Agriculture Minister Yukol Limlamthong hopes to secure Bt1.8 billion from the fiscal 2014 budget to buy rice silos to be distributed to farmers in 400 communities.
The silos would provide dual benefits – improve farmers’ chance of getting the full Bt15,000-per-tonne pledging price and help them reduce cost by cutting the number of rice seeds required by more than half, he says.
Each silo would also house machinery related to rice cultivation, fertilisers, and humidity ovens. They would each cost Bt4.5 million and be provided to farmers in 400 communities in the zones designated as suitable for rice farming by the Agriculture Ministry.
Initially, the rice silos will be presented to farmers in the Chao Phraya irrigation zone via the Tambon Administration Organisation, as those farmers have worked with the Irrigation Department, have good knowledge of irrigation, can plan rice farming efficiently and are capable of using machinery to attain maximum output, said Yukol, who is also a deputy prime minister.
The rice silo provides two benefits. First, it can bake 5-6 tonnes of rice per session to control humidity, before farmers pledge their rice with the government, thus improving their chance of getting the full Bt15,000 price. Second, it can reduce farmers’ costs by more than half, as fewer seeds are used for each rai of farmland plot, Yukol said.
As for the cost-reduction schemes for other agricultural goods, the ministry expects livestock prices to continue their upward trend in line with the raw materials for animal feed, especially corn. Thailand needs 4 million tonnes of corn per year, but can only produce 3.6 million tonnes, with the shortfall imported from Laos and Cambodia, Yukol said.
The government will discuss with neighbouring countries the possibility of adjusting the corn-farming cycle to match the requirement of Thai animal-feed plants better to reduce waste and costs related to stocking of corn, which can rot during long storage periods, Yukol added.
Meanwhile the Bank for Agriculture and Agricultural Cooperatives (BAAC) will propose to the Finance Ministry and the National Rice Policy Committee the use of insurance to reduce the cost of compensation for natural disaster, as well as fraud relating to such claims. Normally, the government spends about Bt10 billion for crops damaged by natural disaster.
According to Boonthai Kaewkanti, the bank’s deputy manager, the BAAC will today propose to Deputy Finance Minister Tanusak Lek-uthai the use of insurance to protect rice farmers. Farmers participating in the state’s rice pledging programme would have to obtain insurance coverage for the pledged rice, but the government would subsidise the cost of premiums.
Insurance would help protect farmers from the risk of natural disasters. Farmers would have to bear some of the cost of crop-insurance premiums, but the government would help alleviate this burden by negotiating with insurers to keep the premiums down to Bt120 per rai (Bt750 per hectare) per year. Furthermore, the government would help farmers with the insurance cost at the rate of Bt69 per rai.
The insurance will cover the full spectrum of the cost of production, Boonthai said.
Currently, 6 million BAAC clients have crop-insurance protection. By making crop insurance mandatory, the insurers will have more clients – up to 15 million – thereby reducing their risks and enabling them to lower premiums for coverage of 60 million rai of farmland. The farmers would have to pay only 25 per cent of the cost of the premiums, Boonthai added.
When all rice farmers have crop insurance, the government could reduce the Bt10 billion compensation paid per year for crops damaged by natural disasters to just Bt1 billion (its cost for the insurance). The insurers will bear the cost of any damage.
The current cost of crop insurance is Bt1,111 per rai, Boonthai said.