Major Thai coffee brand vows to repay 200 debt-ridden farmers

[webfact]

Major Thai coffee brand vows to repay 200 debt-ridden farmers

By Nanchanok Wongsamuth

 

A coffee grower collects coffee beans at her plantation in Chiang Rai, Thailand, December, 25 2019. Thomson Reuters Foundation/Nanchanok Wongsamuth

 

CHIANG RAI, Thailand (Thomson Reuters Foundation) - A major Thai coffee brand has vowed to repay about 200 farmers who were forced to take out loans while waiting nearly three years for payment, leaving them with spiralling debts.

 

Doi Chaang Coffee - which has more than 50 franchises in Southeast Asia - said it would pay about 7 million baht ($224,000) after the Thomson Reuters Foundation revealed the non-payment and ensuing debts.

 

Doi Chaang calls itself a social enterprise, a company that addresses environmental and social issues while making a profit, and was founded in 2003 seeking to give growers a fairer price.

 

"By June we should be able to pay back all of the money that we owe to the coffee growers," said Panachai Pisailert, managing director of Doi Chaang Coffee Original Co.

 

"The past two to three years the economy has been bad, and that has affected Doi Chaang's coffee sales," he added, saying the company used to pay its suppliers within four days.

 

The Thomson Reuters Foundation spoke to 20 farmers in three villages in northern Chiang Rai, who said Doi Chaang had owed them payments ranging from 2,000 to 230,000 baht since 2017.

 

The growers said they were worried about being unable to pay back high-interest loans from informal lenders, as well as those from state-owned banks and money borrowed from village funds.

 

One farmer said Doi Chaang's failure to pay him 50,000 baht had led him to take out loans from a rural development bank and a village cooperative to pay for fertiliser and pesticides to preserve his crops. He now owes about 300,000 baht in total.

 

"I will probably be in a never-ending cycle of debt to the bank," he said on condition of anonymity for fear of reprisals.

 

FEARS FOR FUTURE

Labour rights experts said such debts put people at risk of falling prey to the world's most common form of modern slavery, debt bondage, where people are locked into exploitative work to repay debts.

 

"The coffee growers, who have little capital, will be susceptible to cash-flow problems and eventually be driven deeper into debt," said Betty Yolanda, Asia manager at the Business and Human Rights Resource Centre, a monitoring group.

 

"This situation can be used by other buyers to exercise control over the coffee growers through debt bondage, forcing them into a cycle of debt and exploitation," she added.

 

Somboon Trisilanun, the labour ministry's inspector general, said the agriculture industry was tougher to monitor than other, more industrialised sectors due to the large number of workers.

 

"It's not possible for authorities to inspect all field crops, but they (workers) are protected under the labour law and there are key indicators (of exploitation)," he said.

 

Doi Chaang said it conducted business "like a family" and did not have written contracts with its suppliers.

 

"This kind of practice is rather unusual ... and makes the farmers vulnerable to being exploited," said Viroj NaRanong, research director at the Thailand Development Research Institute, a policy think tank.

 

Coffee is the main source of income for most of the hill tribes living in Chiang Rai, who grew opium poppies before shifting to food crops and coffee beans in the 1960s.

 

One local chief said Doi Chaang owed about 3 million baht to about 30 residents of his village for their coffee beans, and many farmers were worried that they would never be repaid.

 

"The company says they help raise the living standards of locals ... but in reality (the villagers) are struggling," said the chief, who asked not to be named for fear of retribution.

 

(Reporting by Nanchanok Wongsamuth @nanchanokw; Editing by Kieran Guilbert and Belinda Goldsmith. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking, property rights, and climate change. Visit http://news.trust.org)

 

-- © Copyright Reuters 2020-02-17

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[GarryP]

The owners of Doi Chaang Coffee should be ashamed of themselves. They should also pay interest on all outstanding payments.  

[CNXexpat]

The company grows and grows and needs money for the investments but don´t pay their suppliers. Unfair for the farmers. The company should also pay the interest.

[steven100]

1 hour ago, webfact said:

Doi Chaang said it conducted business "like a family" and did not have written contracts with its suppliers.

so I don't have to pay you and we don't have any agreement so suing me is out of the question .....

but hey .... ' your family '  that's the thai way ... 

