Harnessing ICT Potential for the Benefits of Farmers and by uur36286


									      The views expressed in this paper are the views of the author and do not necessarily reflect
         the views or policies of the Asian Development Bank. The Asian Development Bank
                       does not guarantee the accuracy of the data presented.

        Harnessing ICT Potential for the Benefits of Farmers and the Rural Poor:
      Experience and Vision of Bank for Agriculture and Agricultural Cooperatives
                                   (BAAC), Thailand

                                     By Pittayapol Nattaradol
                   Bank for Agriculture and Agricultural Cooperatives (BAAC)

                               Shanghai, People’ Republic of China
                                          May 10, 2002

I.         Introduction

Rapid developments and revolution in information and communication technology (ICT)
have provided significant tools for development banks. It helps in increasing efficiency
and enhances productivity of the staff, at the same time enabling banks in providing
prompt and quality services to its customers and general public. Its potential
advancement in the 21st century carries more hopes for the developing countries. This
potent and powerful technology has been a boon for the people and institutions. ICT can
play effective role in poverty alleviation in the urban and the rural areas. It is
commendable that the Asian Development Bank, which oversees the development of
Asia and the Pacific region, with special focus on poverty alleviation, is organizing the
seminar on unlocking the ICT potential in the region. This seminar, which is held in
conjunction with the 35th Annual Meeting of the Board of Governors of the Bank, will be
of great importance in highlighting the problems and prospects in the use of ICT for
agricultural and rural development in the region.

This brief paper attempts to: discuss the issue of harnessing the potential of ICT
revolution for the benefit of the developing countries; describe experience, plans and
vision of Bank for Agriculture and Agricultural Cooperatives (BAAC), Thailand, regarding
the use of ICT for agricultural and rural development; use of ICT for poverty alleviation
and improving quality of life of rural people; describe the BAAC Agricultural Information
Network (AIN); describe opportunities, constrains and risks in reaping benefits of ICT
revolution; suggestion regarding formation regional network for ICT development in Asia
for harnessing ICT potential for agricultural and rural development. The paper ends with
a brief concluding remark.

Ii.        Harnessing ICT Potential For Agricultural And Rural Development With
           Special Focus On The Poor

Harnessing ICT potential for helping farmers and the rural poor in developing
It is generally accepted that the developing countries have not been able to benefit from
ICT developments to the extent they deserve. Use of ICT would greatly help the
developing countries to increase the living standards and raise the quality of life of
farmers and the rural poor. ICT can be of immense help for developing countries to bring
prosperity in the rural areas. But many developing countries, specially the poor, have not
been able to get benefits from this technology. Less than 15 per cent of the ICT users
live in developing countries. It is pertinent that ways and means should be devised to
enable the developing countries to reap benefit from ICT revolution. The world bodies
and industrialized countries are aware about this digital divide between the rich
industrialized countries and poor developing countries. The UNDP has set up the ICT
Trust Fund for Development on October 31, 2001. The United Nations ICT Task Force
and G8 Digital Opportunity Task Force (DOT Force) have been launched in 2000 to
identify the ways to help the developing countries, specially focusing on the poorest and
marginalized people. These are some of the steps taken by the United Nations, World
Bank, Japan and other industrialized countries of G8 Group in favor of the developing
countries towards equitable distribution of benefit of ICT revolution. The farmers and the
rural poor of the developing countries in Asia and the Pacific are expected to benefit
from these initiatives.

Capturing ICT potentials for agricultural and rural development
with special focus on the poor and marginalized groups

The development banks, government agencies, bi-lateral and multilateral development
agencies and private sector have been using ICT in order to enhance their own
efficiencies and to fulfill their mandates. Commitments and serious efforts are needed to
bring ICT to the poor and weaker sections of the society.

The farmers and poor people in the rural areas in the developing countries are not
getting full advantage of ICT revolution to enhance productivity and generate more
income by value addition and marketing their products. Prevention of losses from natural
disasters is possible through the use of ICT. Timely information regarding various
aspects of agriculture could help the farmers a lot. Information on marketing and prices
could help the farmers and rural entrepreneurs to augment their income.

Various ICT packages could be developed for the development of rural and coastal
areas such as prevention of or safety from the natural disasters; creation of income
generating activities; linking of rural and coastal areas with main stream markets;
provision of technology for value addition in products; arrangements to provide market
and price information; and host of similar packages could be developed and used with a
view to help the farmers and the rural poor.

