The hypermarket operator Tesco Lotus and five partners have signed a contract farming agreement to acquire shrimp directly from Thai producers.
The retailer plans to buy more than 2,000 tonnes of white shrimp every year at a satisfactory price from farm cooperatives, bypassing middlemen.
The cooperatives comprise: Chanthaburi Shrimp Farmers, Khung Kraben Fishery, Bang Pakong Shrimp Farming, Trat Yangyuen and Sam Roi Yot-Pran Buri Shrimp Raisers.
The Federation of Shrimp Farming Cooperatives of Thailand will help set production targets, marketing plans, quality control and delivery.
Bangkok Bank will provide financial support for farmers in the cooperatives, covering about 1,200 families, and Poe-ma International Insurance Broker will provide insurance coverage for shrimp farming risks.
Tesco Lotus senior vice-president Dr Darmp Sukontasap said the agreement would stimulate Thailand’s economy and raise farmers’ standard of living.
“It helps both the broader economy and local shrimp farming communities in a sustainable way. Our customers will get to buy quality product at fair prices,” he said.
Agriculture Minister Theera Wongsamut said about 90% of Thailand’s shrimp production or 500,000 tonnes a year was exported, but import barriers have been increasing in recent years and the ministry wanted to expand the domestic market.
He said the Fisheries Department would help supervise production and issue certification for product quality.