Opportunities and Challenges of Community Currency Systems:

The Case of Bia Kud Chum

Wanlop Pichpongsa

Pornpita Khlangpukhiaw

Thai Community Currency Systems Project (TCCS)

Local Development Institute (LDI)

Thailand

February 2002

This paper is prepared for the consultation meeting on “Alternative Economic Systems in Asia: Challenges for Community Currency Systems”, to be held in Bangkok, Thailand, on 20-22 February 2002.

Contents

Chapter 1: Introduction

What is a Community Currency System? 1

Chapter 2: Experience of Bia Kud Chum

Study, development and promotion of CCS in Thailand 3

Background of the community 5

Alternative and community initiatives 6

Looking back, and Turning to the Future:

15 Years of Community Development in Kud Chum 9

Establishing Bia Kud Chum 10

Bia Kud Chum … against the law? A threat to national security!!! 13

Implementation of Bia Kud Chum 14

Impact of implementation of Bia activities 18

Limitation encountered after the Bia system started operation 18

Reaction from outsiders and impact 18

Chapter 3: Lessons and Applicability

Lessons learned from the experience of CCS in Thailand 20

Lessons learned for applicability to other sites 20

Policy recommendation 22

Framework of CCS promotion 22

Are there any other alternative systems that can better address

the problems and concerns in Kud Chum? 25

Chapter 4: Conclusion

CCS as a tool for community development 26

To establish a new CCS 26

To promote CCS 27

Recommendation for further research 27

References 28

List of Tables

Table 2.1: Changes in Kud Chum in the past 15 years 9

Table 2.2: Number of households and the population of villages

where Bia system is operated 10

Table 2.3: Number of members of Bia system (as of January 2002) 13

List of Pictures

Picture 2.1: Map of Thailand 5

Picture 2.2: Area of Bia Kud Chum 11

Picture 2.3: 1 Bia Note (front and back) 13

Picture 2.4: Outflow of Money from Santisuk Village 15

Picture 2.5: Prevention of the Outflow of Money 16

Picture 3.1: Framework of CCS Promotion 24

Summary

This paper aims to review the experiences of the Community Currency Systems (CCS) movement in Thailand. It focuses on the case of Bia Kud Chum, a CCS that was implemented in Kud Chum district, Yasothon province. It draws lessons learned from the experiences of implementation of Bia Kud Chum, and also proposes policy recommendations.

It can be said that the starting point of the CCS movement in Thailand is the emergence of the Thai Community Currency Systems Project (TCCS) in December 1997. TCCS basically aimed to introduce CCS as a tool for community development and to support the foundation of CCS in Thailand. The implementation of TCCS can be divided into 4 phases:

First was thestudy of international cases of CCS, in order to learn lessons from those CCS experiences.

Second was the introduction of the CCS concept and target community selection. Three workshops were held to introduce the CCS concept in the South, the Northeast, and the North. Thereafter, TCCS was contacted by the people of Kud Chum district, Yasothon province, who stated that they were interested in establishing a CCS in their community. As a result of a survey conducted by TCCS staff, it was found that Kud Chum had the suitable conditions to set up CCS, including years of experiences in various self-reliance initiatives, strong community leaders, strong people organisations, and fairly diversified local production. Therefore, CCS was established in Kud Chum.

Third involved establishing a community currency system. TCCS staff began work with the villagers and development workers in the community to establish the CCS. The working committee was formed to design the CCS, including identifying objectives, naming the system, drafting member agreements, and setting regulations for managing the system. The system later became know as “Bia Kud Chum”.

Fourth included monitoring, evaluation and dissemination of the CCS experience. The implementation of this phase is not yet complete as the Bia Kud Chum is currently faced with the legal problems.

To understand why a CCS was set up in Kud Chum, one has to look at the history of community development in Kud Chum. In the 1980s, the villagers in Naso sub-district, Kud Chum district, began their alternative initiatives in order to solve their problems. These initiatives consisted of a Community Convenience Store, a Village Medicine Fund, the Association of Traditional Medical Practitioners and Herbalists of Kud Chum, the Development Volunteer Group of Buddhist Monks, alternative agriculture, a Community Forest Preservation Project, an Herbal Medicine Center at Ta Laad Temple, Rice Mill of Nature Care Society, small production groups, and the Hed Yoo Hed Gin (self-sufficiency) Group. Each step of community development the people of Kud Chum have taken has resulted from an evaluation of past experiences and lessons learned. The community development process in Kud Chum started with community business; i.e. the community convenience store. To deal with health problems, the village medicine fund was set up. However, it was found to cause a misuse of medicine. Hence, the role of traditional medical practitioners and the use of herbs have been revived and promoted through the Association of Traditional Medical Practitioners and Herbalists of Kud Chum, which led to the foundation of Herbal Medicine Center in Ta Laad village later on. Then, villagers realised that the use of herbal medicine to cure their sickness was not addressing the root of the problem. It was determined that the cause of sickness came from unsafe food. Therefore, they began to grow chemical-free rice for their own consumption. Then, they expanded the application of organic farming to other crops such as vegetables and fruits. The community rice mill was established so that villagers could cope with their problems, one of them being that they were cheated by paddy traders and rice millers. At the same time, there was demand for chemical-free rice from Bangkok, and setting up a community rice mill served this requirement of processing chemical-free paddy. Moreover, the Rice Mill of Nature Care Society also had a significant role in promoting organic farming in the community. Hed Yoo Hed Gin Group was formed to expand self-reliant initiatives to other spheres. Hed Yoo Hed Gin had sparked interest in non-monetary exchange within the community. After this process, the community of Kud Chum decided they would like to take the next step, and initiate their local exchange through CCS, Bia Kud Chum.

