Rice associations, farmers call for urgent review of pledging policy

Farmers and trade bodies have called on the government to review urgently its rice-pledging policy on the grounds that it is distorting prices, benefiting the rich as well as foreign investors, damaging the Kingdom's competitiveness and discouraging the long-term development of Thai rice.

Many poor farmers said the fact that they have to rent plantation areas from landowners and other rich people had paved the way for those people, as well as foreign investors who have purchased Thai farmland, to hire them to grow rice on their land and reap the benefits from the government's high-subsidy price policy.

Thai farmers - in effect acting as employees - merely receive a daily wage in such a set-up.

Saeng Boonpiek, a village headman in Moo 7 in the Narapirom area of tambon Banglane, in Nakhon Pathom, said more than half of the 57 farmers in the village, together growing rice on 1,247 rai, have to rent plantation areas from landowners.

Saeng said he had no option but to rent land at an annual cost of Bt1,500 per rai. The landowner has gradually increased the rent over the past several years after learning that farmers can get higher prices under the government subsidy programmes.

Nipon Toomsing, another Nara-pirom farmer, said he had lost his family land to a new landowner 10 years ago because of high unpaid debt.

"Now, I have to pay 20 tanks of rice [10 kilograms of paddy per tank] per rai a year to the landlord as rent; this has gradually increased from 12-13 tanks previously, in line with rising government subsidised prices," he said.

Nipon, 55, said he was born |into farming and knew only how to be a rice farmer. He feels he now works as an employee for his landlord, |however.

RENTED PLANTATION

Somsak Lerka-nan, chairman of

the agriculture council in Ayutthaya, said two-thirds of farmers in his province must rent rice plantations from Thai landlords, and sometimes form foreign landowners.

An increasing number of foreigners have become landowners after purchasing land through their Thai employees. "I know that the owners of some land in the provinces are not Thai, as they employ a Thai agency to deal with farmers," he said.

Durian, a farmer in Moo 9 of tambon Banglane, said she could well lose her rice-farming land soon as the landowners have recently seized it back and she has no idea what they plan to do with it.

However, there are widespread rumours that the landowners want to sell the rice area to foreign investors, or might want to grow rice on the land themselves.

Thai rice farming and business structure has changed because of the government's price-intervention project aimed at encouraging more businesspeople to grow rice and start up polishing plants.

Thai Rice Farmers Association president Prasith Boonchuey said fewer farmers now owned their plantations because of higher farming costs.

"Now, about 40 per cent out of a total of 60 million rai of rice plantation area is owned by other than rice farmers. The real farmers now have to rent land for growing rice," said Prasith.

Pramoth Vanichanont, honorary president of the Thai Rice Millers Association and former member of National Rice Policy Committee, said many rice plantation areas now belonged to rich people rather than genuine rice farmers.

He urged the government to take such a state of affairs more seriously, as it is spending a huge sum on subsidising investors rather than helping real farmers.

The Yingluck Shinawatra government has spent some Bt281 billion on its rice-pledging programme since its inception last October through to the current second pledging project, which ends next month.

The country also has a larger-than-ever stockpile of 11 million to 12 million tonnes of rice, of which 1.6 million tonnes is carry-over stock from before the pledging scheme began last year.

HIGH PRICES, MASSIVE STOCK

With high prices and a massive stock, Thailand would immediately lose Bt75 billion to Bt80 billion if the stock were sold at current market prices, which are much lower than the guarantee price, he said.

Pramoth said it was time that the government ended its over-subsidy and review the pledging measure to reflect the realities of the situation.

Taxpayers have lost billions of baht each year because of the subsidisation of rice prices, which the current government proclaims is benefiting farmers. However, budgetary spending for the scheme directly benefits the rich, and even foreign investors, who are taking advantage of the price gap, he said.

Many landowners are in effect forcing farmers to change their status and become hired by them to grow rice and participate in the pledging programme, but it is the landlords that receive the benefits instead of the farmers themselves.

"Rice growing has become a business that creates large profits for investors rather than for those involved in the national tradition. They can ensure a high return as the government has set a high subsidy price of up to Bt15,000 per tonne of white paddy, while the cost of production is quoted at Bt5,000-Bt7,000 per tonne," Pramoth said.

Many foreign investors from Taiwan, Saudi Arabia, Kuwait and Singapore now allegedly own rice plantation areas in the North and Central regions to benefit from the current high subsidy prices.

Vichai Sriprasert, honorary president of the Thai Rice Exporters Association and president of Rice-land, a major exporter, said many millers, property developers, exporters and an alcohol tycoon had turned to growing rice on their land and reaping benefits from the government's high-subsidy policy.

He questioned whether the government was really helping poor farmers, or was it millionaires who were the chief beneficiaries: The high pledging price should be reviewed as it has not only damaged export efficiency, but also forced genuine farmers to lose their land to investors.

According to the Thai Rice Exporters Association, exports slumped 45 per cent year on year on from January 1 to June 27, to 3.38 million tonnes.