Due to lack of awareness and illiteracy on the part of the poor people in rural areas on
the one hand and lack of commitment, knowledge-base and funding sources with the
governments and related agencies on the other hand, such packages are rarely
conceived and implemented in the rural areas of developing countries.

Grameen Bank of Bangladesh has been able to help rural people, especially rural
women, by providing mobile phone facilities in the underdeveloped urban areas, coastal
areas and rural areas. This facility has helped the poor and women in getting timely
information on market prices and other relevant information. This has helped in

increasing their income and improving their quality of life. The poor and marginalized
communities are unable to own modern gadgets to benefit from ICT. Therefore, some
governments and development agencies and NGOs have tried to provide facilities to
access information through community centers. These efforts have, to some extent,
helped the rural poor and marginalized groups to benefit from ICT revolution. Similar
attempts could be made extensively to bring the benefits of ICT advancement to the
poorest of the poor and disadvantaged groups in rural areas, under developed urban
areas and far flung coastal areas in developing countries

Unless the developed countries and international development agencies come forward
with generous assistance, it is difficult to comprehend when and how the agricultural and
rural areas of the developing countries could benefit from ICT revolution. The
partnerships between national governments, private sector enterprises, ICT industry
leaders, industrialized countries and international development agencies will be helpful
in addressing this issue.

Unleashing ICT potential for poverty alleviation and
improving the quality of life of rural poor

It is definitely possible to use ICT for alleviating poverty among rural poor, women and
marginalized groups. ICT can be the means through which the poor and underprivileged
people improve their efficiencies and take up income generating activities. Information
related with health, education, public welfare, opportunities to work, disaster alerts and
so on could help the rural people to improve their standards of living.

Programs can be developed to encourage the poor to take up income generating
activities. What are required are the systems whereby the poor can access information
about the opportunities to take up income generating activities in order to escape from
poverty trap. Governments, development agencies and private sector can forge a
partnership to help the rural poor by using ICT for providing information for income
generation and improving quality of life.

III.   Opportunities, Constraints And Risks In The Use Of ICT: Perspectives Of
       Development Banks

Opportunities provided by recent developments and potential expansion in the 21st
century in ICT are many folds. Individuals, communities, governments and institutions
can use ICT for the development of industries, good governance, social benefits,
improving of quality of life of people. There are underlying constrains and risks in
effective using booming ICT. Many countries especially less developed countries will
have constraints in reaping the benefits for ICT revolution.

Lack of knowledge-based infrastructures, lack of awareness, dearth of trained human
resources and lack of fund to acquire the software and hardware can pose severe
constraints. Considerable amount of fund and trained manpower are required to update
and maintain the systems. The developing countries, especially the poor countries, may
not be able to continuously provide funds for hardware and software as well as training
for human resource development for the purpose. Donor dependence will increase.
Continuous support from donors through grants and loans might not be forthcoming.

External loans, if not used for sustainable development generating income to repay the
loan, will be burden for many poor countries.

There are risks emanating from the lack of proper maintenance of ICT systems. As the
hardware and software become obsolete over a period of time, unless otherwise
upgraded and well-maintained, there is risk of system failure. The risks cannot be
avoided unless arrangements are made for constant monitoring, timely maintenance and
repair by skilled personnel. There is also a risk of mishandling of sophisticated ICT
software and hardware by immature and untrained personnel. The risks of such failures
can be very costly, some times beyond repair. Unforeseen natural or manmade
disasters or disturbances may halt smooth flow of businesses and activities creating
great inconveniences.

Opportunities, constraints and risks in the use of ICT are varied and wide ranging. In this
paper these aspects are dealt with in the case of development banks including BAAC in
Asia and the Pacific Region.


The ICT revolution provides development banks with wide range of options to increase
their efficiency and productivity. The banks can offer variety of services to the customers
such as Internet and wireless online services. Electronic banking can be more efficient
with less paper work in the paperless banking environment. Desktop and handheld
electronic devices keep the banks constantly in touch with the clients facilitating two-way
communications. Transaction cost and time spent will be drastically reduced.
Productivity and efficiency will increase both for the banks and customers. Electronic
banking will take the lead in the coming years. Many banks in the region, including
BAAC, have already experienced advantages of using ICT.

Accesses to information from various agencies within the countries and from other parts
of the world help improving efficiency, productivity and profitability of the banks. The
banks can also use information generated within the institution to disseminate to the
customers through fixed or wireless communication devices or Internet.