Bia Kud Chum was established in 5 villages: Santisuk, Sok Khum Poon, Ta Laad, Kud Hin and Kok Klang. A total of 14 people from these 5 villages formed a working committee to set up CCS. The working committee selected a note-based system as it was considered most appropriate for the community members who are not familiar with accounting practices. “Bia” was chosen to be a name of the system. In the Northeastern language, “bia” means seedling, which reflects the group’s desire that the community develop into a strong, thriving community like small seedlings growing into large trees. With regards to management of the system, group members have a credit limit of 500 bia, which they can withdraw from the “Bia Bank”. Bia cannot be exchanged for baht and there is no interest charged on either bia withdrawn or on bia deposited into a members account. Exchanging goods and services in the participating villages can be done in several ways; using bia only, using bia together with baht or using baht only depending on what the buyer and seller agree upon.

The community started to use the bia for the first time in March 2000. Its use attracted much attention from the mass media and government agencies. Some feared the use of bia might violate the law or could be a danger to national security. Some even suggested it might be seen as a strategy to create an independent state. Due to the attention mentioned above, and under the direction of the Bank of Thailand, the use of the Bia was suspended at the end of April, after only one month in circulation.

In July 2000, at a meeting of the Board of the Bank of Thailand, it was finally concluded that the use of Bia Kud Chum violated Article 9 of the Currency Act of 1958. This article ‘forbids anyone from making, distributing, using or issuing any material to replace currency, except where permission has been granted by the Minister of Finance’. In addition, the Bia bank was said to violate Article 9 of the Commercial Banking Act of 1962, which ‘forbids individuals other than commercial banks from using the word ‘bank’ or other words with the same meaning’. As a result, the Bia Kud Chum working committee decided to change the name of the system from ‘Bia Bank’ to the ‘Self-reliant Community Development Group’. In July 2001, the Ministry of Finance (MoF) announced that they agreed with the BoT that Bia violated the law and should not be allowed.

Although Bia was used for only about 4 weeks, other core activities have been implemented, for example, a resource flow analysis workshop, a community market, a study tour, and occupational training. Consequently, some benefits to the community have occurred. Local production and its diversification have been boosted as the villagers are encouraged to produce goods to trade at the community market. The above activities provide a forum for community interaction, cooperation and socialisation. As a result, social bonds are strengthened, and the villagers have learned about their village economy. This process has strengthened the role of women in community development as can be seen from the women in different villages actively forming production groups.

From the experiences of Bia Kud Chum, the conditions needed for a successful CCS can be concluded as follows:

· CCS is regarded by community members as a tool to solve their problems.

· CCS has to fit into local context.

· Community members accept the idea of CCS and understand CCS concept.

· Community leaders understand and support CCS. The support of a spiritual leader within the community can also be critical. In the case of Bia Kud Chum, Prakru Suphajarawat, the abbot of Ta Ladd Temple, has played an essential role in supporting the Bia.

· A variety of goods and services are offered to trade.

· CCS has good management and transparency.

· Working committee and members trust each other in terms of system management and trading.

· Implementation of CCS has to be within the framework of the law.

· CCS receives good cooperation from government and private sectors.

· CCS employs a participatory approach to implement its activities. For example, members participate in designing the regulations of the system and workplan.

· CCS needs to have a monitoring mechanism to assess the outcome of its operation and to ensure constant improvement.

In addition, the experiences of Bia Kud Chum also provide a lesson for the foundation of a new CCS. Three factors are required to be taken into consideration:

· legal issues and attitudes of government,

· clarification of doubts and concerns about CCS,

· and the mass media.

It is evident that government agencies are quite sensitive to CCS, where the CCS is regarded as a currency that competes with the national currency. The appearance and shape of the notes, which are similar to the notes of national currency, have caused skepticism within government. Therefore, note-based systems draw more attention and skepticism from the government, compared to the LETS system. In addition, it is important to clarify doubts and concerns that may be raised by the public and government agencies, thus decreasing the opposition against CCS. The mass media is another essential factor for CCS in terms of promotion to the public. However, untimely news reports and distortion can negatively influence the public, as occurred in the case of Bia Kud Chum. Inaccurate reporting drew too much attention from government agencies and created a negative impression of Bia among the public and government agencies.

The paper suggests that the framework of CCS promotion consist of three elements: study and research, implementation, and dissemination of information. Study and research play a role in drawing lessons and building up knowledge regarding CCS, which will be utilised in implementation and dissemination to the public. The study can be conducted in different stages. Before establishing CCS, the study is conducted to review experiences of other CCS projects in order to utilise the findings of the study in the planning stage. After CCS starts its operation, the research is conducted to draw lessons, evaluate the impact of CCS on the community, and propose policy recommendations. Regarding implementation, this element applies knowledge and the research findings into practice. A pilot project should be used as a trial-run, and depending on the results of the pilot project, expansion of CCS in to other communities should be considered. When a number of CCS are set up, in order to strengthen the work of these CCS, a proper network has to be built up. The network can link these group together at different levels, such as at the national, regional, and global levels. With regards to dissemination, the information derived from research findings, and the lessons learned from the experiences of CCS implementation have to be disseminated to the public and international organisations. Feedback and comments received should be used to improve research and implementation.

