NEW GENERATION OF COFFEE ENTREPRENEURS: BAN RAE-BANNANG SATA YOUTH GROUP
The Ban Rae-Bannang Sata Youth Group is an informal gathering of young people in the Ban Rae and Bannang Sata communities and surrounding neighborhoods to do a variety of activities. The group, for example, has a soccer match at least once a month, or meets once a week for coffee, sometimes goes rafting, does volunteer activities, helps natural disaster victims, and carries out other social work. These youths are an important driving force of the local civil society. Their activities reflect the attitude, ambition, and plans they have for their own homes.
The seven-step ladder to the sustainable coffee market of the Ban Rae youth group
As the Yala coffee plantation is coming back and the current coffee market is opening up, the youths of Ban Rae are taking part in this economic activity because they see the limitations of traditional entrepreneurs in the community and the aspects they can improve. Young people come to help with media, marketing, and marketing communications. The Covid-19 situation has made it possible for young people to devote more effort to this business as the economic depression in the capital has forced them to return to their homeland. Many of these young people have a strong interest in coffee and can immediately participate in the work of the group and strengthen the group with their diverse backgrounds and work experience in Thailand and abroad. Many are overseas graduates from Indonesia, Sudan and beyond. These young people are united under a common goal to preserve and inherit this unique local heritage that otherwise will disappear, and to upgrade this OTOP product with more attractive packaging to increase income for the community.
Once they established a clear common goal, the next step that the Ban Rae youth group took is to survey the supply of the traditional coffee market. They have found that the traditional ground coffee business is already dominated by a few operators with factories. The major operator is Tra Mue Traditional Coffee (O-Liang), which is the same owner as Cha Tra Mue and enjoys its upper hand from the economy of scale and the industrialized production. The company prices their coffee product at 20 THB for 100 grams and 39 THB for 400 grams. What these young entrepreneurs can compete in the traditional coffee market is, therefore, not the price but the product development. They found that, on average, traditional products with modern packaging and extensive marketing communications are priced at around 300 THB/ 1 kilogram, or about 30 THB/ 100 grams, which is not much different from the price of industrial products. Community enterprises will be able to make their way to the market by building local brands and highlighting traditional and authentic identities and methods. In addition, as coffee production is a household activity and products are sold at the producers’ own homes, the community can also highlight this real homemade element while enhancing product value through storytelling, fusing historical trivia and curiosities about Yala as an ancient coffee growing area, the traditional way of life of the local and their unique way of coffee processing and consumption, as well as the social status of coffee in Ban Rae. In the final point here, coffee is a drink for auspicious events, such as weddings, and the host or the homeowner has to pound the beans themselves for the guests and serve it with coconut sticky rice. Based on the market survey, the youth group of Ban Rae chose people in the age group of 30-60 or working age as their target customers.
The Ban Rae Youth Group has been receiving support from various agencies. The United Nations Development Program (UNDP) and Citi Foundation, in cooperation with Prince of Songkla University, provides technical support, including tools, skills training, management, standardized coffee production, as well as marketing and media production. The Subdistrict Administrative Organization is also actively supporting the group in making coffee sachets and helps find new markets outside the community while building a network of coffee operators in the neighborhood. Networking allows villagers to exchange and study the differences among of each other, such as new coffee processing and brewing methods, various hand grinding methods, fresh coffee, drip coffee, or carbonated coffee from the Ayerweng neighborhood.
The main challenge of the Ban Rae Youth Group in terms of production standard is the lack of facilities, in particular community roasters which requires skill training. In addition, even though coffee products of the group have been promoted as an OTOP product, there is still a lack of certification from the Food and Drug Administration and Halal standards, resulting in limitations in expanding domestic and international markets. The main obstacle to overcoming these challenges is budget. The group still needs a lot of financial support, and this is where the government and relevant agencies can provide targeted assistance.
Bannang Sata Coffee Growing Site
Led by a young imam, the Bannang Sata Youth Group, which is in the same youth network as the Ban Rae Youth Group, has played an important role in solving the problem of high raw material costs by growing and giving out coffee seedlings to farmers in the network and developing a coffee cultivation learning center. The young imam said that in the old days when coffee trees were grown in this area, coffee beans were sold to the main markets in Chumphon and Surat Thani. Yala Robusta coffee is also one of the many coffee varieties across the country that have been selected and improved by Chumphon Horticulture Research Center in 1989, resulting in new Robusta cultivars – Chumphon 2 (FRT65), Chumphon 4 (FRT09), and Chumphon 5 (FRT68) that are distributed to farmers today. The government encourages Yala farmers to grow Chumphon 4 and 5 Robusta coffee. This policy is like bringing the coffee back home since its original growing place is Yala.
The Bannang Sata Youth Group, like the Ban Rae Youth Group, sees an expansion in the coffee demand, which means that there must be a market for coffee production. Many believe that the cultural value that the community has been accumulating and will give them an upper hand in the battle for market shares. And with the help of modern technology, they believe that coffee cultivation can become a real sustainable occupation. Compared to other cash crops previously promoted by the government, coffee planting appears to be the most cost-effective use of the land. For example, one year of rubber tree plantation is equal to only half a year’s job because the rubber tapping can only be done on certain days and at specific times, and the current rubber price is falling enormously. At the same time, coffee plants begin to yield when the plants are 3-4 years old and will reach full yield at 6-8 years old, but one coffee plant yields about 3 kg of coffee beans. One rai (0.16 hectare) of coffee plants will yield 120 tonnes of coffee beans. Therefore, compared to the price per rai and time spent working, coffee planting is more profitable than rubber. In the national scale, coffee has emerged as another cash crop that many farmers are cultivating today. From an intercrop in orchards or rubber plantations, coffee has now become one of the main crops and sees its cultivation expand on a large scale. Still, the demand for coffee in the market exceeds the supply. One participant concluded briefly, “The market is large, but the growers are small.”
