Bangkok: Thammanat, the Deputy Prime Minister and Minister of Agriculture, has urgently directed the Dairy Farming Promotion Organization of Thailand (DPO) to expedite the acceptance of raw milk and address outstanding debts to cooperatives and trading partners. This directive comes after an incident where farmers were forced to discard over 40 tons of raw milk due to the DPO's inability to accept milk at its factories. The situation has begun to ease, with the DPO gradually settling outstanding payments for raw milk and packaging materials.
According to Thai News Agency, Deputy Prime Minister Captain Thammanat Phromphao received a report from the DPO indicating that discussions had been held with dairy cooperative members to address the processing of raw milk under the existing Memorandum of Understanding (MOU). The financial liquidity issues and packaging challenges have been identified as key areas requiring immediate attention.
The DPO has been instructed to resolve packaging cost issues urgently to ensure sufficient supply for processed milk. This chronic problem has significantly impacted farmers' liquidity, resulting in the disposal of over 40 tons of raw milk earlier this month. Continuous meetings have been held to monitor progress, with a directive for resolution within 1-2 days to relieve farmers' hardships.
Recently, Ms. Watcharee Wannasri, Director of the DPO, announced that a meeting with the Thai-Denmark Dairy Cooperative led to a mutually beneficial resolution. The DPO agreed to resume raw milk collection in alignment with the MOU and is working on settling milk and packaging payments. The DPO plans to pay an additional 150 million baht for raw milk this month, following a payment of 213 million baht in December, while addressing packaging costs with recent payments.
The DPO faces accumulated debts exceeding 3 billion baht, covering milk payments and trade debts. Efforts to revitalize the business include generating significant revenue and reducing production costs. The DPO aims to adapt by developing premium dairy products and expanding into modern trade and online markets, with the goal of regaining annual revenue exceeding 10 billion baht.