Chapter 1: Introduction

Thailand’s financial crisis in 1997, which later developed into an economic crisis, has had adverse impacts on various sectors of Thai society, especially financial institutions and business. As a consequence, a large number of employees in financial or industrial sectors were laid off. Among those laid off were factory workers who came from rural villages. Even though rural villages and the agricultural sector were expected to buffer the impact of unemployment, the rural sector has also suffered from the crisis. As members of the family who migrated to work in those sectors were laid off, money that used to be sent home has disappeared. That means a decrease in an inflow of money to the rural sector. At the same time, the outflow of money from rural villages has increased while Baht devaluation has also caused an increase in prices of commodities which are imported, such as petrol and chemical fertilisers. The crisis of 1997 is not the only impact on the rural sector. In fact, the development strategy of the country in the past four decades, focusing on export promotion and industrialisation, has resulted in resources being sucked out of rural areas to sacrifice for the development of the country.

In Thailand there are many sectors which share the same concepts of building up the capability of self-reliance in the community. The government sector, as well as the private sector and NGOs have supported the concepts of community economy, sufficiency economy, as well as strong community, in order to build up the strength in the communities with regards to human, social, culture, local wisdom, economic, and natural resources spheres. Setting up an exchange system in a community became one of the benchmarks in supporting self-reliance in a community. This is because such a system creates the circulation of capital and resources within the community, and reduces the outflow of resources from the community. Furthermore, it stimulates production that serves a local demand. A tool for creating exchange system, therefore, is required.

What is a Community Currency System?

Community Currency is a medium of exchange which is created by the community. Generally, it has three main characteristics:

· It can be used only in the community where it is created.

· It bears no interest.

· It can be used together with the national currency.

In general, Community Currency System (CCS) can be divided into four categories:

1. LETS, a mutual credit system, standing for “Local Employment and Trading Systems”;

2. HOURS, which employs notes as a medium of exchange;

3. Hybrid or mixed systems, which combine various elements of LETS and HOURS system; and

4. Time Dollars, an exchange of hours of work among members.

CCS can assist to increase self-reliance of rural communities in a number of ways. First, a CCS encourages local trading and exchange among community members, as they can be used only within the community. This leads to more circulation of resources within the community allowing wealth to stay in the community, rather than an outflow of local resources out of the community in order to earn the national currency. In addition, materials, resources, skills, labour and time may be available in the community, but with a scarce national currency, the community members are not able to generate economic activities and exchange. CCS as a medium of exchange can alleviate the problem of scarcity of national currency (a medium of exchange) in the community; hence enabling local trading and exchange. Second, CCS can lead to communities become less dependent on external sources of loans which bear interest. Third, as far as knowledge is concerned, CCS can be a tool to create learning process for the community members; i.e. increasing understanding of their own local economy and of the linkage between the local and external economy. Fourth, the operation of CCS can strengthen the social bond and mutual support within the community.

This paper is written from the experiences of CCS promotion in Thailand by the Thai Community Currency Systems Project (TCCS), as well as from the field work experiences of the authors that worked with the villagers in Kud Chum district, Yasothon province. The paper aims to review the experience of Bia Kud Chum, a CCS in Thailand. In addition, it draws lessons learned, and proposes policy recommendations. Chapter 2 explores promotion and implementation of CCS in Thailand. It looks at the case of Bia Kud Chum, located in the northeast of Thailand. The background of the community in Kud Chum is very interesting in terms of their effort to achieve self-reliance. After a year of preparation, Bia Kud Chum was launched in March 2000. Since then, it has encountered a large obstacle, that being a row of legal problems. As a result, the use of Bia has stopped when the system operated for about a month. Despite the short time of the use of the bia, other core activities of the system continue. The outcome is fairly evident. Lessons learned from experience of CCS in Thailand are pointed out in Chapter 3. Furthermore, suggestions for applicability to other sites are discussed. Policy recommendation for CCS promotion is also presented in Chapter 3. Then, Chapter 4 concludes findings and policy recommendation for further promotion of CCS.

Chapter 2: Experience of Bia Kud Chum

This chapter explores how the movement of CCS in Thailand and the first pilot project of CCS in Thailand, Bia Kud Chum, started. In order to understand why CCS was established in Kud Chum, it requires one to trace the history of community development in Kud Chum. This chapter looks at the motivation which has pushed villagers to practise CCS. In addition, it explains the process of designing the Bia system and how it works. It also discusses the operation of Bia Kud Chum and its impact on the community. Lastly, the obstacles of implementation are touched upon.

Study, development and promotion of CCS in Thailand

The project concerning CCS in Thailand first started in December 1997, known as the Thai Community Currency Systems Project (TCCS). TCCS was a joint effort of Local Development Institute (LDI), CUSO Thailand (Canadian volunteer organisation), Volunteer Service Overseas (VSO) Thailand, and Focus on the Global South. TCCS has received cooperation from many NGOs such as Thai Volunteer Service (TVS), Rural Reconstruction Alumni and Friends Association (RRAFA), Spirit Education Movement (SEM), Thai Holistic Health Foundation, Thai Development Support Committee (TDSC), Thai-Inter Religious Commission for Development, and Children Development Foundation.

The objectives of the project, when it first started, were as such:

· To study alternative economic systems in both the Thai and international context, which focus on the economic self-reliance of communities.

· To facilitate information sharing between Thai non-governmental and people’s organisations and their international counterparts, on the role of community currency systems in development.