Timely information on technology, input supplies, potential market for products and price
information help the customers to increase their income and facilitates timely repayment
of loan; deposit mobilization and increasing loans to farmers and entrepreneurs. Banks
can, through its Internet portals, promote their businesses. Information can be provided
to the customers and other stakeholders through the Internet portals.

Many businesses can be conducted electronically by using secured Internet traffic. The
opportunities are vast, useful and help the banks to be technology savvy for innovations
that bring benefits to the bank, the customers and general public.


ICT uses for the banks are relatively expensive. More expenditure is required for trained
and skilled manpower, regular maintenance, u    pgrading and replacement of hardware
and updating software.

  Proper use of ICT may yield income over a period of time. Initial investments for
appropriate systems and programs tailored to the need of the banks may be quite high.
If a bank does not have enough funds, it may be quite difficult to derive benefit from
rapidly growing ICT. It is even more difficult to take up ICT know how and install in the
bank, if the stake holders, share holders and controllers of the banks are not technology-
friendly, but only want to control expenditures.

The banks for agriculture and rural development have to take the ICT to people most of
who are poor and illiterate. Such customers may realize at a later stage how useful it is
to deal with banks using ICT. In the initial phase, the banks may have to spend time and
money to make the customers friendly with the banks’new systems and programs. It is
especially difficult and expensive to extend services in remote areas and distant
undeveloped coastal areas.

Funding is a major constrain in the use of ICT for agricultural and rural development
programs to alleviate poverty and increase quality of life of the people. Such systems
and programs are difficult to run in rural areas by charging fees for ICT services. Unless
the rural poor can generate income from such projects, it may not be logical to charge
fees. Grants from donor agencies can help. But it is not so easy to get grants for such
projects. At the most donors may agree to provide soft term loans. But already highly
indebted governments in developing countries may not be willing to borrow.


Banks take risks while selecting hardware and software for designing systems and
programs according to the state-of-the-art of ICT. Risk of selecting inappropriate
hardware and software are not uncommon. Handling of installed ICT by untrained and
unskilled personnel may ruin and disturb the functioning of banks. Risks of installation
and maintenance by unskilled and untrained personnel are more in the banks with poor
manpower. Wear and tear of hardware due to poor maintenance is also a risk for
efficient use of ICT. Software does not run well in the obsolete hardware. There is a risk
of system failure if arrangements are not made for regular monitoring, maintenance and

Risks of mishandling sophisticated ICT equipments by untrained personnel should be
avoided. The banks using ICT intensively for front office and back office functions risks
the error occurring from faulty system and inappropriate system design. Internet and
online banking also face high risks within the bank and external risks through hackers
and sneakers.

There is also risk of abandonment of programs launched by banks due to lack of funds.
Such programs are either ill conceived or based on donor support. Withdrawal of donor
support leads to abandonment of programs. Therefore, sustainability aspects should be
given priority while launching ICT programs.

IV.     Bank For Agriculture And Agricultural Cooperatives (BAAC), Thailand: An

Agricultural sector plays an important role in the Thai economy. It contributes about 11
per cent of national GDP and employs about 50 per cent of the labor force. Agricultural
sector contributes about 15 per cent of the country’ exports. Majority of the people in

rural areas depend upon agriculture for their livelihood. BAAC plays an important role in
helping the farmers and rural poor in Thailand by providing financial and technical

The Bank for Agriculture and Agricultural Cooperatives (BAAC) was established in 1966
by the Government as the specialized bank to provide banking services to improve
income and quality of life of Thai farmers. The Bank operates as the state enterprise
under the Ministry of Finance. BAAC has the mandate to provide financial services to
farmers, farmers’cooperatives, and farmers’associations for farming and non-farm

BAAC has a decentralized structure of authority. The 15 member Board of Directors is
headed by Minister of Finance. The executive committee of the Bank headed by its
President and five senior executive vice presidents is responsible for day-to-day
administration. The senior management team consists of 14 department heads (senior
vice presidents). The branch network of the Bank includes 74 provincial offices; 437
main branches; 55 mini branches; 19 special mini branches; 77 sub-branches; and 887
field offices. Thus the branch network of BAAC consists of 74 provincial offices, 588
branches and 887 field offices. BAAC has Islamic banking windows in the 4 of its
branches; The Bank has established following project offices in its head quarters to
oversee respective pilot projects: Micro Finance Linkage Project (in cooperation with
GTZ of Germany) and Social Support Project (in cooperation with European Union).
BAAC has also collaborated with Japan Bank for International Cooperation (JBIC) for
conducting studies to uplift the standards of living of the farmers.