[Rotweiler]

Some of you may not be aware that the primary owners of Doi Chaang Coffee are a group of Canadian investors who found a loophole in Thai patent law and registered (world-wide, with SENIOR rights) the coffee grown in Doi Chang in Northern Chiang Rai Province, Thailand.  They effectively killed a local coop business called Doi Chang Coffee which used to provide a living wage to local coffee farmers. 

 

Now Doi Chaang primaries will say this is only business, but..........  the absentee owners have been sucking cash from the business for years without regard to the debts the company owns. 

 

Your response?  F... Doi Chaang Coffee - buy elsewhere!

[LomSak27]

1 hour ago, Rotweiler said:

Some of you may not be aware that the primary owners of Doi Chaang Coffee are a group of Canadian investors who found a loophole in Thai patent law and registered (world-wide, with SENIOR rights) the coffee grown in Doi Chang in Northern Chiang Rai Province, Thailand.  They effectively killed a local coop business called Doi Chang Coffee which used to provide a living wage to local coffee farmers. 

 

Now Doi Chaang primaries will say this is only business, but..........  the absentee owners have been sucking cash from the business for years without regard to the debts the company owns. 

 

Your response?  F... Doi Chaang Coffee - buy elsewhere!

So this guy is Canadian ???
 

Phitsanuchai Kaewphichai, the company's co-founder and business adviser, said the company recently completed its rebranding by transitioning Doi Chaang Coffee to a new brand identity with a fresh and modern look both in terms of logo and packaging. 

Apart from the domestic market, the company also has about 50 Doi Chaang coffee shops via the franchise scheme in Canada, Britain, South Korea, Singapore, Malaysia, Laos, Cambodia and Myanmar.

 

 

 

 

[Rotweiler]

Take a peek at http://www.doichaangcoffee.com/

[sceadugenga]

13 hours ago, Rotweiler said:

Some of you may not be aware that the primary owners of Doi Chaang Coffee are a group of Canadian investors who found a loophole in Thai patent law and registered (world-wide, with SENIOR rights) the coffee grown in Doi Chang in Northern Chiang Rai Province, Thailand.  They effectively killed a local coop business called Doi Chang Coffee which used to provide a living wage to local coffee farmers. 

 

Now Doi Chaang primaries will say this is only business, but..........  the absentee owners have been sucking cash from the business for years without regard to the debts the company owns. 

 

Your response?  F... Doi Chaang Coffee - buy elsewhere!

Doesn't Singha Corporation have a finger in the pie somewhere?

 

[loong]

15 hours ago, webfact said:

One farmer said Doi Chaang's failure to pay him 50,000 baht had led him to take out loans from a rural development bank and a village cooperative to pay for fertiliser and pesticides to preserve his crops. He now owes about 300,000 baht in total.

I just don't see how the failure to pay him 50K resulted in him being 300K in debt.

[LomSak27]

9 hours ago, Rotweiler said:

Take a peek at http://www.doichaangcoffee.com/

so Phitsanuchai Kaewphichai, the company's co-founder and business adviser

 

has nothing to do with the coffee anymore??

[rtco]

10 hours ago, Rotweiler said:

Take a peek at http://www.doichaangcoffee.com/

I did and look at these ... I've underlined the important ones:

 

Core Goals

• Eliminate Cycle of Poverty
• Promote Education and Health Care
• Encourage Cultural Identity & Pride
• Ensure Equality
• Achieve Economic Sustainability
• Achieve Economic Prosperity

Core Values

• Seek Premium Quality
• Ensure Quality Control
• Sustainable Control
• Invest in Community Sustainably
• Always be Transparent
• Always be Accountable

[Emdog]

Seems they trumpet selves as "Beyond fair trade" & not paying suppliers probably qualifies as a sort of "beyond".... as in "beyond belief"

Co-founder and adviser could easily mean "He's just a figure head"

[hotchilli]

17 hours ago, webfact said:

Doi Chaang calls itself a social enterprise, a company that addresses environmental and social issues while making a profit, and was founded in 2003 seeking to give growers a fairer price

Lol

[Expat Brad]

Mean while the CEO and the companies other heads are driving around in Mercedes Benz and living in luxury!!!

