Mr.Dhanin informed top national economic strategists of Thailand that they had to raise public servant salaries to match those of corporate employees in order to attract and recruit exceptional graduates to the public sector. He also urged the government to restrain itself from stalling the increase of domestic commodity prices and let market mechanisms take its natural course.

 

“If we want Thailand to prosper, we must start by aligning government official salaries with that of rising product prices. Product prices at the farm level should also increase in accordance with market mechanisms around the world as well, Dhanin said in a speech titled “Thailand’s Economic Directions” at the Office of the National Economic and Social Development Board.

 

“The country as a whole, including the CP Group’s enterprises, has prospered to this very present due to the dedication of the public servants in the past. But I am worried that the current low salary range will discourage bright and productive graduates from entering the government sector,” Mr. Dhanin told senior policy makers at the NESDB.

 

“We can’t control the oil prices, so why do we have to fix domestic produce prices? We must allow prices of agricultural products to rise and therefore raise overall salaries of public sector officials accordingly,” said the head of the country’s biggest agro-industry conglomerate.

 

He said if commodity prices were allowed to rise, farmers would have more money to spend, which would benefit everyone in the economy.

 

Mr. Dhanin, the world’s richest people by Forbes magazine this year, said it was the time that Thailand -- the world’s laregest exporter of rice, rubber and shrimp -- transform its traditional small-scale, low-yield farming practices into a vertically integrated production with considerable capital and modern technology, an approach CP took the lead some 30 years ago and has become successful now.

 

“About 90 percent of broiler farmers in Thailand are free of production risks as the risks have been passed on to contract companies,” Mr. Dhanin said referring to farmers whom are under contract, whereby an organization such as CP, will supply them with everything from breeding stocks to feed and slaughter houses.

 

Mr. Dhanin stated that hen, pig and shrimp farmers were still vulnerable to production risks and financial losses as most of them were not under the contract farming system.

 

Mr. Dhanin said Thailand could improve its productivity on three main cash crops – rice, rubber and palm – as their prices are on the upward outlook, thanks to China’s soaring demand for food and rubber and the rising global demand for biofuel.

 

Thailand, the world’s biggest rice exporter, should approach three major rice-producing countries, namely China, Vietnam and India, to form an OPEC-like alliance on rice to elevate its price, he said.

 

“Today Vietnam has halted their export of rice for fear of domestic shortage. China alone doesn’t have excess rice for export, while India may have some rice surplus for exports in the coming years. So why don’t we join hands with those three countries to improve prices?” said Mr. Dhanin, also an adviser to the Shanghai city government.

 

 

Mr. Dhanin proposed a revolutionary agricultural model for Thailand that offers the opportunity to multiply the agricultural industry’s income by 2.5 times (or rise from 8 billion baht to 2.1 trillion baht). The proposed agricultural model will have to properly allocate farm land effectively, manage irrigation systems efficiently, and utilize the best biotechnological plant breeds and equipment. In addition, Mr. Dhanin recommended the need for farmers to increase the growth of certain crops such as rice, rubber, palm sugar and corn because they offer the best returns due to continual world market demands.

 

 

As crops for ethanol are in greater demand worldwide, Thailand should grow more corn and tapioca, both of which can be used as animal feed as well as raw material for ethanol production, Mr. Dhanin said.

 

“Corn is like oil for the agricultural industry. They both serve as a fuel but with corn you don’t need to search for it underground (with environmentally damaging results), it is right here on the surface and renewable as well.” he said in reference to the fossil fuel.

 

Ethanol, which can also be made from sugarcane, is used to blend with gasoline to produce biofuel called “Gasohol” in Thailand.

 

“Experts estimate underground oil will certainly vanish in 100 years, but we will never run out of surface oils. They are renewable and refillable,” said Mr Dhanin, a guest lecturer at Harvard Business School in 2004 on the Food Policy and Agribusiness course.

 

Mr. Dhanin said countries with unlimited supply of renewable oil like Brazil, the world’s most efficient ethanol producer and the world’s largest exporter of ethanol, could emerge as a key engine of global growth if it teamed up well with Argentina.

 

“Eventually, the countries with oil wells will not be able to compete with those with surface oils,” said Mr. Dhanin, 69.

 

As the United States was no longer the sole key engine of growth for the global economy, Mr. Dhanin said Thailand needed to strengthen trade ties with the Brazil/Argentina bloc and three other soon-to-be economic powerhouses -- an integrated market of Eastern and Western Europe, China and an alliance among Japan, India and 10 Southeast Asian nations.

 

“From now on, Thailand must have a well-planned strategy on trade with India and China. What are our strengths and weaknesses? What should be traded amongst ASEAN nations as well as Russia and the Eastern Europe? They all provide great opportunities,” he said.

 

Mr. Dhanin, born in Thailand with a Chinese migrant family, also urged the government to come up with an incentive package to lure 100,000 productive and efficient expatriates to work and live Thailand, offering them a low personal income tax of 10 percent and giving them Thai citizenship.

 

“Thailand is a charming country for many foreigners. Whoever has a chance to stay here for a couple of years would eventually love to settle down here,” he said.

 “If the government can come up with the right package, expatriates would be able to properly settle down and help drive the country forward. Competition is not always about money, it is whether the people are competent.”

 

Office of the Corporate Communications Affairs, CP Group