02/10/2012 (Bangkok Post) - Unquestionably, one of several hot topics facing Thai society nowadays is the ongoing integration into the Asean Economic Community (AEC), which will officially take place in less than three years from now. This, naturally, presents both opportunities and challenges for Thailand, especially in the agricultural sector, which has long been our economic backbone and main source of employment.

But what will be the benefits and challenges for Thailand’s farm sector? And how should we prepare to reap the potential gains?

Firstly, the AEC means more opportunities to expand Thai agricultural shipments in the region. Southeast Asia is already one of Thailand’s main agricultural export destinations. Thailand’s farm shipments to Asean countries totalled around 270 billion baht in 2011, growing by 24% from the year before, mainly rubber, sugar, rice and various grains.

AEC rules will give Thai exporters better access to the region’s nearly 600 million people. And regional shipments of goods will become freer and more efficient because tax barriers will be eventually eliminated. Transport systems will become more deeply integrated, and logistics system will significantly improve. In other words, the AEC will enable easier movement of goods, services, investment, capital and people. Ultimately, it will offer new ways of coordinating supply chains, or access to new markets for established products.

One noticeable industry set to benefit is sugar. As the largest sugar producer and exporter among Asean, Thailand is optimally positioned to serve regional demand, which is expected to grow steadily. Southeast Asia faces a long-term sugar deficit, as regional demand continues to outpace supply, driven especially by Indonesia, which is Thailand’s biggest market. As new consumer demand emerges and usage of ethanol ramps up, we should maximise this sweet opportunity.

Beyond trade, the AEC will also increase prospects for direct investment. Entrepreneurs who are financially and technologically prepared will discover new opportunities to invest in nearby countries that are rich in resources and other production inputs, especially cheap labour.