Thai govt addresses agricultural sector climate risk


The government has approved the draft of a financial instrument exchange programme aimed at adapting to climate change risks, particularly in the agricultural sector in the Asean region, as part of the moves towards environmental sustainability.

Resolutions related to environmental cooperation and adaptation to climate change, particularly in the agricultural sector, were approved at the Cabinet meeting on June 6 along with the exchange of a draft agreement concerning the implementation of the Innovative Climate Risk Financing for the Agricultural Sector in the Asean Region (ICRFAAR) project. The cabinet also authorised the Secretary-General of Asean to sign the exchange agreement, in accordance with the proposal put forward by the Ministry of Agriculture and Cooperatives.

Enhance cooperation on a global stage

The Innovative Climate Risk Financing for the Agricultural Sector in the Asean Region is a collaborative project between the Federal Republic of Germany and Asean supported by the German Federal Ministry for Economic Cooperation and Development (BMZ).

The project is being implemented by Germany’s main development agency, Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), in collaboration with the Asean Secretariat through the Food, Agriculture, and Forest Division (FAFD) and is under the supervision of the Asean Crop Team.

Activities are conducted at the regional level with 10 Asean member countries and at the national level in Indonesia, Thailand and Vietnam. The project aims to improve access to financial tools for climate risk adaptation in the agricultural sector, with a focus on gender-responsive approaches for farmers in the region.

Thai govt addresses agricultural sector climate risk

Developing financial products in response to climate change

The Agriculture and Cooperatives Ministry presented the proposal to the Cabinet for approval of the exchange of letters regarding the implementation of the project in accordance with the Asean Agreement on the Implementation of the Asean Charter, signed in 2011, which stipulates that in cases where the Asean Secretary-General signs agreements between member countries on behalf of Asean as an intergovernmental organization, the Thai government must give consent through the Permanent Representative of Thailand to Asean in Jakarta.

The project aims to contribute to the development of financial products of various financial institutions in Thailand through training and consultancy. The goal is to have financial products that support climate change adaptation, such as flexible interest rate loans to support farmers in reducing greenhouse gas emissions from cultivation processes, among other initiatives.

Essence of Agreement

The draft exchange of letters contains important provisions that respond to the agreement and conditions of the Federal Republic of Germany to support the collaborative implementation of the project. Germany will provide support for the project with a budget of 4 million euros or approximately 150 million baht. This support will be in the form of personnel, technical assistance, and financial support as deemed appropriate.

For its part, Asean will facilitate and support the implementation of the project including efforts to exempt direct taxes levied in Asean member countries, waive licensing fees, port charges, and import taxes collected in member countries for the intergovernmental organisation cooperation between Germany and the bloc. 

In the past, the Cabinet has approved and expressed its support for the draft memorandum of understanding and agreement for the implementation of the "Promotion of Sustainable Agricultural Value Chains in ASEAN" project, which is considered a similar type of initiative.

Next government not bound to Agreement

The Agriculture and Cooperatives and Foreign Affairs ministries along with the Office of the Council of State stated that the aforementioned exchange of letters is not a binding agreement under Article 178 of the Thai Constitution. They also believe that the approval of the exchange of letters does not create binding obligations for the subsequent Cabinet under Article 169 (1) of the Thai Constitution.