BAN PHAI, Khon Kaen Around this thriving district town, the
green Northeast is turning yellow and brown to the delight of everyone
in the area. At a factory warehouse complex at the edge of Ban
Phai, hundreds of workers nurse, stroke and generally tend millions of
leaves, thousands of bales and hundreds of racks of a special type of
tobacco that is in short supply and high demand these days.
In this
town of 36,000, the sort of jobs and income that much of Isan dreams
about is already here. Up to 40,000 farmers and their families in a
wide are around Ban Phai are reaping Oriental tobacco for export.
It's a growing agricultural industry. Isan farmers are urging their
friends and neighbours to get in on tobacco growing. Last season, this
business that has no conflict with rice-growing added an average 4,100
baht to the pockets of each farmer involved.
There is room for a
lot more players. After all of this year's crop was sold, exporters
got an emergency call from Taiwan for another 800 tons of Oriental
tobacco. "Sorry," the exporters were forced to say "but
try to get here early next year."
Isan is one of only two
major areas in the world that has succeeded in producing
commercial-quality Oriental tobacco crops. The other, traditional,
area centres on Greece, Turkey, Bulgaria and a tiny strip of southern
Russia.
A lot of people are happy with the growth of the Oriental
tobacco crops in Isan. A group of Bangkok bankers who help back the
project each spring recently toured the area for a day and said in
informal interviews they were delighted both with performance and
potential of the crop.
Executives of Adams International, which has
the government's blessing to buy, cure and export all Oriental tobacco
from the area, smile each time they look at the accounts books.
But
happiest of all are those most often ignored in Isan. Farmers here
grow tobacco, hump it to convenient buying stations around Isan and
receive cash on the barrelhead for the work.
In Ban Phai town, no
one has raised any objection to the huge cigarette advertising
billboard just alongside the district hospital. No Smoking signs are
not a big seller in Ban Phai.
Adams International is the sole
free-enterprise company involved in the Isan tobacco project. Farmers
aligned with the company receive help and advice all along the line,
since higher production of better-quality leaves are in everyone's
interests.
The Thai Tobacco Monopoly (TTM) also has its Oriental
buying offices and factory here. It buys for a growing domestic market
that uses Oriental tobacco in American-type cigarettes. The rapid
success of TTM's Krong Thip brand has felled local demand for Oriental
leaf.
By agreement with the Government, Adams buys and produces
tobacco only for export unless TTM has a shortfall. In practice over
the past couple of decad4es, this has seldom happened, and Adams has
exported about 98 per cent of what it buys from the farmers.
In
recent years, TTM has outproduced Adams, but this is subject to change
depending on total production in Isan. TTM's needs for Oriental are
growing, but so is overall production in the area.
Oriental tobacco
is about as far away as you can get from the better-known Virginia and
Burley leaves grown in northern Thailand. Nine grades of Oriental are
grown in Isan. Grades are decided by professional graders at the
buying sessions and cash is paid to the farmer immediately at the 15
buying stations.
Adams' Ban Phai facility alone has a 3,200 ton
storage capacity, and construction of a new godown is underway. In the
main warehouse, blending is performed on 1,000 bales at a time.
The
tobacco itself is a strange sight for anyone familiar with varieties
from the North. Here, the smaller the leaf the better, the opposite to
the Virginia and Burleys of the Chiang Mai area.
Oriental is used
by cigarette makers in blended brands to provide unique taste and
aroma. Blended tobaccos are slowly but surely capturing markets from
the traditional all-Virginia cigarettes associated with British
American Tobacco, and by far the largest growth rates are in Asian
countries.
Adams International director Wing Chung said the company
has targeted China and the East Asian nations of Korea, Japan and
Taiwan as the obvious places to increase its exports. At least in the
near future, he said, Isan farmers will find no problem selling all
the Oriental tobacco they can grow.
This year's crop, for example,
was sold out even before the farmers were able to pick their crop and
get it to the buying stations.
Company chairman Kosol
Chongsuknirandr, one of Thailand's most colourful trade veterans, said
in an interview that when Adams International first decided to give
Oriental tobacco a try in the Northeast, many scoffed.
The American
Philip Morris tobacco company required only the shortest time
imaginable to make up their minds to help finance tobacco growing in
the North, he recalled. "But when we mentioned growing Oriental
tobacco in the Northeast, they just threw up their hands and said
no," he recalled.
The opportunity to go it alone in 1974 was
not one that Adams International relished, but it has proved to be
perhaps the most successful gamble ever by Mr. Kosol.
"We knew
there was potential for it," he said. "I remember a Bangkok
Post story in 1965 that said that Oriental tobacco could prove to be
the salvation of the Northeast. That was a pretty good prediction,
considering it was 25 years ago."
Quite a prediction indeed.
In 1975, the company exported just under 600 tons of Oriental worth
16.6 million baht. Last year, exports were a shade under 3,000 tons
worth 121.6 million baht.
Last season, some 26,000 rai were under
Oriental tobacco cultivation. "One of the beautiful things about
Oriental," said Adams director B.T Blackwell, "is that there
is absolutely no conflict with rice. The growing seasons are opposite
for tobacco and rice."
This means that rice farmers can reap a
second crop even though a second rice crop in most of Isan is
unthinkable. The hot, dusty season here is custom-made for tobacco,
which happens to love that sandy, acid soil that sends educated
agriculturists in central Thailand into spasms of weeping over
"poor Isan"
We tried hiring some of the Bangkok-educated
agronomists for a while," said an Adams executive. "But it
turned out they didn't want to get their hands dirty and were really
out of place up here in Isan."
Adams hired and trained local
people for all of its senior positions in the tobacco and other
agriculture fields and has never regretted the move. "These
people may be in more demand to go abroad and share our technology
than any other group of agricultural experts in Thailand," an
Adams International executive said.
Among countries in the area
that would like to share in Isan's secrets are the Philippines, China
and India. These nations have been trying to emulate the Northeast's
success with Oriental for decades, but so far fruitlessly.
Wing
Chung claims the multi-partnership system has yielded success in this
area. His company, the banks, Thai government officials and the
farmers all make out good profits a result.
For his company,
Oriental tobacco is only part of the iceberg of potential that Isan
holds, he and other executives believe. Adams International shipped
seven tons of hybrid tomato seeds abroad last year, as part of a
multi-part development plan that is quickly growing.
People of the
world are already eating and using luceana, sunflower, sesame, maize
and hybrid sorghum, all part of one company's development. The success
of the tomato experiments has been phenomenal, with exports growing
from zero in 1979 to 7,000 kg just a decade later.
