German-Thai Cooperation Project to Promote the Sustainable Development of Cluster Farms in Thailand


The agricultural sector still plays an important role in Thailand’s economy: during the agricultural census of 2013, a total of roughly 5.9 million farms averaging 3.7 ha were recorded. An average of 4 people (mostly family members) are employed per farm - roughly one-third of Thailand's population is employed in the sector. The value of agricultural products of all of Thailand’s exports amounted to more than 18 % in 2017. 

However, low production efficiency is an important problem for Thai agriculture. It is estimated that no sufficient profit margin is generated on approximately two-thirds of the agricultural land; as a result, the farms are often highly indebted. 

The Thai government, in its 20-year strategic development plan (2017–2036), aims to promote modern forms of production which increase the efficiency and productivity of agricultural production, and increase farm incomes. A concept known as ‘Smart Farming’ or ‘Agriculture 4.0’ is designed as a key to im-prove the cost-effectiveness and productivity of farms by equipping them with modern technologies.

However, to access these technologies requires a high amount of investment, while the costs-benefit ratio is not advantageous for small cultivated areas. To address the latter, the Thai government supports the establishment of ‘Cluster Farms’ to enable farms to engage in joint management, investments and cooperation in order to en-large the farm size, and modernize production methods, thus reducing unit production costs, increase productivity, develop quality to meet standards, and to secure markets.