Banner year for rice doesn't translate into bigger bonuses

AGRICULTURE

The year 2008 was a prosperous one for Thai rice exports but not all parties involved in the industry will share in the bounty.

Prasith: Farmers also missed windfall

Two-month bonus payments, the same as in previous years, are likely for the staff of many rice exporting companies including STC Group and CP Intertrade, despite the outstanding performances of the past year.

Farmers, however, never have a chance for extra income beyond what the market will pay for their crops.

''Obtaining at least 10,000 baht a tonne for paddy is great for farmers. Farmers never have special benefits like bonuses,'' said Prasith Boonchoey, president of the Thai Farmers Association.

This year's strong sales pushed up prices of Thai rice exports in the first nine months by 53% to an average of 19,920 baht per tonne, up from 13,009 baht a year earlier, according to statistics from the Thai Rice Exporters Association.

Export value doubled to 166 billion baht in the period but Mr Prasit said farmers missed out on the windfall because almost all of their paddy was sold before prices began their sudden rise.

''It takes four months to grow rice. When the paddy was harvested, the peak (of prices) was over,'' Mr Prasit said.

However, he believes many farmers are satisfied with current prices even though they are much lower than the peak in May, as their production costs, especially for fertilisers, have been decreasing in line with fuel prices. World oil prices have fallen more than 70% from their record of $147.50 a barrel in July.

Urea fertiliser now costs 650 to 700 baht for a 50-kilogramme sack, down from 1,400 baht a few months ago.

Thailand was expected to export about 10 million tonnes of rice in 2008, almost all from members of the Thai Rice Exporters Association, which receives 1.50 baht as a fee for every tonne of rice shipped by members. The 2008 export shipments earned the association about 15 million baht.

The 10 staff of the association receive fixed bonuses of two months' salary whether the market is weak or strong.

Some employees of rice exporting companies believe they should be entitled to more for 2008, given the year their companies had.

''We are receiving a year-end bonus in the same amount as last year, two months, the rate that has been used for many years,''said an employee of STC Group, the country's top rice exporter. STC was estimated to have shipped about two million tonnes of rice in 2008, or 20% of the country's total.

Similarly, the rice business of the CP agribusiness conglomerate is paying two months even though its exports rose 43% year-on-year to 500,000 tonnes, said Sumeth Laomoraporn, president of CP Intertrade Co.

The strong market raised the company's rice sales in 2008 to a record 22 billion baht, up sharply from six billion a year earlier.

''Yes, executives do receive some special payments but they have not yet been announced,'' he said.