Govt shores up rice price

In a bid to shore up the weakening paddy rice prices and avert protests from farmers, the government yesterday announced a rice-pledging programme in which it would buy the upcoming second crop at Bt14,000 per tonne.

The pledging price is far above the prevailing market price of Bt9,000 for paddies with 30 per cent moisture.

Under this scheme, the Bank for Agriculture and Agricultural Cooperatives (BAAC) would spend Bt10 billion and maybe Bt20 billion on some 4.2 million tonnes that are to be harvested later this month.

The scheme was unveiled after Prime Minister Samak Sundaravej chaired a top-level meeting on the rice issue with 11 ministers, including Finance Minister Surapong Suebwong-lee and Deputy Commerce Minister Banyin Tungpaporn, among others.

Absent was Commerce Minister Mingkwan Sang-suwan, who is due to return today from the Apec Ministerial Meeting in Peru.

Samak earlier asked Mingkwan to maintain the rice price above Bt14,000, but there had been no intervention.

Pongsakorn Annopporn, the deputy education minister, who attended the meeting, said: "At Bt10,000 per tonne, farmers would be happy, but the prime minister wants such a mechanism and we agreed to the higher pledging price."

Chookiat Ophaswongse, head of the Thai Rice Exporters Association, said the pledging price should have been just Bt11,000-Bt12,000 a tonne after the export price dropped by US$80 per tonne from last week due to lower domestic prices and a weaker baht.

Prasit Boonchuey, president of the Thai Farmers Association, said the government had planned the scheme to buy time and discourage farmers from protesting.

Samak insisted most of the ministers were familiar with the rice issue and the prices were set after discussion with the Commerce Ministry and the BAAC.

Farmers can pledge their white rice with BAAC at Bt14,000 per tonne and about Bt8,000-Bt9,000 per tonne for sticky rice, depending on moisture content.

"The programme will be implemented nationwide throughout the second crop. We need a mechanism to deal with the rice price due to high volatility," he said.

After pledging the rice for three months, farmers can redeem it and take the profits if the market price is higher.

Three committees will be established to carry out the pledging programme, mill the paddy rice and sell the milled rice.

The Commerce Ministry will then take care of the milled rice sale and return the proceeds to the BAAC.