Factors influencing the Sustainability of the Palm Oil Community enterprises in the Southern Region of Thailand

Abstract

The palm oil industry plays a very important role in the Thai economy, but it still suffers from certain problems including production-related issues of farmers, volatility and slump in product prices. The industry is also affected by the EU's renewable energy support laws. The objectives of this research were to: 1) study the levels of factors influencing sustainability in the oil palm industry operations of community enterprises in the Southern region; 2) examine the influences of government support, supply chain management, competitive advantages and operations of entrepreneurs on the sustainability in the palm oil community enterprises in the Southern region; and 3) propose guidelines for achieving sustainability in the oil palm community enterprises in the Southern region. This research employed a mixed research methodology combining quantitative and qualitative methods. For the quantitative research part, the research sample consisted of 340 entrepreneurs in the palm oil industry. The sample size was determined based on the criterion of 20 times the 17 observed variables. They were selected via stratified sampling. Data were collected with the use of a questionnaire and analyzed with a structural equation model. As for the qualitative research component, in-depth interviews were conducted with 15 key informants consist of executives or representatives from public and private sectors. Data were analyzed with content analysis. The findings showed that: 1) government support, supply chain management, competitive advantages, operations of entrepreneurs, and sustainability in the oil palm industry operations were rated at a high level; 2) competitive advantages had the highest influence on the sustainability in the oil palm community enterprises in the Southern region, followed by supply chain management, government support, and operations of entrepreneurs, respectively; and 3) the guidelines for achieving sustainability in the oil palm industry operations of small and medium enterprises in the Southern region must arise from participation of both public and private sectors. In addition, entrepreneurs in the oil palm industry must concentrate on improving the efficiency of the oil palm industry in order to be certified based on the Roundtable on Sustainable Palm Oil (RSPO), the recognized international standards, so that the operations will cover the dimensions of sustainability in economic, social, and environmental aspects. Setting the price mechanism promote palm oil as an alternative energy source environment friendly for a better quality of life. The Ministry of Agriculture and Cooperatives and the National Oil Palm Policy Committee can utilize these research findings as the guidelines in determining policies and plans for the oil palm industry development appropriately.