Functional responsibilities of BAAC are delegated to the provincial offices. BAAC has
placed about 90 percent of its nearly 13 thousand staff in the branches and field offices
all over the country.

BAAC has been guided by, among others, two distinct objectives, namely achieving
maximum outreach to its clients and maintaining financial viability. As a result, BAAC
has approximately 5 million farm households as its clients (about 91 per cent of the total
farm households in Thailand). A field officer of the Bank handles on an average 600 to
700 customers. The Bank has achieved commendable success in direct retail lending to
individual farmers organized as joint liability groups (JLG). By the end of 1987 the Bank
formed about 100,000 such groups with 1.5 million members. Presently the number of
JLGs has reached almost 277 thousand with 3.62 million members. Members of such
groups get loan up to 100,000 baht without collateral. BAAC provides its services mainly
to agricultural sector. In view of its responsibility to play an increasing role in rural
development, following amendment in the Act of the Bank in early 1990s, the Bank
started providing financial and technical services to non-farm enterprises also. BAAC
has moved a step ahead in providing microfinance to the rural poor under the
microfinance linkage pilot project.

BAAC started savings mobilization campaign in the late 1980s. The campaign was
highly successful in mobilizing deposits, which greatly helped the Bank to raise its own
operating fund. Deposits consisted 70 per cent of the Bank’ total operating fund in
2000. Innovations introduced by the Bank and public confidence in the Bank were the
main contributing factors to the sustained growth in deposits.

Reform of BAAC was carried out in four phases from its inception to-date. The brief
highlights of the reforms are given below.

Phase 1 (1966 - 1974) – Laying foundation: During this phase credit technology was
designed amidst the problem and constraints of dependence on government for working

Phase II (1975 - 1987) – Consolidation and strengthening of lending operations: Access
to commercial bank deposits and donor funds; shift from wholesale to retail lending;
increasing efficiency (use of computer programs) and reducing costs.

Phase III (1988 - 1996) – Rapid growth, outreach expansion and diversification:
Financial sector reform; expansion of branch network to maximize outreach; savings
mobilization; improving loan recovery; financial sector reforms; increasing productivity of
the Bank to maintain financial viability.

Phase IV (1997 - to-date) – The Effects of financial crisis and reform agenda ahead:
Losses from the devaluation of the Thai currency; rise in nonperforming loans; prudential
regulation and supervision: diversification to non-farm-lending.

V.     Experience Of Bank For Agricultural And Agricultural Cooperatives (BAAC)
       In The Use Of ICT


BAAC has been using various ICT devices since its establishment in 1966. Fax was
used starting 1985. Computerization was started in the head office and selected
branches since 1981. Rented telex was used in 1982 and was phased out in 2000 by
canceling contract. BAAC also helped agricultural marketing cooperatives in using
computers in 1989.
It may be noted that computer program, used in the early 1980s, helped BAAC not only
sending computer-printed loan repayment reminders to its farmer-customers on time, but
also provided timely and appropriate management information to the managers at the
operational level including branch managers, chief of the field units and credit officers.
Staff productivity and performance standards also improved.

BAAC Main System consists of Front Office System for loans and deposits and Back
Office System for accounting; financial management information; management; and
other information systems for agricultural cooperatives, human resource management,
office automation and microcomputers.

Since the early 1990s BAAC launched its computer network. BAAC Network consists of
Local Area Network (LAN) and Wide Area Network (WAN). LAN was established in 1994
and, WAN was launched in 1996. LAN was launched for data and information exchange
between head office and Information Technology Centre of BAAC. WAN was used for
data transmission and information exchange between the head office and branch offices
all over the country. The BAAC Network serves existing applications such as file transfer
and inter-bank deposit withdrawals.

Three different information systems were used by BAAC:

   1.   Loan, deposit and customer management service system used for branch
        offices was started in 1980 using COBOL programming on UNIX Operating

   2.   Management Information System (MIS) was started in 1994. This system is
        composed of a number of applications deployed on Infomix (DBMS) and used
        for – (a) calculation of loan and deposit data transferred daily from branch offices
        and for making several summarizations, (b) calculating aggregate of accounting
        data entered daily in each branch office, (c) preparation of management indices
        from loan and deposit activities; and

   3.   Financial Management Information System (FMIS) was started in 2000. This
        system is composed of several SAP applications deployed on ORACLE (DBMS)
        and is used for financial and accounting purposes.

