CPF registers as farming contractor with the government Being first company providing farmers insurance scheme

General Press Releases Monday January 29, 2018 17:32
Bangkok--29 Jan--CPF

Charoen Pokphand Foods PLC (CPF) has completed the registration under the newly-enacted Contract Farming Act, being one of 87 farming contractors in Thailand. Aside from compliance with the law, its vows to maintain the leadership in the livestock industry through the first of its kind insurance system for its small-scaled contract farmer. This CPF enhance the company's more than 5,000 contract farmers sustainability.

Mr. Narong Jiemjaibunjong, CPF's Senior Vice President, announced the complete registration under the law which demands the registration of all farming contractors with the Agriculture and Agricultural Cooperatives Ministry.

"Today, CPF is one of 87 Thai contractors having assisted farmers and supported the agricultural sector. CPF has been already registered as a farming contractor and completed the prospectus as required by Thai's law," Mr. Narong said. He added that CPF's contract farming operations 5,960 contractees engaged in chicken and swine farming. Sixty per cent of them has been doing business with CPF for over 10 years.

Aside from complying with the law, CPF is the first livestock company setting the goal to manage risks for income-guaranteed small-scale farmers whose 100% output is supplied to the company. Believing that risk insurance will help add confidence, stability and sustainability, CPF will extend the "insurance" scheme to cover farm structures and equipment in times of disasters though the properties belong to farmers.

"Farmers operating with loans are normally required to insure their structures and equipment for 8 years, but most of them do not extend the insurance after the loans are paid off and take their own risks. CPF is shouldering this risk on their behalf for their own sustainable stability," Mr. Narong said.

The insurance scheme will not cover large-scale farmers which enjoy price guarantee. These farmers, registered as business enterprises, earn high income and are able to shoulder their own risks.

CPF has improved its contract farming agreement in line with UNIDROIT principles of the International Institute for the Unification of Private Law, the No.1 independent intergovernmental organization, to set best contract farming standards whereby farmers are treated as business partners and should grow together with the company. The review by Chu-lalongkorn University's Faculty of Laws shows that the agreement is fair and universal. The agreement has also been replicated in several countries by the Food and Agriculture Organization of the United Nations.

CPF initiated the contract farming scheme in 1975 to support small-scaled livestock farmers. Under the scheme, it equips farmers with farming technology and knowledge. It also guarantees markets for their output and lifts their access to finance, resulting in stable income, better quality of life and greater ability to finance their children's education.

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