Thailand proposes tripartite model to address school-milk procurement crisis

Tripartite approach targets procurement dispute

Thailand’s National Farmers Council has put forward a tripartite model aimed at resolving the crisis surrounding the country’s school-milk program. The proposal would bring producers, dairy cooperatives and the state into a common framework, with former official Amnuay Patise involved in examining the problems affecting the market.

The initiative focuses in particular on memoranda of understanding used in the school-milk system. The available source material describes these agreements as a central obstacle that must be unlocked, although it does not specify the disputed clauses, participating organizations or volume of milk affected. Any reform will therefore depend on how responsibilities and commercial terms are divided among farmers, processors, cooperatives and public buyers.

Sugar-sector model considered for dairy

The proposed framework draws on Thailand’s sugarcane and sugar model. Applying elements of that system to dairy would create a more coordinated relationship among primary producers, collective organizations and the state. The source does not provide a detailed formula for revenue sharing or milk-price calculation, but it identifies closing pricing gaps as one of the main objectives.

Pricing is critical for the school-milk market because procurement rules connect public purchasing decisions with the income received by dairy farmers and cooperatives. If purchase prices, processing costs and payments to farmers are governed by different rules, pressure can accumulate at several points in the supply chain. A tripartite mechanism could provide a forum for settling those differences, but its effect will depend on enforceable rules rather than voluntary coordination alone.

Two dairy laws form part of the proposal

The plan also calls for combining the tripartite framework with two pieces of dairy-cattle legislation. The source material does not name the bills or describe their individual provisions. It nevertheless presents legal reform as necessary to close gaps in pricing and give the proposed system a firmer institutional basis.

For producers and processors, the decisive questions will be whether the laws establish transparent price-setting procedures, define procurement obligations and clarify the role of cooperatives. Public buyers will also need rules that preserve continuity in the school-milk program while ensuring that milk can be purchased and distributed under workable commercial conditions.

Cooperatives may gain access to broader financing

Another element is a proposed connection between dairy cooperatives, the state dairy organization known by the Thai abbreviation อ.ส.ค., and capital markets. The source gives no details about the financing instruments under consideration. The stated direction, however, indicates an effort to expand the financial options available to organizations that collect, process or market farmers’ milk.

The proposal remains a framework rather than a completed settlement. No implementation date, procurement volume, milk price or budget has been disclosed in the supplied material. Market participants will therefore be watching for the text of the two dairy laws, a concrete pricing mechanism and revised rules for school-milk agreements. Those details will determine whether the tripartite model can stabilize procurement and provide durable support for Thailand’s dairy farmers.