BAAC started Web-based Intranet operations in September 2000. All branch offices of
BAAC use Intranet for following purposes:
          • Accessing banking documents from head office;
          • collection of reports from the provincial and branch offices;
          • transmission of reference data and information for day-to-day work;
          • supply of reference information such as government announcements,
             economic indicators and so on; and
          • Interface of Financial Management Information System

Internet and Intranet devices were used for efficient functioning of the Bank.
There are 29 independent Intranet web servers in BAAC. Most of the departments and
some divisions in BAAC operate web servers independently.

BAAC continuously pursued the policy of using the up-to-date computer programs and
communication system for enhancing its efficiency in providing its services to 91 per cent
farm families through out the country.

Use of ICT delivers positive results: Experience of BAAC

Use of computers since early eighties helped BAAC in enhancing its performance and
providing useful services to its clients in many ways:
           • Standard and quality of services rendered by the Bank improved;
           • Productivity of staff increased. About 13,000 staff provided services to
               about 5 million household;
           • Branches have been able to provide their services to a large number of
               customers. On an average a field officer has been able to provide
               services to 600 to 700 customers compared to about 300 to 400
               customers before the use of ICT;
           • Transaction costs for bank and its customers could be decreased;
           • Farmers could save time and money because of fast services;
           • Customers could get useful information through the monitors placed in
               branch offices while waiting for the transactions;
           • Information about market potential and prices could help farmers in
               decision making to increase their income;

           •   Loan recovery improved significantly thanks to the timely reminders sent
               to the individual borrowers through the group leaders. Use of computers
               enabled bank branches to print out loan repayment reminders to the
               customers well on time; so that the credit officers can distribute the
               reminders the customers well before the end every fiscal year. The
               unique system of loan passbook issued by BAAC to the customers has
               been helpful in timely loan recovery. Each customer is given a loan
               passbook, which shows loan disbursements, repayments and outstanding
               balance of loan to be repaid. The loan passbook served as bank
               statement for the customers.
-      Agricultural marketing cooperatives have been able to help farmer members to
       get better price for their products and get inputs at fair price due to use of
       computers in accessing timely information provided by BAAC.

Constraints: Need of upgrading and replacing the hardware and updating the

The developments and progress in ICT are so fast that frequent and timely upgrading
the hardware and software is required to move with the technology. The process of
upgrading and updating should be continuous. The hardware should be upgraded or
replaced as soon as it gets old and becomes obsolete and less reliable. BAAC systems
are also affected by this problem. Regular upgrading and updat ing are required.

BAAC programs need to be upgraded and updated using suitable operating systems. It
is felt that BAAC system has following constraints:
     • Unix operating system and Cobol programs are not suitable to distributed
     • The master files of individual loan information are not centralized and most of the
          important individual data are kept at branch office level;
     • Data storage disk system is lacking
     • COBOL, which can not perform data storing function, is used to develop the loan
          system and can not retrieve data as desired by BAAC;
     • Customer information system is developed by using COBOL. It is difficult to use
          for farmer information because the branches share the computers with other
          banking activities.

The other constrains are as follows:
       • Existing hardware and software are less efficient in data processing;
       • Wear and tear of existing hardware
       • Low capacity of existing LAN and WAN system
       • Lack of spare parts to repair some of the existing hardware
       • Difficulty in online transactions and full use of data for business opportunities
           due to decentralized data base system.

Core Banking System (CBS)

In order to overcome above-mentioned constrains in using ICT effectively BAAC has
started working on core banking system (CBS). The project will be completed by the
year 2003. The CBS will help in integrating front office and back office transactions. It
will be possible to collect customer information and individual transactions from all

branches by the head office for analysis and management information. This integrated
system will facilitate in all aspects of banking transaction, branch activities and
customers record at the head office level.