· To develop and evaluate a community currency system in Thailand which builds upon both the experience of Thai NGOs in community development, and international organisations in community currency systems.

· To disseminate findings with the aim of exploring the potential for a broader application of community currencies in Thailand and in other South East Asian countries.

The implementation of the project can be divided into 4 main phases:

Phase I: Study of international cases and alternative economic initiatives in Thailand

Between January and March 1998, a study of CCS in North America and Europe was conducted. It looked at the basic concept, objectives, implementation, as well as strengths and weaknesses. Out of this study, a report was released, titled “A Snapshot of Community Currency Systems in Europe and North America”2, written by Jeff Powell and Menno Salverda. Furthermore, TCCS explored alternative economic initiatives in Thailand, particularly in the South and the Northeast of Thailand, for example, Savings Groups, Credit Union Groups, Muslim Bank, Labour Sharing (Long Kaek), and Asoke Community (Buddhist self-reliant community). The study led to a clearer understanding of CCS with regards to international experiences and economic alternatives in Thailand. Therefore, the project implementers could see how CCS would be suited to Thai society and the context of alternative development in Thailand, and devise the proper strategy to introduce the idea of CCS in Thailand.

Phase II: Introduction of CCS concept and target community selection

TCCS organised three CCS workshops in the South (August 1998 in Songkla province), the Northeast (September 1998 in Surin province), and the North (October 1999 in Chiang Mai province), respectively. To organise the workshops, TCCS cooperated with NGOs based in those areas or local academic institutes. The participants consisted of academics, development practitioners, and community leaders. The workshops aimed to increase the understanding of external impact on the community, the inflow and outflow of money and resources, and to introduce the CCS concept and its operation. After the workshops, the participants brought the idea to discuss with their community members. As a result, villagers from Kud Chum district, Yasothon province had an interest in setting up CCS in their community. TCCS staff conducted a survey and had a discussion with the community leaders in Kud Chum. It was found that Kud Chum had factors which were appropriate to set up CCS. First, the community in Kud Chum had years of experience of various self-reliant initiatives. Second, it had strong community leaders and strong people organisations. And third, the community had considerably diversified local production such as a rice mill, women groups producing soya milk, herbal shampoo, and dishwashing liquid, herbal medicine production, and so on. Therefore, TCCS agreed to support the community to set up CCS in Kud Chum.

With regards to the introduction of the CCS concept, TCCS has continuously introduced the concept of CCS to Thai society. TCCS staff have been invited to make presentations and conduct workshops in order to introduce the concept of CCS and its operation by NGOs, People Organsiations (POs), academic and research institutes, and civil society groups. Groups that TCCS has worked with to promote CCS include the Assembly of the Poor, National Institute of Development Administration (NIDA), Research Development Institute (RDI) of Khon Kaen University, Bank for Agriculture and Agricultural Cooperatives (BAAC) of Yasothon, and so on. Moreover, another mechanism for disseminating the CCS concept is through the following website: http//ccdev.lets.net

Phase III: Establishing Community Currency System

After it was agreed between community leaders and TCCS to establish CCS in Kud Chum, TCCS staff began to station themselves in the community and learn development initiatives and the culture of the community. Several meetings were held in villages in order to introduce the concept of CCS and its operation to villagers and to scout villagers who were interested in joining the committee to set up CCS. Finally, it was concluded that CCS would cover 5 villages, and a total of 14 representatives from 5 villages formed a working committee which had tasks to design CCS: identify objectives, name the system, draft member agreement and set regulations for managing the system. This system later became known as “Bia Kud Chum”.

Phase IV: Monitoring, Evaluation and Dissemination of CCS experience

TCCS had planned to conduct monitoring and evaluation of the system after it was launched in March 2000. It aimed to find out the result of implementation of CCS in terms of strengths, weaknesses and pitfalls. Then, the result would be utilised to improve CCS. Furthermore, it would assist in further planning of local production which serves the demand of the community and utilises local resources. In this phase, it was planned to disseminate experience of CCS in Kud Chum to the Thai public and to international organisations working with CCS. In addition, TCCS looked for a possibility to establish a new CCS if any other communities were interested.

As it stands now, implementation of Phase IV cannot be fully conducted as CCS in Kud Chum encountered legal problem four weeks into its launch. The details will be discussed later in this chapter.

Background of the community

Naso sub-district, Kud Chum district, Yasothon province is located in Northeast of Thailand, about 600 kilometers from Bangkok (Picture 2.1).

Picture 2.1: Map of Thailand

The community of Naso was first settled about 100 years ago. The lives of people were simple and self-sufficient. The natural resources were abundant. Their livelihoods, to a large extent, depended on nature. Jeff Powell (2000) describes the lives of people in Naso:

“Up until the 1950s, outside influence was almost unknown in Naso. Self-reliance was practised in economic, social, political and spiritual spheres. Villagers grew rice, fruit and vegetables, raised livestock, caught fish and forage, wove their own clothing and built their own houses. Hard work and cooperation were essential. Villagers rose at 4 a.m. to begin milling rice for the day by hand, before heading out to the fields or forests to gather food.”

Thailand introduced the First National Development Plan in 1961, which aimed to industrialise the country. The Plan affected communities all over the country, including Naso. Since 1961, money has increased in importance to the people in Naso. They began to trade by using money (Kanoksak Kaewthep, 2001). The liberalisation of markets had led to community members becoming more and more dependent on externally set prices for rice, their main production crop. The villagers had entered a vicious cycle of debt, lost their community forests and indigenous knowledge, particularly in areas such as herbal medicines, and as a result faced things such as health problems and an exodus of village youth to Bangkok in search of work.