They should be made to pay not just money owed to their farmers but, also the debts incurred!!!

[seabear]

You better buy the coffee directly from the farmer. I just did.

[Assurancetourix]

3 hours ago, LomSak27 said:

so Phitsanuchai Kaewphichai, the company's co-founder and business adviser

 

has nothing to do with the coffee anymore??

Perhaps he is Canadian, which can be confusing.
In any case, this company does not really seem to collapse under debts, see article in reference.

( not possible, sorry , it's on the Thai newspaper which does not have the right to be quoted here on TV ;

but a quick Google search will provide it )

On the other hand, I will never understand farmers from all countries;
if your buyer does not pay you, you do not provide him with the merchandise which he will claim the next time; it's still very simple!
Especially in the case that interests us since no written contract exists.

" We are a big family " .. a socialist family   ; I keep the gains, but I pool the losses .. 

 

 

[Tchooptip]

1 hour ago, seabear said:

You better buy the coffee directly from the farmer. I just did.

In Koh Samui not very easy????

I reckon I buy Doi Chang on Lazada as my only brand after trying two three other brands on Lazada too.

One kilo,4 packets of 250 grams 564 Bahts.

[KKr]

heard somewhere on a trade show that their coffee is sourced from neighbouring countries as well, maybe since the sales are growing faster than the local production or, possibly, foreign sourced could be cheaper.
Sounds like the local Farmers should have kept their act together, not give in to a production company, but have founded a proper cooperative instead.
Would have thought there are advisors in the local government offices of the Ministry of Agriculture Extension that teach people how to get organised, create bargaining power, and how to source financing for machinery etcetera.

What I read between the lines is that the Company either:
(1) chooses not to borrow 225.000 USD from the bank to pay the farmers and saves the interest to boost earnings,
or
(2) if the Banks do not want to lend to them, maybe simply (at least locally) is not good for the money.

[KKr]

4 hours ago, Assurancetourix said:

Perhaps he is Canadian, which can be confusing.
In any case, this company does not really seem to collapse under debts, see article in reference.

( not possible, sorry , it's on the Thai newspaper which does not have the right to be quoted here on TV ;

but a quick Google search will provide it )

On the other hand, I will never understand farmers from all countries;
if your buyer does not pay you, you do not provide him with the merchandise which he will claim the next time; it's still very simple!
Especially in the case that interests us since no written contract exists.

" We are a big family " .. a socialist family   ; I keep the gains, but I pool the losses .. 

Problem seems to be that these Farmers do not have a network to sell their produce, nor a cooperative that represents them and creates good transactions for them.
One Buyer, in an area is good as long as the buyer is a Fair entity.
But as soon as people get say 40-50 cents or less to the dollar because they do not have anyone else to offer their produce to, then problems are bound to come up as soon as the buyer gets greedy.
 

 

On 2/17/2020 at 3:28 PM, webfact said:

"The past two to three years the economy has been bad, and that has affected Doi Chaang's coffee sales,"

in which markets? USA and Canada seem to be doing well, and the number of new Franchise shops opening suggest that the local market is not slow either.

 

[FarFlungFalang]

22 hours ago, steven100 said:

so I don't have to pay you and we don't have any agreement so suing me is out of the question .....

but hey .... ' your family '  that's the thai way ... 

It's how the whole country is run!   

[talisman01]

There is a lot more here in this old interview....

 

https://drwakefield.com/news-and-views/how-the-men-behind-doi-chaang-became-coffee-suppliers-extraordinary/

[LomSak27]

Do not get me wrong, I’m well acquainted with the evil that is Canada is; Justin Bieber, Seth Rogen, Nickelback, killing baby Harp seals on the ice with big clubs. It sickens me.
 

That said, I am supposed to believe that John Darch is somehow more than the usual 49 percent owner, (albeit controls a lot of the out of Thailand franchises) and the 51 per cent, THAILAND OWNERSHIP is not running day to day business in Thailand?! Really! Nothing posted on this thread persuades me that this is the case.
 

BTW, I have watched Ice Road Truckers & Trailer Park Boys, so I am well aware of the unscrupulous, dodgy, sleight of hand M.O., these denizens of the far north employ. So not easily gulled.