1. CASE STUDY Response by a company in THAILAND

2. CASE STUDY KAMPHAENG – SAEN COMMERCIAL CO., LTD. Established in 1993 as a packing house in Central Thailand, selling produce through exporter Upgraded in 1999/2000 Ships green asparagus, baby corn, and a range of other tropical fruits and vegetables by air to the UK, the Netherlands, France and Japan Specialized in packed vegetables and fruits, including ready - to - eat packages; direct sale to high-end retailers Recently also sale to same retailers in Thailand Most products sold under own brand name KC FRESH

3. CASE STUDY Challenges and Response (1) Challenge In late 1990s, with the emergency of BRC and EUROGAP, buyers in UK voiced that upgrading standards would become necessary Response: proactive and offensive strategy Acquired land for establishing Good Agricultural Practice (GAP) Upgraded all facilities, introduced HACCP, ISO 9001 Extensive training of staff

4. CASE STUDY Response: (continued) Shortened supply chain and started direct export BRC accredited in 2003 After EUROPGAP was established, expansion of sales through contract farming Sales increased from US$ 3.3 million in 1999 to US$ 8.5 million in 2003 Expect 2004 US$ 11.5 million Challenges and Response (2)

5. CASE STUDY System of Contract Farming Supplier organizes farmers in groups, provides technology (GAP), provides input in kind, ensures compliance All input use is registered daily Farmers group has a small collection place, organizes collection, initial sorting, grading and coding Rules of compliance strict with self-control by farmers groups and supervision by supplier ( Internal Audit) End of 2003, 900 small farmers involved in contracts Loyalty farmers assured by 25% higher price than local market price

6. CASE STUDY Some characteristics of Asparagus production Labor intensive crop, attractive for families with many family workers 0.2 ha per family worker Income per family US$ 5,000-10,000 for 0.2-0.4 ha Compares to US$3/day

7. CASE STUDY Own production base and contract farming Cost of production on own production base 30% higher than in contract farming Yet a stable 35% of sales comes from own production base; 65% from contract farming Importance own production base: –basic security for meeting contracts –room for experimentation, benchmark information and demonstration

8. CASE STUDY Some factors for commercial success Daily or twice daily shipment by air to provide fresh product from farm to shop within 48 hours to Asia and 60 hours to Europe Regular shipment allows for low negotiated freight rates Relatively weak points in supply chain are: –Timely issuance of phyto certificates at export –Non-privatized cold chains at airport Other companies experimented with somewhat different models, that also proved successful After private sector proved success of contract farming model government became interested in supporting its expansion through a training program

9. CASE STUDY WESTERN CLUSTER GAP All small farmers under Western Cluster GAP will be accredited to the EUROGAP standard Either by direct accreditation PMO (Producer marketing organization) Certification by a national scheme benchmarked to EUROGAP

10. CASE STUDY The EUREPGAP policy covers the following issues : Traceability Record Keeping Varieties and Rootstocks Site History and Management Soil and Substrate Management Fertilizer use Irrigation Crop Protection Harvesting Post harvest Treatments Waste and Pollution Management, Recycling and Re- use Worker Health and Safety and Welfare Environmental Enhancement Complaint Form Internal Audits