In the 1980s, the villagers in Naso began to solve the problems they were facing. As a result, a variety of alternative initiatives have been practised.

Alternative and community initiatives

Various villages in Kud Chum district and nearby districts have over 20 years experience in trying to alleviate the problems of debt and achieve self-reliance. Their efforts have led to the formation of many active community organizations which focus on different issues including economy, environment, culture, religion, and health. The alternatives and initiatives of the villagers are listed below:

Community Convenience Store

In 1980, villagers and community leaders of Sok Khum Poon village formed the group and shared the revolving fund to establish a community convenience store where daily-use commodities were sold in the village. The store was run by villagers. At the end of the year, dividends were distributed to the members. It can be considered that this is the starting point of operating community business. Thereafter, the idea of a community convenience store has been adopted and practised in other villages.

As a number of community convenient stores had been founded, in 1998 there was an idea to establish a Community Convenience Store Network Center. The Center aims to be a wholesaler to distribute goods produced locally and from external markets, and to be a center that provides consulting services in management and accounting matters. Therefore, in 1999 the Community Convenient Store Network Center was established through the cooperation of 48 community convenience stores in Kud Chum and Sai Moon district, operating as shareholders.

Village Medicine Fund

In 1982, with support from a health worker of a district hospital of Kud Chum named Chujira Mitdhrawong, the villagers of Sok Khum Poon set up a village medicine fund to which each person contributed 10 baht. The initial fund balance was about 1,200 baht. The reason for setting up the village medicine fund was that villagers had difficulties accessing medical care. In those days, travelling to the district hospital in Kud Chum was very difficult due to the poor condition of the roads. After the fund was set up, basic medicines were purchased to sell to villagers. As a result of the availability of medicine in the village, it was found that villagers abused it. They bought unnecessary medicine. Caused by lack of understanding, they took the wrong medicines, which consequently led to allergies and side effects. In addition, medicine was expensive when compared to their earnings. As a result of these problems, people began to doubt whether or not the village medicine fund was beneficial to the villagers and solved their problem. The lesson learned from the village medicine fund led to a revival and promotion of the role of traditional medical practitioners in providing health care services to villagers.

Association of Traditional Medical Practitioners and Herbalists of Kud Chum

A health worker of a district hospital of Kud Chum, Chujira Mitdhrawong, coordinated with local teachers, traditional medical practitioners and people who were interested in this issue to found the Association of Traditional Medical Practitioners and Herbalists of Kud Chum. The Association was founded on 12 March 1983. It aimed to revive the role of traditional medical practitioners and promote the use of herbs in medical care. This would promote self-reliance in the health care of villagers by utilising local wisdom and local resources; i.e. herbs. The Association received support from an NGO called Herbs for Self-reliance Project and a government agency, the Thai Traditional Medical Institute. Almost 70% of the members were from Naso sub-district and became core members who actively worked for the Association. The activities of the Association consisted of:

· providing of knowledge on herbs,

· promoting the use of herbs,

· encouraging herbal growing in villages,

· organising study tours to exchange knowledge with other traditional medical practitioners and herbalists in other areas, and

· holding training on herbs for Buddhist monks in Kud Chum

The outcome of the promotion of the use of herbs was fairly successful. For example, in Sok Khum Poon village, villagers have reduced the use of modern medicine and replaced it with herbs. In 1982, expenditure on modern medicine within the village was at 12,000 baht, whereas it was at less than 3,000 baht in 1986.

Development Volunteer Group of Buddhist Monks

In February 1984, the district hospital of Kud Chum held training on “Herbs and Primary Health Care” for Buddhist monks from Kud Chum and surrounding districts. This training created momentum in the role of Buddhist monks in community development. It was the starting point of Buddhist monks getting more involved in community development. For example, many monks brought herbs to grow and breed in their temples. Some temples established herbal centers which have played an important role in traditional health care of the community. In 1991, monks who were active in community development activities formed a group called “Sangka Asa Pattana” (Development Volunteer Group of Buddhist Monks).

Alternative Agriculture

Apart from the revival and promotion of traditional and herbal medicine, in 1986 villagers wanted to expand their self-reliance inititatives into other aspects, particularly the economic aspect. Moreover, they had learned that health problems were still persisting, even though both herbal and modern medicines were available in the community. One of the main causes was thought to be the consumption of chemical-contaminated food. It was found that the use of chemical inputs in their farms was common. Therefore, some of the villagers began to adopt alternative agriculture such as organic and chemical-free farming, in order to produce rice which was safe for them and their families.

Community Forest Preservation Project

The Association of Traditional Medical Practitioners and Herbalists of Kud Chum played a leading role in promoting plant herbs and other plants in the common forest of 80 rai (12.8 hectare). The objective was to preserve this forest and build up a common consciousness of forest preservation. In 1990, this forest was announced as a preserved forest, knows as “Nong Kaen Preserved Forest”. It was under the protection of 11 villages of Naso sub-district. The forest preservation activity has expanded to other sub-districts. For example, in 1999, the Association of Traditional Medical Practitioners and Herbalists of Kud Chum bought the Dong Por forest of 21 rai (3.36 hectare), located in Suk Kasem village, Noan Pley sub-distict, to be a community preserved forest. Moreover, Sangka Asa Pattana Group (Development Volunteer Group of Buddhist Monks) has played a leading role in preserving the forest. The Group has cooperated with villagers to revive and preserve the forest in 7 villages.

