Group to build own warehouse, mill

While the rice-pledging project has resulted in farmers suffering from unfair practices and resultant low incomes, a rice-farmer group in Nakhon Ratchasima is striving to set up its own warehouse and mill to increase bargaining power and ensure fair returns.

This will be the first time Thai rice farmers have stood on their own feet by establishing a warehouse and mill in their community.

Normally, rice farmers face price-dumping by millers who joined the government's pledging project, as farmers do not have their own means to stock rice. After harvest, they must directly go to millers to sell their product, as they have no warehouses or mills to keep their rice in good condition.

Ed Sirirak, chairman of the Rice Farmers Group in Moobaan Bungkeelek, Sung Noen district, Nakhon Ratchasima, said it was amassing investment capital for setting up a warehouse.

"We have realised that we must increase our bargaining power by setting up a community warehouse and mill, as farmers have for too long suffered from unfair practices and low return due to a lack of our own facilities to develop rice quality," Ed said.

After they have their own warehouse, farmers in the community will not need to rush to sell their rice to millers. They will not suffer from price-dumping and cheating by some millers who offer low prices to farmers, he explained.

He said farmers in Sung Noen could get only Bt9,000-Bt11,000 |per tonne of rice from millers, |lower than the government's guaranteed price of Bt15,000 a tonne |of white paddy rice. This is be-|cause millers have cited high |humidity of rice, as farmers do |not have their own yards to dry their rice before selling it. Some millers have bargained hard for lower purchasing prices, citing low quality, contamination and false weight claims.

Ed said that if the community had its own warehouse and mill, it would have more bargaining power. Farmers would be able to develop the quality of their rice before sale, as well as having their own scales to weigh the rice to prevent cheating by unscrupulous millers.

With about 540 rice farmers in the group, Ed has led them in the project to build a warehouse since May. The group can now borrow about Bt3.8 million from the Bank for Agriculture and Agricultural Cooperatives and the Government Savings Bank to purchase land |and build the warehouse.

However, it still lacks Bt2 million in funding to complete the construction of the warehouse and operate it.

Currently, the group owns 5.2 |rai (8,300 square metres) of land |in the community for setting up a rice warehouse with a capacity of 5,000 tonnes. It will also build a |convenience store in the area to |earn income for the group. The |store will sell fertiliser and pesticide at low prices by cutting out middlemen.

The land is worth Bt1.5 million.

The 540 farmers in the group can produce about 7,380 tonnes of rice each year. However, other farmers from nearby communities in 10 districts also want to join the Bungkeelek farmers' group. Eventually, about 15,000 tonnes of rice is expected to enter to the warehouse annually.

Ed said he would like to invite investors to buy shares in the group so that it has adequate capital to |set up the warehouse. It plans to |set up a mill soon after completing construction of the warehouse.

He said investors would be able to gain dividends of up to 5 per cent annually.

To establish a mill, the group |will need another Bt6 million. |It will need to spend Bt1.3 million |to purchase land.

Samran Kongsungnoen, a rice farmer in the group, said he had high hopes that the warehouse and mill project would be successful soon, as farmers have long suffered from unfair practices.

He said that although the government has a pledging project |to shore up the rice price, farmers had still suffered from the loop-|holes that lead to corruption.

"With our own warehouse and mill, farmers will enjoy more income and be able to solve their debt problems," Samran said.

This is the only example of a |group of rice farmers in the Northeastern region deciding |not want to wait for the govern-ment's subsidy project to stabilise. |If people provided more support |to farmers, they would soon be able to live without any subsidy, as |they could stand on their own feet and promote long-term growth of their local communities.