Commerce to increase corn subsidy volume

The Nation

Despite facing dumping from neighbouring countries, the Commerce Ministry still plans to increase the volume of corn under its pledging programme to 1 million tonnes.

A source with one feed-mill producer questioned why the government must increase the subsidy volume despite facing dumping from neighbours and limited production in this country.

"The government cannot yet prevent or resolve illegal imports of corn from neighbouring countries, such as Burma, Laos, and Cambodia, reaching its price-intervention programme. It will face huge losses from its decision to extend the volume for a guaranteed corn price," said the source.

So far, the quantity of corn under the subsidy programme is set at 750,000 tonnes, and this requires a budget of Bt6.37 billion. If the government extends the subsidy volume to a million, another Bt2.12 billion will be needed.

Only 632,831 tonnes of corn have entered the project to date.

Normally, the government sets only 500,000 tonnes for the corn subsidy programme each year. But since promotion of contract farming in neighbouring countries, demand for a corn subsidy has increased, said the source.

According to the Internal Trade Department, Thailand can produce about 3.7 million tonnes of corn a year, while total demand is 3.81 million tonnes. Production of corn in neighbouring countries has increased sharply in the past four years, from a combined 101,474 tonnes in the three neighbouring countries mentioned to 1.24 million tonnes this year.

The high amount of corn illegally dumped into the price-intervention programme is due to the difference in prices in neighbouring countries: Bt3.50 to Bt4 a kilogram against Thailand's pledging price of Bt8.50 a kilogram.

Moreover, the source said the remaining volume of corn to be cultivated between this month and June is estimated at only 245,124 tonnes. The government should not increase the volume for price intervention, because the corn price is on the rise following lower production entering the market from late this harvest season.

Deputy Commerce Minister Alongkorn Ponlaboot said his ministry had received reports of illegal imports of corn from neighbouring countries. But it must increase the subsidy volume, due to a high level of 2 million tonnes in the market.

To address illegal dumping, the ministry will propose that the Price and Service Committee restrict corn moving outside its area, the same as rice. The ministry will limit quotas for corn enjoying price interventions in each province in line with real production volume. Each farmer will also be restricted to a trading value for corn of Bt100,000, in order to ensure that actual farmers are being assisted by the project.

Moreover, the ministry has set up a special committee to inspect 10 provinces in which smuggling has been reported: Phetchabun, Tak, Kamphaeng Phet, Nakhon Sawan, Chiang Mai, Chaiyaphum, Loei, Nan, Nakhon Ratchasima and Chiang Rai.

It will support the establishment of ethanol and cooking-oil plants in neighbouring countries, in order to prevent illegal corn from contract farming entering the Kingdom, said Alongkorn.