VI.      Vision And Plans Of BAAC To Use ICT For Agricultural And Rural
         Development With Focus On Poverty Alleviation


BAAC contemplates to be one of the efficient agricultural and rural development banks
in Asia and the Pacific by using high – tech ICT. By using ICT BAAC will embrace
electronic banking system for enhancing its efficiency and providing best quality services
to its customers giving access to BAAC portals for e-commerce and online banking. It
will contribute in poverty alleviation in rural areas by using ICT product and
disseminating information to the farmers and rural people, focusing on the poor and
marginalized groups. Cooperatives and Framer’ Associations will be strengthened to
disseminate information and provide services to their members, especially the poor.
BAAC will embrace state-of-the-art and best practices in banking and customer services
to realize its vision.

IT Master Plan of BAAC

BAAC formulated IT Master Plan in June 9, 1998 with the aim to use it as the guideline
in ICT development and investment needs. The government policy also stipulates that
that all ministries and state-owned enterprises must have IT Master Plan for proper use
of investments and expedite implementation and prevent failures of IT projects.

The objectives of the IT Master plan are as follows:
      • To develop plan for five years for the development and use of IT in BAAC with
          clear direction and specific goals
      • To support the core business of BAAC
      • To seek long-term solution for ICT developments in BAAC

Some of the provisions of the Master Plan have been implemented and others are in the
process of implementation. The IT Master Plan will take care of the constraints and
problems of ICT use in BAAC.

BAAC has devised IT Master Plan to consolidate front office and back office operations
of the bank and continuously monitor the systems. The systems will be developed to
provide quality services to the clients and support efficient back office operations.

Plans and programs of BAAC to reap benefits of ICT for agricultural and rural
development with focus on poverty alleviation

BAAC has tried to use ICT for increasing its efficiency and providing quality services to
its customers from the time of its inception. The Bank has been continuously trying to
harness the benefit from the rapidly developing ICT for the agricultural and rural
development. Currently, the vision, mission and strategy of the Bank are the focus on
the business strategy and corporate plan prepared in support of the farmers and the
rural poor. The corporate and business strategy plans focus on information base,

marketing for rural communities, master plan for rural areas, rural institutions, rural small
and medium-size enterprises, farmers’rehabilitation, consultancy/advisory services to
village fund committees and, promotion of rural enterprises.

After having completed feasibility studies, three other projects are in the process of

1.     Agricultural Information Network (AIN)

In the process of carrying out its activities for agricultural and rural development, BAAC
felt that there is a need to generate and disseminate the information in the area.
Collection, dissemination and exchange of information pertaining to various aspects of
agricultural development were perceived as of vital importance. BAAC conceived the
idea of using fast developing ICT for agricultural information network for t e purpose.
Agricultural Information Network (AIN) is an Internet based portal, which enables
farmers, field officers of BAAC, policy makers and the government to generate access
and exchange relevant and useful agricultural information. The feasibility study of AIN
was conducted with the funding support of Canadian International Development Agency
(CIDA). The feasibility study was carried out by BAAC, Information and Communication
Technology (ICT) Development Group and Versatile Mobile System of Canada. More
information on AIN is provided in the section VII of this paper.

2.     Crop Information System (CIS)

As a part of its rural development program, BAAC has planned to develop and
implement Crop Information System, which aims to prepare the database for farmers
and agricultural cooperatives and facilitate easy access to agricultural information on
crops, weather pattern, pest and disease control, agricultural market prices, and crop
diversification opportunities.

Special Assistance for Project Sustainability (SAPS):

Prior to carrying out feasibility study on CIS, Japan Bank for International Cooperation
(JBIC) funded a project under the scheme called Special Assistance for Project
Sustainability (SAPS) to study and conduct research regarding sustainability of the CIS
Project by a team of experts in 20001- 2002. The team, in the process of study, carried
out survey in a province to prioritize information contents of CIS and CIS Development
plan was formulated.

The CIS pilot project was started in 2000 to prepare customer database. The pilot survey
was conducted to identify information needs at national, regional and local levels.

3.     Crop and Village Information System (CVIS)

After undertaking the pilot project, and taking into account the development policies of
the Government and BAAC, a project proposal has been prepared on Crop and Village
Information System (CVIS). The project is expected to be the model for nationwide
implementation. The project plans to have the following components: community based
rural development plan; data collection by using pocket PCs; farm data record system;
technical advice and credit services; plans and procedures for implementation of the

project; database with appropriate hardware and software specifications; operation and
maintenance manual for software and hardware; pilot operation; training for trainers and
training for farmers and community organizations; pilot operation of sub-project;
monitoring and evaluation; and plan for nationwide implementation. Farm households of
5 pilot sites will benefit from the pilot project.

