An economic nesting ground


Thailand is famous around the world for its much-prized bird’s nest. But businesses believe lack of legislative support is short-changing the country’s immense potential

As we approach Koh Si and Koh Ha – the so-called Koh Rang Nok (Bird’s Nest Island) in Songkhla Lake – our boat runs past two floating security booths that serve as checkpoints before we are allowed to disembark on the islands.
Located in the Pak Phayun district of Phatthalung province, the seven islands spread over 1,400 rai (224 hectares) are home to flocks of swiftlets whose nests are made of solidified saliva – the key ingredient in making bird’s-nest soup.
The edible bird’s nest collected from Phatthalung is renowned for being the finest quality in Thailand due to the large size of the islands and their location in the middle of Songkhla Lake where there is a plenty of food, making the nests white and clean.
In Thailand, the state grants concessions in nine provinces to private companies to collect nests for trade.
Koh Si and Koh Ha come under the concession areas so permission must first be obtained before visiting the islands. Only workers of the companies involved in the trade are allowed to stay on the islands.
An economic nesting ground

Traces of bird’s nest are left on a wall in Tewada Cave.

Birds’ nests are harvested three times a year – in February, April and July-August. Normally, the islands are not open to tourists during the harvest season because they could disturb nest-making, and also due to the sensitivity of the area, which needs strict environmental control.
Our boat stopped at Tewada (Angel) Island, a part of Koh Rang Nok.
It boasts  a monument to King Chulalongkorn (Rama V), who once visited the island and left his royal initials on a cliffside.
Behind the monument, in front of Tewada Cave, is the Tewada Shrine, where nest collectors pay their respects to the cave’s sacred spirits and to the spirit of edible birds’ nest before going inside. They believe these dutiful obeisances will protect them while they’re gathering their nests.
“The job is risky. They have to climb the rock, scale the cliffs and even dive [when the water level rises],” explains Kimhan Suwanruengsri, a local community guide on the island.
Bird’s nest has important economic value for the country, especially for seaside provinces like Phatthalung.
The province earned Bt450 million in the latest five-year concession auction for nests harvested from the caves, according to Pak Phayun’s Koh Mak subdistrict administrative organisation. However, the amount was slightly lower than the Bt100 million a year achieved in previous auctions.
Also a cause for concern is the decline in the amount of edible nest scollected in Koh Mak. Last year  3.46 tonnes of nests were gathered, dropping from 3.6 tonnes the previous year.

An economic nesting ground

A swiftlet builds a nest in a farm building in Pak Phanang.

Bird’s-nest business
The volume of trade in Southeast Asia in the edible bird’s-nest business is huge, with an average of around Bt100 billion generated from the 2,800 tonnes produced per year, said Kasem Jandam, a researcher on a transnational research project titled “Ethnicity and Birds’ Nest Resources in Southeast Asia”.
An economic nesting ground

Kasem Jandam

Supported by the Thailand Research Fund, his research looked  at models for managing bird’s-nest resources in Thailand, Vietnam, the Philippines, Indonesia, Malaysia and Hong Kong, each one a centre of the world edible bird’s-nest market. 
The research was conducted from 2009-2011 and published last year in the book “Birds’ Nests, Business and Ethnicity in Southeast Asia”.
China is the world’s largest consumer of birds’ nests, accounting for more than 90 per cent of the market, Kasem said.
Chinese businessmen are major buyers of edible nests to resell both inside and outside the country. China, Hong Kong and Taiwan are the most important edible bird’s-nest markets, Kasem added.
Hong Kong is the biggest market for edible nests in the world, with trade valued at around HK$2 billion (Bt8.4 billion) per year.
In Thailand, trade value is estimated at around Bt10 billion per year, generated by 400 tonnes of output of edible nests  collected from both natural sources such as caves and nest farms situated inside buildings, known as “bird houses”, Kasem said.
According to his research, Indonesia is the biggest producer in Southeast Asia, exporting around 2,000 tonnes per year, followed by Malaysia with 600 tonnes and Thailand at No 3. The Philippines, with around 5 tonnes per year, is the smallest producer.
The research also found that ethnic groups in Southeast Asia “collected and used” edible bird’s nest from natural sources to make food and herbs  and, more than 500 years ago, “collected and traded” it with ethnic groups in China.
People believe eating bird’s nest will increase their longevity and sexual capacity, improve their immunity and health and cure various ailments, Kasem found.
The farming of edible nests by raising swiftlets in buildings began in the village of Sedaya on Indonesia’s Java island in 1880 and then spread across the region, he learned. Such buildings became known as “bird’s nest condos” amid a burst of production following the 1997 economic crisis.
An economic nesting ground

A worker cleans moistened nests.

Previously in Southeast Asia, 75 per cent of bird’s nest came from caves and 25 per cent from buildings. But that trend has since reversed, with nests harvested in caves reduced to only one-third and nests from buildings increasing to 70 per cent, Kasem said. But in Thailand, the number of nests coming from caves is still much larger – 300 tonnes – than from buildings – 100 tonnes. However, the number of nesting buildings in Thailand has been increasing thanks to better care and protection by the owners, Kasem said.
Moreover, nests can be collected from buildings more frequently than from caves, where it only takes place once a month.

