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19 July 2013
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Farmers agree to lower price

B13,500 per tonne for paddy for next season.

Farmers’ representatives say they would be willing to accept a rice pledging price cut for white rice paddy to 13,500 baht a tonne for the 2013-14 harvest season.

Such a move would be acceptable to help the government reduce the massive losses that have resulted from the controversial scheme, they said yesterday.

But they insist the maximum ceiling for farmers to sell via the scheme should not fall below 400,000 baht worth of rice per household.

However, this proposal would need to be discussed with farmers nationwide before it could be implemented, they said.

Representatives from the Thai Rice Farmers Association, the Thai Farmers Promotion Association and Thai Farmers Association (TFA) offered the proposal during discussions yesterday with the Commerce Ministry’s Internal Trade Department on rice pledging prices for the 2013-14 harvest season.

TFA president Wichian Phuanglamchiak said the prices proposed are satisfactory to a certain extent.

But he said farmers want not only a better quality of life but also lower production and financial costs including fuel costs and Bank of Agriculture and Agricultural Cooperatives interest rates, now at 5-7%.

Wiboonlasana Ruamraksa,director-general of the Internal Trade Department, said the department will have to discuss the farmers’ price proposal with relevant state agencies such as the Finance and Agriculture ministries and millers.

These discussions will be held on July 29.

Resulting recommendations will be forwarded to the National Rice Policy Committee.

Ms Wiboonlasana said the 13,500 baht a tonne proposed by the farmers is still higher than the market price,as prices are estimated at 20,000 baht a tonne once the paddy was milled into white rice.

Estimates suggest the government will have to spend up to 220 billion baht to buy the paddy at that proposed price.

The department estimates the 2013-14 main season harvest will be 28 million tonnes of paddy, but the pledging scheme can afford to buy only 15 million tonnes.

Taking the buying price proposed by farmers into account, the government would be subject to 50-60 billion baht in losses  still relatively high,as the Finance Ministry has set a framework for scheme losses at not more than 70 billion baht a year.

The government early this month reversed its decision to slash the rice-pledging ceiling price and decided to continue paying 15,000 baht a tonne for white rice until Sept 15.

In the South, the 15,000-baht pledging price will continue until Nov 30.

The National Rice Policy Committee (NRPC),chaired by former commerce minister Boonsong Teriyapirom, earlier cut the pledging ceiling price from 15,000 baht a tonne to 12,000 baht for the current crop, effective July 2.

The panel also limited the pledging amount to no more than 500,000 baht a household.

The price cut comes amid mounting criticism that losses from the scheme had exceeded 200 billion baht.

It also prompted farmers to stage a mass protest in Bangkok late last month to demand the government review the cut.

However, the government’s U-turn on rice-pledging prices also drew criticism from academics.

Experts said that the move undermined the government’s credibility and boiled down to poor policymaking.

Nipon Poapongsakorn, a former president and now a distinguished fellow at the Thailand Development Research Institute, said the reversal indicates how sloppy the government and the NRPC were in policy implementation.

นักวิจัย

Nipon Poapongsakorn, Ph.D.
Distinguished Fellow

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