Pilot project will prioritize development programs of the government and BAAC. The pilot
project will be completed within 3 years and the nationwide implementation will take
another 4 years.

The proposal is prepared for Technical Cooperation under Development/Project Type
Study to be funded by The Government of Japan.

VII.      Agricultural Information Network (AIM):
          Taping The Potential Of ICT Revolution For
          Agricultural And Rural Development –
          Vision Of BAAC

Agricultural Information Network (AIN) is an Internet ready, Geographic Information
System (GIS) network providing wired and wireless access to agricultural information in
Thailand. The Internet based portal enables farmers, field officers of BAAC, policy
makers and the government to access relevant and useful agricultural information. Bank
for Agriculture and Agricultural Cooperatives (BAAC) conceived the Agricultural
Information Network (AIN) to deliver reliable information and services to a client base of
about 5 million farm households through out Thailand. Internet portal is core component
of AIN. The portal helps the users to manage a wide range of agricultural data in both
Thai and English Languages. It provides access to all stakeholders to get the information
they need to improve their activities with regard to agriculture, decrease loan risk and
reduces the risks in Agriculture. The information generated by AIN includes prices of
goods at various locations, appropriate agriculture technologies, and best practices from
successful farming and agri-business in the region. The key advantage of AIN is
accessibility. Information needed by the farmers can be delivered in person by BAAC
field officers and staff or transmitted via radio, fax, com munity audio towers, and through
wired or mobile phones. AIN can transmit information in a variety of wireless or wired
interfaces and devices. Information on locations of best soils for various crops, areas
affected by drought in the last 5 years can be obtained via AIN. Farmers can access AIN
information in any one of the branch offices of BAAC spread throughout the country.
Researchers and policy planners can find aggregated data by using AIN search engine.
Field officers of the Bank, cooperatives, farmers’associations and farmers can use cell
phones to get up-to-date market information. AIN helps farmers and field officers collect
data in its on line database. Cost of production, total acreage, and yields will be available
for decision makers, policy makers and planners within BAAC, Ministry of Finance,
Ministry Agricultural and Cooperatives and other related government agencies.

AIN provides decision-making tools

The applications envisioned for AIN provides following tools:

       1. Risk assessment;
       2. Loan decision;

    3. Crop insurance;
    4. Market information;
    5. Crop management;
6. Land suitability; and
7. Agriculture knowledge base.

Potential users of AIN

BAAC staff, clients (farmers, members of farmers’ Association and agricultural
cooperatives), agricultural extension workers, government and other financial
institutions, agri-business communities, Small and Medium Sized Enterprises (SMEs)
are the potential users of AIN.

Thai Government’ priority and BAAC mandate is to increase agricultural production and
raise income of farmers and rural people, specially the poor. AIN helps in increasing
farm production, value addition to the products, increase income through appropriate
marketing strategies and avoiding risks.

BAAC has branch network throughout the country. The field officers have direct contact
with farmers and other clients. They have little accurate and up-to-date agricultural
information such as market prices and best practices in agriculture. BAAC staff and
other users can acquire and disseminate data for assessing, designing and managing
loan operations. Field officers will also be able to provide the knowledge to the clients,
the knowledge they need to be more productive and successful farmers. BAAC field
officers, most likely, will be the best users of AIN.

Bringing Thailand’ agriculture into the 21st century via AIN

AIN will help Thai farmers to access information they need for better or best farming
decisions. The land suitability tool will help them determine the best crops to grow on
their land, using historical information and local conditions, floods and drought. The crop
decision tool will help farmers to decide which crop will provide the best return on
investment by identifying supply of specific crops and crop verities throughout the

Better decision making at the farmer level will have positive impact in Thai economy.
Increased crop yield means higher level of income for farmers, thereby stimulating
increased spending by the farmers in the local economy and raising the standard of
livings of the rural people. AIN will catalyze agricultural prosperity in rural Thailand.

