Agricultural Business Model and Sustainable Development in Highland: A Case of Nan, Thailand

Over the past decade, forestsin the Northern Thailand have reducedrapidly. Farmers’ well-being and highland environment have also suffered vastly, owing to an expansion of maize farming. To induce farmers to adopt a more environmental friendly alternative, it is essential that policy makers must understand potential business models that could lend good support to highland agricultural system and bring forth sustainability. This paper studies constraints and advantages of existing highland business models in Nan. We consider impacts of engaging in various business models on farmers’ livelihood and environments. Data were gathered from 146 household-surveys in 7 areas of Nan and in-depth interviews with local stakeholders, government and development agencies. We show that different agricultural systems and business models fare different impacts on economic, social and environment. Contact farming reduces price uncertainty for farmers, but creates significant negative impacts on social and environment. Farmers’ aggregation help strengthen farmers’ capacity and open up market opportunity, but it does not guarantee a lift in bargaining power. Cultivating highquality product may add value to final product and benefit environment, yet farmers need to be linked to high-end market and pass quality guarantee system. Product processing helps diversifying market risk, but whether or not the value added will be returned to farmers is questionable. Developing business model for an area depends on several factors including readiness of community and requirements of each model. We assert the “four essential principles” that need to be embedded and nurtured in upland agricultural business. These are: 1) give high returns per unit area 2) reduce risk 3) strengthen farmers and community and 4) set explicit conditions to improve environment. We offer various means that business and farmers may choose to adopt so as to deliver results according to each principle.