. So they don’t actually overproduce. So for farmers, it’s totally worth it.
For us businesses, maybe the food cost might go up slightly. But we’re buying direct, so our food cost doesn’t go up that much. It’s such a huge selling point and it’s helping our business tremendously PR-wise: getting people to to differentiate us from other hotels and restaurants.
We have a line of products that we know exactly who is behind it, which farmer is growing the vegetables or fruits for the product. So it works for the farmers, it works for us and I’m sure our customers appreciate it.
I understand farmers are conservative; if they’re using conventional farming methods, they might be skeptical. So how were you able to convince farmers to to adopt the Sampran model and go full organic?
When I meet farmers, most of them are in debt, so they want to get rid of that debt. If there is a way that they can actually have a stable alternative to the middleman, it’s through hotels and restaurants.
First, I have to make sure that our hotels and restaurants are ready to take up their their produce. So normally I work on the demand first: it’s a market-led business model.
To convince the farmers, if they’ve been growing coconut conventionally, we tell them they can convert to organic coconuts, so they don’t have to change the type of produce. If they’re fruit growers, you can’t really encourage them to be a rice farmer, you know! Let’s stick to what they’re used to.
I would convince them with a new business model, and that the fact that we would be coaching them, we would be supporting them to go through the transitional period.
And the easiest way is for conventional farmers to join the organic farmers. So the organic farmers would be the coach. I know organic farmers all over the country – in Chiang Mai, farmers can actually join local groups who would be their coach, and they could actually be a member of the organic farming groups there.
In the end, what they need is the certification. Because when you say an organic farmer, you can’t just say, “I’m an organic farmer,” you need proof.And that proof comes the form of organic certification. If you want an international one from EU or the USA, you have to pay a lot of money, and farmers won’t pay that.
So we get them to do what we call the participatory guarantee system, the PGS system. It’s been used for about 30 years already by IFOAM, the International Federation of Organic Agriculture Movements. IFOAM have been using this for farmers who don’t have money to pay for certification.
You can form up a group, and then you have a peer auditing system. We coach them to have their own PGS and to come up with a group. Once they have the PGS, they can actually be qualified as a real organic farmer.
Could you tell us about your other partners and how were you were able to get them on board?
Normally when I work with hotels and restaurants, I don’t actually try to convince them to change all their menus to into organic, it’s impossible. So basically I would say, okay, just start with one product first, maybe start with rice.
Rice is probably the easiest one because it’s easy to transport and easy to store. Every hotel and restaurant in Thailand uses rice. So start with that, and start with one or two vegetables for them to gain confidence and for the hotels to get to know farmers.
Eventually, we want them to become partners, not just suppliers. Because farmers need to understand what the hotel needs; hotels also need to understand the farmers.
For example, the Athenee Hotel in Bangkok, I connected them with farmers about five or six years ago. Now they have a long term relationship: the hotel knows the farmers very well, starting with rice, and now they’re buying all the post-harvest crops, like red onion, shallots, garlic, etc. Whenever the hotel has an event, sometimes they also invite the farmers to come to the event. So it’s actually helping the hotel for marketing as well.
So even in this relationship, it’s a win-win situation as well.
I think the relationship between farmers and hotels is really useful for both sides. And you know, they work with production planning together, they’re developing products together.
I think it just really to get them started and for them to see there’s a new way of doing business, you don’t have to be buying from suppliers. You can actually be a hotel or restaurant who actually leaves that comfort zone.
At Athenee Hotel, the GM is Choo Leng Goh, and she is really one of my heroes who actually helped. I remember when we started the rice project and I called in many hotels and convention centers, they said, “Our accounting department says the credit term has to be two months.”
Choo Leng said, “No, it can be reduced to two weeks! Farmers need cash. We’re hotels, not financial institutions. Our accounting department can work a bit faster.” When she started doing it, all the hotels adopted a two weeks policy, which is fast! The farmers, every two weeks they come with the rice and they get the money. Why do they need to wait for two months? You can actually break away from your comfort zone, you know – you don’t have to always stick to the norm.
It’s brilliant because the farmers also increase confidence in the model. And more farmers will join the system as well!
The farmers feel that they have hotels as partners. Before, they were exporting their organic rice. And the export market is quite volatile, because if overseas buyers see the rice price in Vietnam is cheaper, they will switch to Vietnam.
Now, the farmers are getting long term partnerships with hotels in Bangkok. Imagine if one hotel consumes ten tonnes of rice a year, and a tonne cost about THB 40,000. If all the hotels can switch, it’s a huge economic impact!
Can we discuss the impact on the tourism business? How is the Sampran model directly influencing or affecting tourists?
We’ve been working with the Tourism Authority of Thailand (TAT) on organic tourism. I view it as a long term movement.
About three years ago, I founded the Thai Organic Consumer Association (TOCA). We have a digital platform; we’re uploading organic farmers onto the platform. So hotels and restaurants who become members of TOCA can reach these farmers directly.
Now, TOCA is supported by TAT and the Thai Chamber of Commerce. Government agencies are encouraging hotels and restaurants to use the TOCA platform.
TOCA is working with hotels and restaurants in Phuket and Chiang Mai to become the model for the rest of Thailand. We’re connecting them with organic farmers. When tourists come to visit these hotels and restaurants, they know that they’re going to eat menus using organic food, and they can actually visit the farmers as well.
We’re coming up with what we call organic tourism, the routes or the packages where they can visit the farm, and these farms would be linked to cafes and restaurants. We don’t just call them organic, we call them low carbon routes, because these hotels and restaurants are managing their food waste themselves and not sending it to the landfill. You’re actually helping the environment, actually reducing carbon footprint.
These routes will have shops with refill stations or specialise in upcycling plastic. One shop I visited was actually upcycling fishing nets into bags. So all of these activities will be documented on the TOCA platform. This is something which is going to be done by the middle of this year.
So if you’re a hotel or restaurant, you can buy from organic farmers; manage your waste; and do other carbon reduction related activities, documenting all of this on the app. When tourists come, they can actually download the app and you can show the impact to the tourists.
Eventually, the app can be downloaded by tourists as well. The app will quantify the impact of buying from an organic menu, you can see the impact you make when you support this restaurant.
All this is in the pipeline at the moment. The app is going to be rolled out in the second part of the year. Right now, we have the low carbon routes as packages for tourists, which is being promoted by the Thai Environmental and Adventure Tourist Association, TEATA. TOCA and TEATA are working hand in hand to promote these low carbon routes.
What’s your opinion about the prospects of organic tourism in Thailand? What’s the potential for organic tourism in Thailand for the next few years?
In Thailand, we have the BCG economy model as the national agenda. We’re supporting the BCG economy model directly. This is the way that TAT can encourage hotels and restaurants to join the BCG economy model.
When you talk about BCG, people would think, “Oh, it’s only for big companies like the Petroleum Authority of Thailand.” No, it’s something that hotels, restaurants, and consumers can join.
When when we say organic tourism, it’s something that supports BCG and it’s for the long term sustainability of our country.