Background and issues
Foreign Domestic Investment (FDI) nowadays it has became as a main element for developing country for instance Thailand. The inflows of FDI provide benefits and can create the massive changes within the country. Inward FDI does not affect only agricultures business industry but also affect to other types of domestic business in the country such as hotel industry, retailer business. FDI can create the benefits for the host country arises from resource-transfer effect, status of employment, balance of payment, competition status and the economic growth.
As inward FDI occurs everywhere globally, not only in Thailand. Once FDI is welcome to the host country, the host government should understand and mention the restrictions of the FDI which the host can gain and also realise the cost of its.
In the past, the economic growth recorded in Thailand during 1970s - 1980s the most income is from agricultural sector, which included adequate food for the rapidly growing population and produce commodities for export. Agricultures in Thailand it could be livestock, forestry, and fisheries. These an affect the labour force as it was estimate that some four-fifth of the total population was dependent on this sector and the average of about 25 percent of GDP, and annually from agricultural incommodities accounted for over 60 percent value of all exports. (Thailand a country study, 1987)
Until now the it seems the economic growth in Thailand most of it come from agricultural for example Thai Rice is a major exporter in the word. The statistic of exports during 2005 - 2006 has risen over the past year and according to the government policy. The rice will export continued while there are some good competitors such as Vietnam, India, and United States. (utcc2.utcc.ac.th, 2007)
Recently the global climate change can have an effect on agricultural in many countries. This decreases the production during past 3 years. Although the issues about the energy, as many countries are interested in alternative energy crops from sugarcane or palm instead of using oil. (i-sis.org.uk, 2010)
As host government may not be able to rule the subsidiaries of Foreign MNEs may have greater economic power than indigenous competitors. As the foreign MNE may be able to draw on funds generated elsewhere to subsidise its costs in the host country, which make indigenous companies out of business and allow the business firms to monopolise the market. Once the market is monopolised. The foreign MNE could raise the prices in the market which could effect on the economic welfare within the country.
Nevertheless, inward FDI also made changes in agricultural business in Thailand.
As agricultural business is one of key element of making profit in Thailand. 60 percentages of Thai farmers used to own the farms but now Thai farmers have to be hired to do the farms because most of the lands it has been purchased by Foreign MNEs. In addition, this could effect the economic growth and GDP of the country. Due to the foreign MNE invested in agriculture business by purchasing the farms and hire the Thai farmers to do the agricultural. (komchadluek.net, 2010)
Literature Reviews
The issues of inward FDI is excess globally. Once the host country decided to free trade with FDI, the host government should consider the benefits and of course the costs that they might gain and lose during the having FDI.
This is not occurring only in Thailand either only agricultural sector but it is occurring in every business industries. Since World War II, the united stated has been largest source country for FDI, also United Kingdom, France, Germany, Netherlands, and Japan also important sources countries. (United Nations, World Investment Report, 2007)
There are some of the researcher have done the research in this field from many countries.
According to the Foreign news agencies (komchadluek.net, 2010) reported on 31st May 2010 that there are some Arabian business men plan to purchase or rent the agricultural land for the farm in Eastern European and Australia. As the crisis problem is accessing in the world market commodity prices soaring to record during past couple years. Therefore, they had been trying in many countries such as Sudan, Iraq, Pakistan and Thailand
There is a Hus Sat Food Company, a fund management company's wealth of Qatar open Sat Hassan Australia Company in Sydney, Australia (FDI) in December 2009. Represent to purchase the land for planting wheat and livestock. In addition, this plan will shepherd a 1.5 hundred and produces 50 tons of wheat per year. In April, (FDI) has been purchased the agricultural land in many countries, the Arabian business men also has been offered the agriculture company by a Client Company leading supplier of business group for 1.65 landowner hundred hectares in New South Wales to Arabian investors. (komchadluek.net, 2010)
Moreover, Inward FDI could be the main advantages for the host country as the loss of nation's sovereignty with the massive scale of foreign ownership has the main importance role of the host's resources and positive to ruin the domestic business in long term (Dunning, 2000).
How to conduct the research?
The aims of this report are to study the problems of inward FDI in Thailand's agricultures industry and suggest the solutions to surmount.
This report will divide into two parts. The first part of the report will identify the problems against the impact of the inward FDI to the agricultural industry in Thailand. There will be a questionnaire: in-depth interview as a method to collect the data. Which can be imitated these two objects, to collect the qualitative data from the local agricultures industry such as the farm owner or the landowner of the agricultures which been purchased by the FDI or been offered by them by asking them majority about the impacts of the FDI agricultures to their businesses. With the open-ended questions in order to have a freely answer according to their own attitude and accepted wisdom. For example, ask them to compare their profits after the land had been purchased or the neighbours lands been purchased that what they feel and effect about it. According to Ghauri and Gronhaug, 2002 the reasons for in-depth interview is because as it can provide more accurate and clearer view of the respondent's behaviour, attitude, and position rather than other research methods can provide. In addition, summarised the data and useful information and finding the points that can identify and suggest the main issues.
The second part is to find the solution for the host country and identify how to prevent or solve the situation about the purchasing agricultural lands. As a questionnaire, method will be using as to collect data and it will be using as dividing into two sets. One set of questionnaire will be using as distribution to respondents who have been purchased the land by FDI and another set of questionnaire will be given to the respondents who have been offered by FDI about the purchasing land.
In addition, the last question on the questionnaire will be the open-ended question asking about respondents' comment on how they do understand about the FDI the benefits and costs of it.
Finally, analyze and compare those two sets of questionnaire and figure out the solution. That could prevent or to overcome from the situation.
Conclusion
As above state, this report plans to conduct two survey methods to achieve the two main objectives of this research. In-depth interview is using to describe the situation of the issues and to know how the local farmer farm owner understand about the FDI about purchasing land in long run.
Moreover, the second part of survey is to discover the solution in this problem. In general, the proper way to solve this problem is widely conducted by many researchers from many countries where having similar problem as in Thailand. As there are two main ways, many researchers about the contribution from government suggest which are commonly. In term of policies of FDI to make the farm owner or the agricultures' landowner understand the impacts of selling their own lands to FDI in long term which can effect to the economic growth and GDP in the country. In addition, the government should mention the improvement of the local agricultures' landowner about the strategies of trading, to protect and prevent the lands from FDI.
