Why did Doi Chaang Coffee delay payments to farmers for nearly three years?

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Doi Chaang Coffee Cited Economic Downturn and Affected Sales for Payment Delays

Doi Chaang Coffee delayed payments to approximately 200 farmers for nearly three years due to a downturn in the economy and a subsequent impact on its coffee sales. The company has committed to repaying about 7 million baht (RM926,620) to these farmers, with the expectation of settling all outstanding amounts by June.
Economic Conditions and Sales Impact Cited

The managing director of Doi Chaang Coffee Original Co., Panachai Pisailert, stated that the economy had been unfavourable for the past two to three years, which in turn affected the company's coffee sales. This economic pressure is presented as the primary reason behind the inability to meet payment obligations, a stark contrast to the company's previous practice of paying suppliers within four days.
Farmers Faced Escalating Debt

The non-payment, with amounts owed to individual farmers ranging from 2,000 to 230,000 baht since 2017, forced growers to seek alternative financing. Farmers resorted to taking out high-interest loans from informal lenders, state-owned banks, and village funds to cover essential operational costs such as fertiliser and pesticides. In one documented instance, a farmer's outstanding debt reached approximately 300,000 baht, stemming from a 50,000 baht non-payment by Doi Chaang, creating a potentially unending cycle of debt.
Social Enterprise Status Contrasts with Payment Issues

Doi Chaang Coffee positions itself as a social enterprise, founded in 2003 with the stated aim of providing growers with fairer prices and addressing social issues. This self-proclaimed mission to support growers' livelihoods stands in contrast to the reported delays in payments, which have placed farmers in precarious financial situations. The company also operated without formal written contracts with its suppliers, a practice described as unusual and potentially leaving farmers vulnerable.

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Why did Doi Chaang Coffee delay payments to farmers for nearly three years?

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