Herbal Medicine Center at Ta Laad Temple

As a result of the foundation of the Association of Traditional Medical Practitioners and Herbalists of Kud Chum in 1983, traditional health care and the use of herbs had been revived and promoted in Kud Chum. In 1990 the Herbal Medicine Center was established at the Temple of Ta Laad village through the cooperation of the local community (Prakru Suphajarawat, the abbot of Ta Laad Temple, and villagers), and outsiders, consisting of the Public Health Office of Yasothon and Herbs for Self-reliance Project. The activities of the Center consisted of developing a pilot herbal garden, collecting and distributing herb varieties, herbal sauna service, producing herbal medicine, promoting herb growing as a supplementary source of income, and providing knowledge of herbs.

Community Rice Mill

The community rice mill was set up in 1991. It was named “Rice Mill of Nature Care Society”. The shares of the rice mill have been held by villagers in Kud Chum and Bangkok residents who would like to support the farmers to run their own rice mill. When the rice mill was first established, it received assistance from NGOs, Herbs for Self-reliance Project and Friends of Nature Society. The rice mill aims to promote organic agriculture and to produce organic rice. The rice mill can produce Thai Organic Jasmine Rice (Hom Mali Rice) to be exported to Europe. The benefits of operation of the rice mill are as follows:

Increase in villagers’ income. The farmers can sell their paddy at a better price when selling to the community rice mill. The farmers are not cheated by the middlemen.

Job creation. The rice mill has created more jobs in the community; i.e. villagers are employed to work for the rice mill.

Create learning process of running business to villagers.

Small Production Groups

In Naso and surrounding sub-districts, small production groups have been active in producing various goods to sell in local and external markets. For example, the women’s group of Santisuk village has produced soya milk and sold it to the community members since 1996. In 1999, they began to produce herbal shampoo and dishwashing liquid. The women’s group of Sok Khum Poon village has woven natural-colour cloth since 1996.

Hed Yoo Hed Gin Group

Through their experiences of practising organic agriculture, the villagers have not diversified plants in their farms. In some cases, they grow solely rice. This shows that the capacity for self-reliance of the villagers is still limited. Therefore, Hed Yoo Hed Gin (Self Sufficiency) Group was formed in June 1998, aiming to initiate self-reliant activities in economic, health, environmental, spiritual, cultural, educational, and political spheres. The Group consists of 15 households from 5 villages which are the same as the area of the Bia system. Hed Yoo Hed Gin focuses on the healthy production for household consumption first, selling only the surplus of their goods. They also promote the exchange of plant varieties, labour (long kaek), and tools amongst community members.

Looking Back, and Turning to the Future: 15 Years of Community Development in Kud Chum

Due to a long effort of development to achieve self-reliance, the seminar on “Looking Back, and Turning to the Future: 15 Years of Community Development in Kud Chum” was held on 4-5 September 1999 at Por Dang Agriculture Collage in Yasothon. The participants of the seminar consisted of representatives from 11 villages in Kud Chum and people from nearby districts, monks and local development workers. The seminar aimed to review and assess development experiences of Kud Chum, and to search for a future strategy.

After analysing the changes in the community in the past 15 years, positive and negative outcomes were found, as shown in Table 2.1.

Table 2.1 : Changes in Kud Chum in the past 15 years

Positive Outcomes

Negative Outcomes

Improvement of basic infrastructure and public services (e.g. roads, electricity, water supply, school, health center)

Availability of modern technology and equipment (e.g. agricultural tools, televisions, radios, automobiles, and motorcycles)

Development of people organisations

Increasing debts

Diminishing capability of self-reliance

Increased dependence on purchasing food

Deterioration of nature and environment, resulting from deforestation and use of chemical inputs, which have caused a reduction in sources of natural food

Increase in labour emigration

Villagers cooperate less within the community and are more selfish

Drug problems

Villagers are more tense

In the seminar, the participants pointed out the 4 most serious problems that they were facing now and may continue to face for the next 10 years. These problems include debts, environment, drugs, and conflict. After that, they analysed which group is most successful in solving the debt problem: Hed Yoo Hed Gin Group. This is because the activities of Hed Yoo Hed Gin focus on controlling expenses on daily consumption and reducing dependence on external market that they themselves have no control over. Furthermore, the participants suggested expanding its local exchange activity.

The outcome of the seminar shows that the villagers consider ‘local exchange’ as an effective mechanism in resolving their indebtedness which is considered as the most serious problem in the community. With the realisation that community currency systems could help facilitate the development of local exchange, CCS therefore was chosen by people in Kud Chum to strengthen their process of community development.

