01 Dec 2020
During her recent research seminar, part of an ongoing series of faculty presentations at Sasin, Dr. Krittinee Nuttavuthisit admitted to having a soft spot for sustainable living models, and one of the remedies is that of organic farming. It is healthier, less damaging to the environment, and overall more socially beneficial than chemical farming. In addition, there is tremendous growth potential for an expanding organic produce market here and abroad. Organically grown fruits and vegetables are permitted no chemical additives, eliminating one major production cost. When harvested, they command a higher price—another advantage for small local farmers. And lacking chemical additives, the environmental impact of the organic farming cycle is also minimal. More, the market for organic produce is on the rise. Given these advantages, plus the observable Thai preference for fresh produce and groceries, some might think that the potential for organic foods in Thailand would be limitless. It was to explore this potential that Dr. Krittinee collaborated with a Danish colleague, Dr. John Thøgersen, to research. The fundamental obstacle, they soon found, was that of trust. Organic produce being a credence product, consumers desire a reliable method to assess quality. They want to be assured that it is a product of a trustworthy system. Barring that, consumers can only fall back on their innate confidence in the reliability of the farmers. At the same time, another study established that Thai consumers show little inclination to believe in domestic evaluation systems. Conversely, consumers seem ready to accept international ratings as inherently credible. Dr. Krittinee and her Ph.D. student, Supranee Tangnatthanakrit, refined their understanding of the trust issue using a five-tier trust measurement model which had numeric inputs for the degree of perceived control, competence, characteristics, communication, and community. The result pointed to the greatest factors of influence being the how Thai buyers felt about the farming community raising the produce. Fortuitously another research sponsor, the Thai Health Promotion Foundation, offered support for the study of organic tourism (yes, there is such a niche!) which is a significant driver of the organic food market. This was an opportunity to build trust between culinary staff and the growers of their raw ingredients. Building on this experience and later analysis commissioned by The Thailand Science Research and Innovation, Dr. Krittinee was able to divine the existing organic output production chain. According to the model, farmers most often send their products to market via middlemen. End consumers purchase from these grocers, wet markets, and restaurants. Often, this means an extended supply chain with an unpredictable, unregulated volume flow. Additionally, there is usually little direct exchange of information between those handling the produce each step of the supply chain. This can weaken confidence (trust) in product quality. A review of the literature revealed options for connecting stakeholders using a data-driven model on a digital platform. However, this might not suffice when (as in Thailand) there exists a huge number of small farmers operating independently. Pursuing an action research approach and tracking iterative plan-action-observation-reflection cycles consisting of surveys, interviews, observation, and workshops, Dr. Krittinee’s team discerned a new business model based on a digital construct. This model, known as the Thai Organic Platform (recently renamed to TOCA Platform), comprises three module classes. The first, for farmers, consists of applications to help them plan and budget as well as to coordinate sales. The second module, for business consumers, affords them information concerning product availability and volume pricing in addition to direct access to farmers. Finally, a third module links to end-users for direct sales, proof of origin, and guidance on peripheral activities such as organic food outlets, travel suggestions, and workshops encouraging organic cultivation. All three of these components are underpinned by a block chain-based common traceability and reporting platform. As the system matures, opportunities should arise for streamlining the supply chain which could lower the selling price of the end product and thus drive demand still higher. When it all comes together, the ideal result could even be a boost in consumer connectivity, confidence, and assertiveness within the organic movement. Beyond that, these sensitized consumers could become change agents on their own accord, looking for alternate paths not only to foster sustainable consumption and marketing, but also to completely unrelated efficiencies. Dr. Krittinee intends to track and record these market developments.
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