The coffee bean supply survey gave the Bannang Sata youths confidence that they could upgrade their coffee growing site and generate and distribute incomes among their brothers and sisters in their communities and neighborhoods. They set up a coffee plant nursery and a learning center in their backyard and established a farmer network of about 100 members from many districts. The youth group runs the network, starting by bringing in and growing coffee varieties from Chumphon, as well as coffee cultivars from Yala Horticulture Research Center. The group successfully developed a new cultivar in 2012 and has since distributed them to more than 50 interested members today, who are in their 30-50 years of age. The members who wish to receive the seedlings must agree to attend skills development training organized by the group. Young people in the group and member farmers will have to work in the plantations to train their skills, from watering the plants, plowing, to harvesting so that they can master coffee planting and harvesting skills. All of these activities – seedling cultivation, seeding distribution, establishing the coffee learning and career promotion center – arise from the past experiences and their observation that the government’s previous support (giving out seedlings) lacked sufficient monitoring and education provided to the farmers.
Once the farmers in the network have harvested their crops, the network will purchase them at a fixed minimum price so that farmers can rest assured that they will be able to sell their coffee. This is an incentive for farmers to grow more coffee. The network will process the coffee to make green beans and then sell them to a secondary market, the Bae-lee group, which buys tons of green beans a month. The group also sells green beans to Nestle’s purchasing center in Chumphon to be made as instant coffee.
Another large market that the group has not yet been able to tap and has become a challenge for the group’s entrepreneurship is the coffee shop market in Yala, the southern border provinces, and other parts of Thailand. The Robusta cultivar developed by Yala Horticulture Research Center has a unique identity ideal for making fresh coffee and comparable to Arabica based on the cup testing result: thick creamy foam, pleasant nutty aroma, citrus-like acidity, and brown sugar flavor. These characteristics are not found in Robusta from other sources. The youth group therefore believes that their home-grown produce and its local identity will be able to easily hit the coffee shop market. Some coffee shop operators in Yala, such as Cafe De Nibong, have experimented blending fresh beans from Yala coffee with premium Arabica from the north and marketing it under a local brand called “Yala Blend” at the price of 180 THB/200 grams. They also serve it in the shop. Cafe de Nibong is considered one of the centers of the coffee network in Yala because in addition to making local products, such as blended coffee for sale in beautiful modern packaging, the store also organizes training sessions to develop skills and enhance understanding of coffee, including the culture involved in the world of coffee, such as basic barista training, and a camper way curriculum (drip coffee, siphon coffee, moka pot coffee).
Another challenge of the Bannang Sata Youth Group is land ownership. The cultivation land owned by the local farmers varies between 5-50 rais (0.8-8 hectares). To make coffee cultivation a stable career and source of income and to upgrade the standard of living, one household needs to grow around 10 rais of coffee. What needs to be done is that the government must allocate land to farmers at a minimum of 10 rais per household. This approach must go hand-in-hand with coffee planting promotion or coffee seeds and seedlings distribution, as well as skill and knowledge building, not just in terms of agriculture but also the modern management skills.
The final challenge is to help the community enterprise survive Thailand’s fluctuating agricultural economy, prices, and the influence of the government policies that focuses on external context of the market rather than the strengths and characteristics of each locality. It is no wonder why farmers are perpetually subjected to a life in a vicious cycle every time they are told to grow a new crop, from coffee to rubber, and longkong to durian. Each of the aforementioned cash crops has an economic life expectancy of only about 10 years. Market conditions are easily changed as a result of the increasing number of producers and the volatility of prices in both the domestic and global markets. Today, the farmers in Yala are trying to find ways to use the land for sustainability rather than just for temporary incomes. A variety of approaches has emerged, such as growing short-term crops like cucumbers that “grow fast and sell fast” or considering growing coffee as intercrop to ensure a more stable year-round income instead of monocropping.
However, such a highly unsustainable agricultural economy has forced the farmers, the first joint of the coffee chain, to bear unnecessarily high costs. And middlemen can reap more benefits and shoulder less risk. The middlemen who buy agricultural products in Yala are usually outsiders from Chumphon and Surat Thani. They have quite a lot of power in setting prices. Therefore, the participants suggested that the local farmers who are the first joint of the agricultural production cycle need to form a community enterprise in order to set a standard price between the farmers and the middlemen and other operators to reduce the risk of unfair competition and price cutting.
Focus group discussion
The Banng Sata Youth Group. Bannang Sata Subdistrict, Bannang Sata District, Yala Province , February 20, 2021.
This story is the eighth of mini series on “Food Dialogue for Social Cohesion” written by Mr. Arthit Thongin as a part of the independent research under the Southern Thailand Social Innovation Platform initiated by UNDP
Disclaimer: “The views expressed in this publication are those of the author(s) and do not necessarily represent those of the United Nations, including UNDP, or the UN Member States.”