In sum, each step of community development the people of Kud Chum have taken has resulted from an evaluation of past experience and lessons learned. The community development process in Kud Chum started with community business; i.e. community convenience store. To deal with health problems, the village medicine fund was set up. However, it was found to cause misuse of medicine. Hence, the role of traditional medical practitioners and the use of herbs have been revived and promoted through the Association of Traditional Medical Practitioners and Herbalists of Kud Chum, which led to foundation of Herbal Medicine Center in Ta Laad village later on. Then, villagers realised that the use of herbal medicine to cure their sickness did not address the root of the problem. Instead, the cause of sickness came from unsafe food. Therefore, they began to grow chemical-free rice for their own consumption. Then, they expanded the application of organic farming to other crops such as vegetables and fruits. The community rice mill was established since villagers would like to cope with their rice problem. They were cheated by paddy traders and rice millers. At the same time, there was demand for chemical-free rice from Bangkok, and setting up a community rice mill served this requirement of processing chemical-free paddy. Moreover, the Rice Mill of Nature Care Society also had a significant role in promoting organic farming in the community. Hed Yoo Hed Gin Group was formed to expand self-reliant initiatives to other spheres. Hed Yoo Hed Gin has sparked an idea of non-monetary exchange within the community. After this process, the community of Kud Chum decided they would like to take the next step to initiate their local exchange through CCS, Bia Kud Chum.

Establishing Bia Kud Chum

In September 1998, representatives from Kud Chum attended a seminar on “Community Currency Systems and Self-reliance” held in Surin Province. The participants from Kud Chum brought the idea of CCS to discuss with their community members. Then, they contacted TCCS and showed their interest in having CCS in their community. TCCS staff therefore conducted a survey and had a discussion with the community leaders. It was found that Kud Chum had the proper capability to set up CCS. It was agreed that CCS would be estabished in 5 villages: Santisuk, Sok Khum Poon, Ta Laad, Kud Hin, and Kok Klang. These 5 villages have 537 households and a population of 2,700 (Table 2.2). The following are favourable factors for setting up CCS in these 5 villages:

· The community had over 20 years of experience in various self-reliant initiatives.

· It had strong and dedicated community leaders and strong people organisations.

· The community had considerably diversified local production such as a rice mill, women’s groups producing soya milk, herbal shampoo, and dishwashing liquid, herbal medicine production, and so on.

· The villagers demanded a new tool to deal with their current problems, particularly debt.

· These 5 villages are the area of operation for Hed Yoo Hed Gin Group, which shares the same idea of non-monetary exchange.

· Community leaders have accepted and supported the idea of CCS.

Table 2.2: Number of households and the population of villages where Bia system is operated

Villages	Sub-district	District	No. of households	No. of Population
Villages	Sub-district	District	No. of households	Male	Female	Total
Santisuk	Naso	Kud Chum	30	74	72	146
Sok Khum Poon	Naso	Kud Chum	97	288	294	582
Ta Laad	Naso	Kud Chum	59	154	151	305
Kud Hin	Kam Mad	Kud Chum	155	354	382	736
Kok Klang	Phai	Sai Moon	196	436	454	890
Total			537	1,306	1,353	2,659

With TCCS staff stationed in the community, a variety of activities concerning CCS were implemented as follows:

Introduction of CCS concept in the community

From March to August 1999, TCCS staff cooperated with development workers who had worked in the community to introduce the concept of CCS through meeting, informal discussion, and role play. Many groups in different villages participated, for example, community leaders, women groups, Hed Yoo Hed Gin Group, staff of the rice mill, staff of Herbal Medicine Center at Ta Laad village, youth groups, Buddhist monks, and community convenience stores.

Picture 2.2: Area of Bia Kud Chum

Designing CCS

After introducing the concept of CCS and its operation to villagers, a total of 14 people from 5 villages who were interested in CCS formed a working committee to set up CCS. A working committee had worked on the design of CCS, including identifying objectives, naming the system, drafting membership agreement, and setting regulations for managing the system. The details are as follows:

Objectives of Bia Kud Chum

Social

· To increase self-reliance in the community and to lower dependence on external markets

· To set up activities that increase diversity and sustainability

· To create good relationships between people in the community

Economic

· To reduce the outflow of money (Thai baht) and resources from the community

· To save community members’ money (baht)

Implementation Process

Selection of the system

A coupon system (or NOTES-based system) was considered most appropriate for the community when compared to other systems, particularly those based on accounting. As community members in Kud Chum are not very familiar with accounting practices, the coupon system was seen as more user friendly and easier to understand.

2. Why the name “Bia Kud Chum”?

From a wide variety of suggestions it was agreed that bia should be the name of the trade medium of the community currency system. In the Northeastern (Isan) language, ‘bia’ means ‘seedling’ and it reflects the communities’ aim to develop into a strong, thriving community like small seedlings growing into large trees.

The design of the bia notes

Community members produced poems and paintings illustrating the way of life and local customs and traditions of villagers in the northeast of Thailand. Schoolchildren joined in a competition, after which a selection of their work was made for the screening and printing of the bia notes.

Managing the bia system

The bia working committee performs three main functions

Accounting, which is carried out by elected managers of the ‘Community Self-Reliance Development Group’, formerly known as the Bia Bank. The managers facilitate the withdrawals and deposits of bia and administrate the bia member accounts.

Extension activities to support efficient and balanced use of bia between members

Monitoring and Evaluation of the use of bia.

The use of bia

Group members have a credit limit of 500 bia, which they can withdraw from the “Bia Bank”.

Bia cannot be exchanged for baht

There is no interest charged on either bia withdrawn or on bia deposited into a members account

Exchanging goods and services in the participating villages can be done in several ways; using bia only, using bia together with baht or using baht only depending on what the buyer and seller agree upon. For instance, to buy one bag of soya milk, they can pay 5 baht, 2 baht and 3 bia, or 5 bia.

Membership

Only members of the five mentioned villages are allowed to become members of the bia system.

Picture 2.3: 1 Bia Note (front and back)3

Translation of Poem

“We come together to build up a new society.

