The Historical Movement of Cooperatives in Thailand

         Cooperatives in Thailand, like in all developing countries, have been initiated by the government since 1915 with the prime aim of being a means of improving the livelihood of small farmers. This is due to the increasing debt problem resulting from farmers suffering from the shift from self-sufficient economy to trade economy. Natural disasters such as droughts and floods have further worsened the debt situation for the farmers. Consequently, they have lost their farmland and become laborers, leaving their debts unpaid.
         The first cooperative in Thailand was named Wat Chan Cooperative Unlimited Liability and was established by the government on February 26, 1916, in Phitsanulok. It followed the Raiffeisen credit cooperative type with the single purpose of providing farm credit and being organized as a small village credit cooperative to help severely indebted farmers. The success of this type of cooperative in preventing many farmers’ land from being foreclosed by the money-lenders led to the increasing number of small village credit cooperatives all over the country. Small credit cooperatives had prevailed in the country until 1983 when other types of cooperative were then established in response to the people’s needs (i.e. production and consumer cooperatives were).
        The increasing number of cooperatives also led to establishment of the “cooperative Bank” in 1974 through government capital. Village credit cooperatives were urged to increasingly hold share capital in the Bank with the hope that they would, in future, be owners of the Bank which was their own financing center. In 1952 and 1953, two provincial cooperative banks were established in the Chiang Mai and Uttaradit provinces. The two provincial cooperative banks served their affiliates so well, both in their credit needs and depositing surplus funds. Unfortunately, the enactment of a new “Commercial Banks Law” in 1962 laid down that the acceptance of deposits on “current accounts” could only be operated by commercial banks which must be organized in the form of a “limited company”. The two existing provincial cooperative banks had, therefore, to be reorganized as credit cooperative federations and a program to set up new cooperative banks was dropped. In 1966, the government-cum-credit cooperative-owned Bank for Cooperatives was reorganized as the “Bank for Agriculture and Agricultural Cooperatives”, a state enterprise, functioning as a financial center of agricultural cooperatives including lending directly to individual farmers.
        In 1968 with the objective to strengthen the cooperative movement, the Government enacted the Cooperative Act, B.E. 2511, which allowed the establishment of the Cooperative League of Thailand, functioning as the apex organization of the cooperative movement. The said Cooperative Act also allowed for the amalgamation program which combined the neighboring small village credit cooperatives, land improvement and land settlement cooperatives into a large scale cooperative at district level performing multipurpose functions and which were officially categorized as agricultural cooperatives.
 In 1999 new cooperative act as “Cooperative Act, B.E. 2542” was issued and has been enacted since then.
 At present, the cooperatives in Thailand are officially categorized into seven types, namely:

 1. Agricultural cooperative
 2. Land Settlement cooperative
 3. Fisheries cooperative
 4. Consumer cooperative
 5. Thrift and Credit Cooperative
 6. Service Cooperative
 7. Credit Union cooperative