Thai Durian Trade Groups Push Back on Proposed Export Cess

On Sept. 7, Thailand held its latest public hearing on the draft Durian Act. The bill has been under discussion for over two years, with farmers, traders and exporters all raising their own proposals and objections, centered mainly on the plan to establish a fund and levy a cess on exported durians. The draft Durian Act runs to roughly 8–9 chapters and more than 50 articles, covering durian industry management, quality control and measures for handling violations.

Among these issues, stakeholders at the hearing were especially concerned about the picking and selling of immature durians, which could damage the quality and reputation of Thai durians in overseas markets. Kritidet Uyarot, president of the Thai Durian Association, said that enforcement officers need to be granted stronger powers to inspect and act on violations, claiming that the penalties in the initial draft are not robust enough to solve the problem.

The proposal to set up a durian fund and levy a cess of up to 2 Thai baht ($0.06) per kilogram on exported durians — up from an earlier proposal of 0.50–1 baht ($0.015–0.030) per kilogram — has been opposed by both the Thai Durian Association and the Thai Fruit Traders and Exporters Association. A standard durian export container holds around 18,000 kilograms, so even a 1 baht ($0.03) per kilogram cess would add roughly 18,000 baht ($540) per container. Both associations are concerned that the added costs might ultimately be passed down to farmers through lower purchase prices. They argue that the act should focus on raising quality, solving structural problems and strengthening competitiveness, not increasing costs for farmers and businesses.

Sanchai Puranachaikiri, honorary president of the Thai Fruit Traders and Exporters Association, said that the bill needs to be reconsidered if it continues to prioritize fee collection and fund-building over the industry’s structural problems. As a fresh fruit with a limited shelf life, durians cannot be stored for prolonged periods in the same manner as some other agricultural products, so the fee models used for rubber or rice simply cannot be applied wholesale, critics have said.

The Thai Durian Association has proposed directing most of a dedicated fund’s money back into industry development — about 20% for research and development and market expansion, 30–40% for assisting those hit by natural disasters, and the rest for export support, promotion, marketing and research into future challenges. The association has suggested capping fund administration costs at 5% (down from an original proposal of up to 20%) and using existing facilities at local government offices rather than building new ones, leaving more of the fund available for industry development.

Image: Unsplash

This article was based on a Chinese article. Read the original article.