We start saving, and it will bring about happiness in the future.

Let’s grow lots of vegetables.

The surplus after consumption will be sold in our community.”

Activities were organised to support local exchange:

· A Community Market is held in three villages. Each village has a market day once a week; on every Friday, Saturday, and Sunday respectively.

· Additional skills training for community members takes place in order to support such things as the diversification of local production to meet local demand.

Bia Kud Chum … against the law? A threat to national security!!!

The community started to use the bia for the first time in March 2000. Its use attracted much attention from the mass media. However, distortion of news reports occurred. Thai Rath Newspaper reported the news of Bia Kud Chum in mid April 2000 that Bia Kud Chum had expanded to 5 districts. Moreover, it reported that a teacher who lived in another district expressed that this might be a sign to create an independent state. As a result, officials from district and provincial government offices, police, military, internal security, the Prime Minster’s Office and the Central Bank of Thailand were among those to visit the community to investigate the Bia system. Some feared the use of bia might violate the law or could be a danger to national security. Some even suggested it might be seen as a strategy to create an independent state. Due to the attention mentioned above, and under the direction of the Bank of Thailand, the use of the bia was suspended at the end of April, after only one month in circulation. At that point in time, there were 120 bia members of which 33 had withdrawn about 7,000 bia from the Bia bank.

As a result, the Bia Kud Chum working committee was forced to suspend the use of bia and decided to change the name of the system from ‘Bia Bank’ to the ‘Self-reliant Community Development Group’.

The villagers solicited the help of the Law Society of Thailand to support them in submitting a letter requesting the Minister of Finance to review their case and questioning whether it is necessary in the case of Bia Kud Chum to ask permission from the Finance Minister. After receiving the letter, the Finance Minister asked for the opinion of the BoT on Bia Kud Chum again. The BoT sent a letter to the Finance Minister saying that Bia is illegal and if the practices of CCS is widespread, its collapse may cause damage to the security of the national economy. Therefore, the BoT suggested to the Finance Minister that Bia should not be given permission to operate. In July 2001, the Ministry of Finance (MoF) announced that they agreed with the BoT that Bia violated the law and should not be allowed, even though they realised that Bia Kud Chum is an innovative initiative of the community which, in principle, the government should support.

In Kud Chum, after stopping their activities for 5 months, in October 2000 the villagers decided to continue their activities: organising a community market, using bia, and conducting participatory economic analysis in the village. However, the amount of bia used is very limited or even none is used in some weeks. One of the main reasons is that the villagers are scared due to the legal problem.

Implementation of Bia Kud Chum

As of January 2002, the number of Bia members has reduced to 99 (Table 2.3). Some members quit because they are afraid of being arrested.

Table 2.3: Number of members of Bia system (as of January 2002)

Villages	Sub-district	District	No. of Members
Villages	Sub-district	District	Male	Female	Total
Santisuk	Naso	Kud Chum	10	18	28
Sok Khum Poon	Naso	Kud Chum	7	8	15
Ta Laad	Naso	Kud Chum	5	5	10
Kud Hin	Kam Mad	Kud Chum	3	6	9
Kok Klang	Phai	Sai Moon	14	17	31
Non local of 5 villages			3	3	6
Total			42	57	99

Note: Non locals are the development workers who work in Kud Chum.

Despite the legal problem which caused suspension of the use of bia, other core activities of the group have carried on.

Resource Flow Analysis Workshop

In cooperation with RRAFA, Thai Holistic Health Foundation, Nature Care Society, and TCCS, the resource flow analysis workshop was held in Santisuk village in October 1999 (Picture 2.4). The participatory workshop gave an opportunity to villagers to gather information of their resources, incomes, and expenses at household and village level. In the workshop, villagers would see the picture of incomes, expenses, and an inflow and outflow of money and resources of the community. It assisted them in analysing their problem and developing solutions. The two-day workshops in another four villages were held during February and April 2001. The results of the workshops showed that generally their expenses exceeded their incomes. This situation caused them to become indebted. In the workshop, the participants were encouraged to brainstorm to find their way out of this situation. The basic solution proposed is to reduce their expenses by producing for their own consumption (Picture 2.5).

Picture 2.4: Outflow of Money from Santisuk village

The above picture displays the economy of Santisuk village. It shows four major categories of expenses within the village: Snacks, food, chemical fertiliser, and soap, toothpaste, shampoo, and washing power. It is interesting to note that one of the major expenses is on snacks for children amounting to 108,000 Baht which is equal to the amount spent on food.

Picture 2.5: Prevention of the Outflow of Money

To prevent the outflow of money from the village, the villagers must decrease their expenses by producing items normally purchased from outside, for their own consumption. For snacks, instead of having snacks produced from a big factory, children should be provided with snacks which are produced locally. In fact, women in the village are skilled at making local snacks. If they make snacks for children in the village, and even for surrounding villages, the village can reduce the outflow of money. For food, the villagers could practise alternative agriculture, which leads to the diversification of farming activities. Consequently, the villages would have access to various kinds of products, including rice, vegetables, fruits, fish, eggs, etc., for their household consumption. With regards to chemical fertiliser, the villagers could produce their own bio-fertiliser by using their farm waste. Moreover, it also assists in environmental preservation. For soap, toothpaste, shampoo and washing powder, if the villagers would produce these items for their own consumption, they would also reduce their expenses.

Introduction of Bia system in the community

To introduce the Bia concept and its operation to non-members, the meeting was held in Sok Khum