Special Report: National rice agenda needed soon to benefit all players

Exporters in Thailand, the world's largest rice exporter, are worried about competitiveness as ignorance about the many support-ing factors and the government's heavy price-intervention programme remains rampant.

They feel competitiveness is being undermined by the poor irrigation system, hybrid seeds and the disappearance of organic growing methods, which they say has resulted in lower yields and higher costs.

Meanwhile, they say, price-intervention measures are poorly implemented, aimed mainly at political gain and not shoring up rice prices.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said Thailand's image has been damaged by the absence of a national agenda. For instance, farmers in Thailand's Central region now grow five crops of rice every two years, compared with two crops per year in the past. The method has destroyed soil fertility. Jasmine rice now does not smell as good as it did in the past.

In addition, a lack of technological knowledge and hi-tech machinery have left Thai farmers with lower yields than their counterparts in other exporting countries.

Moreover, the price interven-tion programme has created a

two-tier system, with a pledging price and a market price. Traders may wait until the government opens bidding to release the huge rice stockpile. Normally, the win-ner would get a lower price than

the price fixed in the government's subsidy programme. Bidders who win the auction will have a price that is US$20 (Bt720) to $30 per tonne lower than the market price.

Meanwhile, Thailand faces constraints in terms of budgeting for rice development.

"The [budget] restriction has led to a shortage of researchers. Rice development will be hampered in the near future," Chookiat said, adding that most Thai rice researchers are 40 or older.

According to an Office of Agricultural Economics report, Thailand's average rice yield is 459 kg per rai, with a median of

416 kg from the main crop and 690 kg for the second crop. Comparatively, Vietnam's yield reaches 700 kg, while China's is about one tonne.

Chookiat said now is the right time for the government to draw up a national agenda for the sustainable development of the farm sector. This is a way for the government to confront both falling prices and potential farmer protests in the future, he said.

The government should focus on investing in irrigation systems, research and development in hybrid rice seeds, and training programmes for farmers to learn more about modern technology, fertiliser utilisation and logistics development, he said.

Particularly, marine logistics system should be developed to reduce transportation costs, he said. So far, 90 per cent of rice

transportation is by land, making it subject to fluctuations in oil prices.

The government's subsidies must also be cut to reduce losses and encourage farmers to stand on their feet.

"Imagine that the Kingdom's total rice production is a 50:50 draw for domestic consumption and export. What will happen if we

cannot export an average of 7 million to 8 million tonnes per annum?" he said, pointing out that the global financial crisis has caused importing countries to seek cheaper rice.

Prasit Boonchuey, president of the Thai Farmers Association, said rice pledging is still a necessary short-term measure to assist farmers. The long-term goal is to create a national agenda for sustainable development for all rice-related businesses, he said.

The priority should be to focus on rice quality development, as farmers lack farming knowledge. Particularly, members of the younger generation have little interest in studying at agricultural colleges and universities.

In addition, the government should find ways to reduce production costs, especially on fertiliser, oil and land, he said.

Prasit pointed out that irrigation development is also crucial to ensure the water supply for the agricultural sector nationwide.

Particularly urgent is the development of rice-growing in the Northeast, the country's main jasmine rice-growing area.

"So far, farmers have focused on price rather than quality. That's why they have to grow many crops to generate income," Prasit said.

He urged the government to allow farmers to grow rice twice a year, as well as provide them with marketing knowledge.

"Farmers want the government to announce the future price to help them manage production each year. The practice would help reduce risk for farmers, allowing them to focus more on quality," Prasit said.

He said subsidies should be given to research and development. The budget for the Rice Department should be set at Bt10 billion per year, compared to Bt100 million now, if Thailand is to find new rice strains with higher yields and quality, Prasit said.

Note: This is the first in a two-part series.