One Tambon One Product (OTOP) to promote grassroots economy in Thailand

Highlight
The One Tambon One Product (OTOP) programme was launched in 2001 as a measure to strengthen the communities to improve the well-being of the people by producing or managing locally available resources including local wisdom into quality products. While the producers who were prospective or already producing good products could utilize the opportunities given well, those in the rural areas with less business knowledge and experiences were struggling. The total number of OTOP Product Champions (OPC) was also decreasing, and the grassroots economy was still not uplifted as much as anticipated.  

The OTOP programme has strengthened the measures targeted to the local people, including the establishment of economic service centres and OTOP Academy where community people and entrepreneurs can learn how to apply knowledge into practice and conduct business. Networks of the local people are promoted to bring in development efforts. Along with the opportunities of exhibitions and events, marketing channels are created by establishing display and sales outlets. In addition, linkages are formed between the OTOP producers with less marketing and distribution capacities and OTOP Traders who can act as an intermediary between the producers and consumers in the provincial and national markets. Community tourism has been integrated with OTOP in the OTOP Nawatwithi initiative. 

As of 2021, there are 93 414 OTOP producers registered, of which 51 787 (55.4%) are community-based occupational groups, 40 119 individuals (42.9%) and the rest (1.6%) are small and medium-scale enterprises (SMEs). The numbers of the OTOP producers and products are increasing again, and the product quality is improving as a whole.  In addition, community tourism is increasing the income of local people.  

Background 
The Government of Thailand launched the One Tambon One Product (OTOP) programme in 2001 by adopting the concept from the One Village One Product (OVOP) Movement which had originated in Oita prefecture, Japan. At the turn of the century, poverty reduction and recovery from the economic crisis were the major agenda of the government. Coming into operation in 2003, the OTOP programme aims to strengthen the communities to improve the well-being of the people by producing or managing locally available resources into quality products. It also encourages promotion and preservation of local culture, tradition and wisdom.  

Table 1. OTOP product types and OTOP Product Champion rating (OTOP Stars) 

Source: Compiled by FAO from OTOP data, Bureau of Promotion of Local Wisdom and Community Enterprises.

The products are categorized into five types. As of 2021, food items account for 38.2 percent out of 208 860 products. Along with beverage (5.0 percent) and herbal products (12.7 percent), 55.9 percent are agro-based products, while the share would be even higher as the other products such as textile and decorative items may be also using agricultural raw materials.  

However, in the early years, the focus tended to be more on quick wins. While the producers who were prospective or already producing good products could utilize the opportunities given well, those in the rural areas with less business knowledge and experiences were struggling. In 2004, among 26 497 products that were evaluated for OPC, almost 70 percent of the products were either 2-star (60.3 percent) or 1-star (9.5 percent). The situation was improved by 2009, with the share of 2-star and 1-star products decreased to 37.4 percent. However, the total number of OPC was also decreasing, and the grassroots economy was still not uplifted as much as anticipated.   

Problem statement/Key issues 
To achieve inclusive growth of the national economy, grassroots economy needs to be promoted by utilizing and preserving local wisdom.  

Solutions 
Strengthen the OTOP programme with measures to capacitate rural people and support their business activities.   

Key initiatives/process 
The Department of Community Development of the Ministry of Interior, which is coordinating the OTOP programme, established economic service centres at the district level. It is an operation centre to support local individuals, occupational groups and entrepreneurs who are interested in or have begun businesses based on local wisdom. To date, 878 centres have been established across the country. In addition, knowledge networks at the community level are promoted to drive development by involving various stakeholders including the public and private sectors as well as educational institutions.  

OTOP Academy is intended to enable the OTOP producers to learn and develop products in a holistic manner. Open to all people, the Academy provides opportunities to the people to learn from successful producers and experts how to apply knowledge into practice and how to produce items to be of high quality and standards to meet customer expectations. So far, OTOP Academy is operated at seven locations, focusing on different products. For example, the ones in Saraburi and Phra Nakhon Si Ayutthaya provinces are concentrating on food processing, while the one in Khon Kaen province is on fabrics and apparel and the other schools deal with a mix of product types. The resource persons include those excelled in product standards and quality control, product development, processing, packaging and branding, marketing including digital marketing, product photography, among others.  

Marketing and promotion activities are implemented extensively under the OTOP programme. To assist the producers with 1 to 3 stars who are yet able to compete internationally and short of marketing and distribution capacity, “OTOP Traders” are identified and registered. OTOP Traders are business entities with marketing functions, acting as an intermediary between the producers and consumers in the provincial and national markets. The regulations issued in 2018 ensure that OTOP Traders do not produce products that compete with the OTOP producers. They are also expected to provide advice to the producers from the perspective of buyers.  

Display and sales outlets are established at different levels, so far at 61 locations in 19 provinces. For example, there are local shops, restaurants and organizations which carry OTOP products, while OTOP shops are made at private or public venues including airports. Exhibition and distribution centres are also established. In addition, public markets are utilized for local sale of OTOP products. Participation in fairs is supported for the producers with 3 to 5 stars under the OTOP To the Town project.  

