The government has pledged to use more cassava in ethanol production to curb negative effects on domestic cassava prices during the November-February harvest season.
A farmer dries his cassava roots before selling them to a crisp-making factory. Cassava growers are seeking relief before a likely surplus hits. Pattarapong Chatpattarasill
Commerce Minister Chatchai Sarikulya said his ministry will soon hold talks with relevant agencies to set policies and guidelines on how to promote ethanol production and agricultural zoning.
The discussions will also cover the feasibility of setting up a cassava fund.
"It's a bit worrisome for cassava's prospects, as the upcoming production is expected to reach 30 million tonnes, well outstripping the 28 million harvested last year," Gen Chatchai said.
Teerachart Soeikratok, secretary-general of the E-Sarn Cassava Association, said concerns were mounting among farmers that the massive supply from December-February would put added pressure on domestic cassava prices.
Cassava is now quoted at 2.30 baht a kilogramme, marginally higher than the production cost of 2.24 baht per kg.
"The government's assistance in curbing the impact during the harvest season is a must," Mr Teerachart said.
"We're proposing the government use more cassava to make ethanol, from 4-5 million tonnes a year to possibly 10 million tonnes this year. A cassava or tapioca fund also needs to be set up to address the country's overall cassava market and exports."
Farmers have called on the government to provide interest-free loans as an incentive to delay the harvest and refrain from dumping supply onto the market.
They propose a cash subsidy in the amount of 1,500 baht a rai for up to 25 rai per household.
An estimated 20 billion baht should be spent on the subsidy, Mr Teerachart said.
Thailand has 8 million rai of cassava farmland supporting 700,000 families.
Up to 8 million tonnes a month is expected to enter the market during the December-February period.
It would be "unbearable" if prices fell below cost to 2.20 baht per kg, Mr Teerachart said.