The government has vowed to take a proactive approach to farm product management with plans to stabilise crop prices, particularly rice, and accelerate sealing government-to-government rice deals with Africa, the Middle East and China.
A major part of the approach is to retain paddy prices at less than 8,500 baht a tonne for white rice, 15,000 to 16,000 baht for Hom Mali rice and a minimum of 13,000 baht for glutinous rice, commerce permanent secretary Chutima Bunyapraphasara said yesterday.
The National Rice Policy Committee's measures for managing rice prices in light of the upcoming harvest from the annual main crop include asking millers to cooperate in buying farmers' output for 100-200 baht a tonne above market prices.
The move, aimed at absorbing market supply, includes the government subsidising 3% of the interest rate on loans taken out by the millers to buy the crops.
Farmers who agree to withhold their rice sales and keep their new harvest stored will be offered free interest on loans from the Bank for Agriculture and Agricultural Cooperatives (BAAC) for four months.
Ms Chutima said that at the next meeting of the National Rice Policy Committee, the Commerce Ministry would ask for permission to allow the BAAC to extend farmers' loans for 90% of the crop's value, up from 80% now.
Low farm product prices are ratcheting up the pressure on the government, particularly for rice, while it tries to dispose of massive stocks carried over from the previous government.
The new harvest from the main rice crop will hit the market by mid-November.
The Agriculture Ministry forecasts Thailand's rice supply for the 2015-16 season at 37 million tonnes of paddy.
Of that, 27 million tonnes will come from the main crop and 10 million tonnes from the second crop.
The Commerce Ministry on Tuesday said it would offer to sell 207,898 tonnes of rice from state stockpiles next week.
The tender for sale will open at the Foreign Trade Department next Tuesday after the announcement of eligible bidders earlier in the day.
The Commerce Ministry sold 140,000 tonnes in the first two auctions, raising 1.6 billion baht.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the new auction was unlikely to affect local rice prices, as the amount of grain to be put up for sale was not considered large.