Exhibitions and events are organized at local, provincial and national levels periodically. For example, the OTOP Midyear event is organized since 2003. In 2019, 2 810 OTOP groups/individuals participated in the midyear event, receiving 375 234 people and making sales and orders exceeding THB 1.1 billion (USD 37 million). Similarly, the OTOP City event, also started in 2003, was participated by 459 034 OTOP groups/individuals in 2019 and visited by more than 1.2 billion people, generating sales and orders exceeding THB 1.5 billion (USD 48 million). The OTOP exhibition is also organized in the neighbouring countries. Moreover, online marketing is expanding sales channels through the OTOPTODAY website (https://www.otoptoday.com/) and those operated by the private businesses.   

One of the characteristics of the OTOP programme in Thailand is the linkage with tourism. Tourism can effectively attract outsiders to experience the charm of the villages, leading to income generation of local people. Initially, the OTOP Village Champion (OVC) initiative, which began in 2006, was mainly supporting relatively large-scale tourism destinations. Now with the OTOP Nawatwithi project which began in 2018, community tourism requiring much less investment than OVC is promoted. There are more than 3 200 OTOP Nawatwithi villages. In addition, authentic Thai food products have been identified under OTOP Nawatwithi.  

OTOP tourism villages are categorized into four types, by using three criteria of (1) potential to attract tourists (50 percent), (2) availability of communities and facilities (30 percent), and (3) products and services (20 percent): 

• Star tourism community (“Attractive”), which is ready to accommodate tourists; 
• Brighten star tourism community (“Brighten Star”), which is promising to become category A; 
• Outstanding community in specific fields (“Case Study”), which can be the destinations of study visits; and
• Community OTOP (“Delivery Products”), which is limited in potential for tourism but able to supply 1 to 3-star OTOP products.  

As of May 2021, 3 628 villages have been evaluated as 214 villages in category A, 718 in category B, 1 456 in category C and 1 240 in category D.   

Impact 
As of 2021, there are 93 414 OTOP producers registered, of which 51 787 (55.4%) are community-based occupational groups, 40 119 individuals (42.9%) and the rest (1.6%) are small and medium-scale enterprises (SMEs).  

In 2019, 11 824 OTOP operators participated in the selection for OPC. Out of 19 560 products, 3 742 products were classified as 5-star, 8 017 as 4-star, 5 252 as 3-star, 1 688 as 2-star and 861 as 1-star products. The total number of OPC was decreasing from 2004 until 2012; however, the trend has reversed since then. What is more important is that the share of the OPCs in higher quality is increasing each time, as show in Figure 1.  

 Figure 1. Share of OTOP Product Champion products by rating 

Source: Compiled by FAO from OTOP data, Bureau of Promotion of Local Wisdom and Community Enterprises. 

The OTOP programme has successfully accelerated sales volume in the second half of the 2010s. The amount reached USD 8.6 billion in 2019, before the pandemic hit the business activities.   

Figure 2. Annual sales of OTOP products 

Source: Compiled by FAO from the presentation by Department of Community Development. https://www.fao.org/3/cb5640en/cb5640en.pdf

Also, according to a study conducted in 41 communities in Mahasarakham province, at the end of the fiscal year 2019, the number of tourists visiting these communities increased from 3 240 in the fiscal year 2018 to 19 798 in the following year (Sankote and Kamnuansilpa, 2020). In addition, the aggregated annual income of four types of business operators (OTOP product vendors, food vendors, lodging owners and tour services) increased from THB 13 million to THB 22 million on average, which was approximately THB 537 000 per community.  

Good practices/lessons 
The OTOP programme in Thailand is characterized with the strong government leadership of the Prime Minister. It has effectively engaged various public institutions to address different aspects which influence businesses throughout product value chain. The programme is managed by the National OTOP Board which is headed by the Deputy Prime Minister and oversees eight subcommittees in charge of administration, production, marketing, standards and product quality, regional matters, among others. At least 22 agencies from ten ministries are mobilized to implement the OTOP programme.  

The programme has effectively utilized existing social capital, by encouraging local people to identify and apply local wisdom and other resources with creativity. The programme is open to all people, and those interested in OTOP are able to utilize the opportunities and measures developed, arranged and consolidated under OTOP. Such measures include capacity building support at the district level and marketing support for the OTOP producers with marketing capabilities. In a nutshell, Three OVOP principles are implemented in harmony with each other.  

Integration of product development with community tourism promotion has a good possibility to accelerate income growth of the producers and community people.  

The Bureau of Promotion of Local Wisdom and Community Enterprises within the Department of Community Development, Ministry of Interior, has compiled data related to the OTOP programme and made them available openly. It ensures transparency of policy measures and assists communication to the general public. Data collection and disclosure are conducted systematically.  

Key resources 
Bureau of Promotion of Local Wisdom and Community Enterprises, the Department of Community Development, Ministry of Interior 
https://cep.cdd.go.th/ 

OTOP data (Thai) https://cep.cdd.go.th/otop-data/%e0%b8%a0%e0%b8%b2%e0%b8%9e%e0%b8%a3%e0%b8%a7%e0%b8%a1-otop 

The Story of One Tambon One Product: OTOP in Thailand (Presentation) 
https://www.fao.org/3/cb5640en/cb5640en.pdf 

Sankote, P., & Kamnuansilpa, P. (2020). Performance of the OTOP Nawatwithi tourism community project, Mahasarakham province. Journal of Graduate MCU KhonKaen Campus, 7(4), 299–310.
https://so02.tci-thaijo.org/index.php/jg-mcukk/article/view/245462 

For more information 
Responsible ministry/institution:  
Department of Community Development, Ministry of Interior