July 16, 2014 00:00 By Petchanet Pratruangkrai
The Board of Trade of Thailand will propose five strategies on sustainable rice-industry development to the National Council for Peace and Order (NCPO), a programme it claims would cost the government just Bt20 billion a year, a tenth of the cost of the d
Isara Vongkusolkit, chairman of the Board of Trade and the Thai Chamber of Commerce, said the rice industry needed long-term development, as it is a key sector of the national economy involving more than 4 million households.
"If the rice industry is successfully developed, it will help reduce income gaps and create sustainable development for rice farmers," he said.
The five strategies will be discussed today at a public-private joint standing committee meeting led by NCPO chief General Prayuth Chan-Ocha.
The strategies are: promoting the "sufficiency economy" philosophy; adopting modern farming technology to increase productivity and reduce costs; promoting alternative economic crops where rice cultivation is not suitable; supporting research and development on rice-seed quality; and supporting market liberalisation by allowing private enterprises to trade rice with no intervention by the government. The government’s only role should be to ensure fair benefits for farmers, millers, and rice traders.
As the first step, the chamber suggested that the government reform plantation areas, as some are not suitable for rice cultivation and should be used for other economic crops.
Thailand currently has 70 million rai (11.2 million hectares) of rice-plantation areas, but the chamber has found that 27 million rai is not suited for rice as the land is outside irrigation areas and has inappropriate soil quality. This land should be promoted for other economic crops such as maize, cassava, sugar cane, palm and rubber.
According to a study by the chamber, net incomes for Thai farmers differ widely. Those cultivating oil palm net Bt5,768 per rai on average, sugar cane Bt5,708 per rai, rubber Bt5,128, maize Bt1,196, cassava Bt1,045, and rice a mere Bt271 per rai (Bt1,694 per hectare).
Rice farmers should be encouraged to integrate their plantations to reduce costs.
Moreover, rice marketing should be developed, particularly on the Agriculture Futures Exchange of Thailand, which should reflect real agricultural prices. The government should encourage more traders to participate in the futures market. The chamber suggests that the AFET should be under the control of the Finance Ministry instead of the Commerce Ministry.
Pramoth Vanichanont, an adviser to the chamber’s rice strategy working committee and to the Thai Rice Farmers Association, said that if the military government agreed with the proposed five strategies, it would need to spend only Bt20 billion a year to develop the rice industry.
He said past governments needed to spend only about Bt20 billion to Bt30 billion a year to subsidise the rice price since 1992, but that increased to Bt53 billion in 2010-11 under the price-guarantee project. Annual spending surged to Bt200 billion during the 2012-2014 pledging scheme, which was very costly but an inefficient way to support farmers in long-term.
Vichai Assarasakorn, vice chairman of the chamber, said the government should set up a fund to help rice farmers for the long term. The fund could be used for research and development or rice-seed quality, and for aid to farmers hit by natural disasters.
The fund could be sourced from income taxes that rice exporters and millers pay to the Finance Ministry, as well as about Bt2 billion a year exporters pay the Commerce Ministry under the terms of a European Union quota.