An economic nesting ground

A “bird’s-nest condo” rises above Pak Phanang. 

Calls to legalise bird’s nest “condo”
The skyrocketing price of edible bird’s nest since 1980 has led to “over-harvesting” and caused a drastic decline in the overall quantity of nests in Southeast Asia. In contrast, the birdhouse industry has boomed, with more than 10,000 buildings being built across 43 Thai provinces in Thailand.
While demand for the precious food has increased and the price is gradually going up, supplies from caves have concurrently gone down.
So, birdhouse entrepreneurs, whose business is currently “grey” and “underground”, have called on the government to legalise the farming activity. They claim their business will benefit the country’s economy.
The debate over using artificial birdhouses, currently illegal, has gone on for over a decade. Although Thailand has a law on bird’s-nest taxation, it does not cover nests from houses for trade.
Thai businessmen are not able to export the house nests to China because their business needs to be registered and the nests certified. Southeast Asia’s bird’s-nest exporters have faced tougher regulations and conditions since China in July 2011 banned the import of raw edible 
bird’s-nest after finding some had been tampered with and were fake.
In urban areas, bird’s-nest condos are considered problematic for neighbours due to the avian faeces and the loud chirping. When people file complaints with the authorities, most businessmen opt to pay a fine under the Building Control Act or Public Health Act. 
Despite being illegal, the business continues to prosper in some seaside provinces in the South, such as in Nakhon Si Thammarat’s Pak Phanang district, where bird’s-nest condo blocks dominate the skyline. 
Most collectors have found ways to smuggle the nests into China, a representative of a bird’s-nest company told The Nation.
“We transport them in small amounts of half a kilo each time through logistic companies – who know it violates the laws. I know it’s risky, but we don’t have any other way [to export to China],” she said.
They also avoid China’s regulations by exporting to Vietnam and Hong Kong, from where it is moved on to China, another source familiar with matter said. The information was confirmed by Kasem, who said only 10 per cent of the nests are imported into China legally, while the rest are smuggled in.
“We are living in the dark age of the bird’s-nest trade in Thailand. Our trade ranking dropped to third place after being toppled by Malaysia [in second place],” said Kamolsak Lertpaiboon, the owner of Kuuanmui, a bird’s-nest company that owns a seven-storey avian accommodation in Pak Phanang.
An economic nesting ground

Tewada (Angel) Island in Phatthalung province

In Pak Phanang alone there are more than 500 farm buildings and each can generate income of around Bt50 million per year. But only 20 per cent of them are successful, according to Kamolsak.
He urged the government to review the laws that obstruct expansion of the business and to promote the nest-farming buildings. 
He also called for the removal of swiftlets from the list of preserved animals in the Wildlife Preservation and Protection Act. It should be viewed as a livestock animal, he said.
“Birds do not use nests as 
their sleeping places but rather to lay their eggs. And the nest can be rebuilt [after being harvested],” Kamolsak argued, amid concerns from opponents about nest-farming houses.
Anan Chongsakjarenkul, president of the Association of Bird’s Nest Entrepreneurs in Thailand, said that if nest houses were legalised, he was sure production would increase by at least 15 tonnes per month and be sufficient for export.
The price would go up, too, by at least 50 per cent, said Anan, who founded Anan Thai Birdnest Co in Hat Yai 25 years ago.
Currently the export price of a farmed nest is around Bt80,000 per kilo. Exported to China, the price doubles, selling for up to Bt160,000 per kilo.
If the law certifies nest-farm buildings, the price in Thailand could go up to Bt180,000.
The price of bird’s nest from caves is higher, at Bt120,000 per kilo, and when exported to China it can reach Bt1 million. But the number of cave nests is declining, Anan said.
“If it is legalised, we do not need to engage in ‘grey’ business,” he said.
Pichamon Akarayosapong of Paus One Co in Hat Yai, whose family has run a farmed bird’s nest business for 10 years, said they saw opportunity in the business so they decided to hire a consultant from Malaysia.
The business gave a good yield. Initial investment was between Bt2 million and Bt3 million and they recovered their investment quite quickly, mainly because that family started earlier than the others. 
This is because the number of birds in the area is still quite high and her business has been driven by high demand from Chinese travellers who visit her house to buy the nests.
Her firm collects 15 to 20 kilos per month and exports 5 to 10 kilos to China.
“Doing this business is like one of your legs is already in jail. Nobody wants to go underground [smuggle the nests to China] because you risk being jailed or fined,” she said.
Pichamon urged authorities to make policies and related laws clear. Otherwise Thais will lose business opportunities.
“We [businesspeople] are willing to pay the tax when it’s legalised,” she added. 
Kasem supported the businessmen’s call.
“What makes me feel sad is when they [businessmen] ask me why the government is dealing with them as if they were drug dealers, even though their businesses benefit the country,” he said.