AIN communication mechanism

                             Thai farmers and cooperatives

   Radio Broadcasts WebTV         Call Centers ATMs Personal Assistance Device

   Field officers Telecenters             Telephones          Computers

                                  BAAC AIN Portal

Outputs of AIN
      • Better decision making
      • More productive farmers and inc reased productivity
      • Improved loan repayment
      • Improved individual and organizational account ratings
      • Improved return on investment

Goal, Objectives and Utilities of AIN

Goal:         To strengthen the capacity of farmers through enhancing agricultural
              productivity and reducing poverty levels

Objectives:   1. Identify agricultural information needs of female and male AIN
              2. Determine currently existing and accessible information
              3. Identify most appropriate media for information dissemination and
                 ways and means to share, collect and distribute information among
              4. Design IT architecture and applications which will effectively and
                 efficiently deliver AIN content to stakeholder/users
              5. Implement, deploy and commission AIN
              6. Evaluate lesions learned and integrate in future phases of AIN

     • Information on up-to-date agricultural commodities
     • Weather and agricultural news and information
     • Information updates through mobile telephones on markets, storm warning and
         so on
     • Help predict crop and land suitability through remote sensing and geographical
         information system
     • Identification of areas of risks and devastations before and after major natural
         disasters such as flood through satellite imagery

AIN return on investment

Operating in 72 provinces AIN will be sustainable and revenue generating network
drawing from a variety of sources such as:
   § Profit sharing with Telecom companies offering wireless (WAP) and Shot
       Message Service (SMS) to deliver AIN information.
   § Private sector advertising on AIN portal
   § Sales of agricultural market studies using aggregates from AIN-derived data

Cost of the AIN
                                                        (in million USD)

      •   Phase II pilot province - 12 month                            2.0
      •   Phase III deployment in 4 provinces                           4.0
      •   Phase IV deployment in 67 provinces                 7.8
      •   Total cost of 72 province                                     13.8

Impact of AIN

      1. Increased agricultural productivity of farmers;
      2. Stabilized agricultural incomes; and
      3. Improved quality of life in rural areas and reduction in the
         incidence of poverty

Constraints and donor support

Phase I of the AIN: Feasibility study has been completed with the funding support of
CIDA. During the Phase one, detailed needs assessment was carried out in 3 provinces;
Bilingual prototype of AIN portal was developed; Land suitability and crop decision
support tools were developed using data from 2 provinces; and, Plans for Phase II, III
and IV developed and national implementation plan for AIN was formulated.

Funding for carrying out Phases II, III and IV is major constrains. On top of that
expenditures for training and logistics have to be arranged.

Sharing of BAAC-AIN Technology with other developing countries

BAAC, after successfully executing the project in Phase II, is willing to share the AIN ICT
with other developing countries, especially with the countries in Indochina and South
Asia, to start with.

VIII.     Regional Network For ICT In Asia

Cooperation between the countries in Asian region in sharing expertise and experiences
will be helpful in capturing the benefit of ICT revolution. Self help among the countries in
Asia in the field of ICT development will greatly help the less developed countries. The
relatively developed countries not only help their neighbors but also can benefit by
marketing their products.

The ICT projects in the region can benefit from the cooperation and collaborations
between the countries and various development agencies. It will help the Asian countries
if these countries could form a network for ICT Development in Asia. The governments,
banks, government agencies and non-government organization, ICT leaders, private
sector enterprises in the region can form such network. Donor Agencies and
International Leaders of ICT may also be invited to join the network. Regional network
for ICT Development in Asia, if formed, will help less developed countries and
communities to benefit from ICT revolution.

IX.       Conclusions

The ICT is a potent and powerful weapon, which is developing at a very fast speed. The
ICT Revolution offers excellent opportunities for the developing countries for unleashing

their development potentials. But the requirements of technology, skilled manpower and
funds for hardware and software are impediments for developing countries. Committed
support from donors can help the developing countries. Illiteracy, lack of awareness and
commitment aside, dearth funds (grants) is a major constraint. Risk assessment should
be made before launching ICT projects in poor developing countries. The ICT projects
need regular supervision and monitoring.

Bank for Agricultural and Agricultural Cooperatives (BAAC) has benefited by using ICT
from early 1980s to date, in terms of increased staff efficiency and productivity and
ability to serve large number of clients. The clients also benefited by cutting transaction
costs, saving time getting more information from BAAC branches.

BAAC has initiated Agricultural Information Network (AIN) for agricultural and rural
development, with a focus on poverty alleviation. Such projects will also be helpful for
other developing countries in Asia. Feasibility study shows positive and promising
results. Implementation of project has been delayed mainly due to lack of funding

Formation of regional network for ICT development in Asia will help in harnessing the
benefits of ICT development for poor and developing countries. The poor and
marginalized groups will benefit from such network.


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