The LETSaholic Twist
- Everything you always wanted to know about LETS
... but didn't know who to ask.

About the book

This is the information James Taris shared with LETS groups all over the world on his international LETS tours between 2002-2004.







Bia Kud Chum

A tool for creating strong, self-reliant communities

Wanlop Pichpongsa
Menno Salverda

The setting is Kud Chum district in Northeastern Thailand. The Green Revolution and the liberalisation of markets has led to community members becoming more and more dependent on externally set prices for rice, their main crop. In this process they have entered a vicious cycle of debt, lost their community forests and indigenous knowledge, particularly in areas such as herbal medicines, and are as a result now facing things such as health problems and an exodus of village youth to Bangkok in search of work.

Various villages 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 organisations. For example, associations of traditional herbal practitioners, initiatives for integrated agricultural, a community owned rice mill supporting chemical free rice production, cooperative shops, and women�s groups producing soya milk, herbal shampoo and dishwashing liquid and �self sufficiency groups�. The objective of �self-sufficiency group� is healthy production for household consumption, selling only the surplus of their goods. They also promote the exchange of labour and tools amongst community members.

Why a community currency system?

In September of 1998, representatives from Kud Chum attended a seminar on community currency systems and self-reliance. They realised that a community currency system would increase production for local consumption and self-reliance in the community and lower dependence on external markets. It would reduce the outflow of money (Thai baht) and other resources from the community and would reduce indebtedness as less money/credit is needed. It also would enhance diversification and sustainability of production and revitalise indigenous knowledge and good relationships between people in the community

This sparked the creation of a local exchange system later named Bia Kud Chum. In the Northeastern (Isan) language, �bia� means �seedling�. This reflects the communities� aim to develop into a strong, thriving community like small seedlings growing into large trees. As community members in Kud Chum are not very familiar with accounting practices, a user friendly coupon or notes-based system was chosen.

How it is implemented?

A working committee was formed which worked on the nuts and bolts of setting up a community exchange system in five villages. This working committee was given three main functions:

  1. Accounting, which is carried out by elected managers. The managers facilitate the withdrawals and deposits of bia and administrate the bia member accounts.
  2. Extension activities to support efficient and balanced use of bia between members
  3. Monitoring and evaluation of the use of bia.

Group members have a credit limit of 500 bia, which they can withdraw from the "Bia Bank" (a name which later the community was not allowed to use anymore). 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.

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?

The community started to use the bia for the first time in March 2000. Its use attracted much attention from the mass media and officials. 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 this attention and under pressure of the Bank of Thailand (BoT), 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�.

The villagers asked for assistance from the Law Society of Thailand to send a letter to the Finance Minister to ask to reconsider the case and question whether the case of Bia Kud Chum is necessary 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 security of the national economy. Therefore, the BoT suggests to the Finance Minister that Bia should not be given permission. Currently, the Ministry of Finance (MoF) is considering the case.

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.

What�s next?

In their efforts to become self-reliant, the villagers of the five communities have been accused of breaking the law, an accusation that is far from being justified. Even though the Government has announced its intention to encourage the development of self-reliant and strong community economies, the case of Bia Kud Chum shows they are actually preventing this from really happening.

"Bia" Kud Chum is indeed a seedling that, as it takes root, will help to bring about self-reliance for communities in Thailand. However, before seedlings can become great trees, and before these communities can achieve the self-reliance that they deserve, they will face many obstacles. The drive to overcome these obstacles and to create change requires the collective energies of people from a variety of backgrounds, communities, development organisations and government. There is a need to think, learn and explore alternatives together and to support each other in this quest for more just and sustainable economic systems.

Recently, The Thai Community Currency Systems Project (TCCS) held the meeting on community currency where academics, NGOs, the BoT, the MoF, and the villagers from Kud Chum participated. As a consequence of this meeting, there is a high possibility that Bia Kud Chum will be developed to be a research project.

Wanlop Pichpongsa
Thai Community Currency Systems Project (TCCS)
Local Development Institute (LDI)
c/o 2nd Building, Department of Medical Science
693 Bumrungmuang Road, Pomprab District
Bangkok 10110 Thailand
Tel +66-2-621-7810
Fax +66-2-621-8042
Website: http:\\\

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