Government urged to boost farm product prices

Government urged to boost farm product prices

Business leaders are urging the government to introduce a scheme for the agriculture sector aimed at boosting farm product prices to increase the purchasing power of a vast part of the population.

The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) suggested at its first monthly meeting that the farm sector urgently needs government assistance.

Supant Mongkolsuthree, chairman of the Federation of Thai Industries, which is a member of the committee, said the immediate task the government needs to tackle in the first three months of this year is the sluggish trend of farm product prices.

"The efforts of government to support farm prices is the direct way to boost people's buying power in the domestic market. Farmers form the vast majority of the domestic market," he said.

"Last year the government subsidised the rice farmers by 1,000 baht per rai in the hope that farmers would spend money and then that money would improve liquidity in the economy. But apparently it didn't work because of people's lack of confidence." 

In the short term, Mr Supant said, if people saw product prices climbing up, their confidence in future income would improve immediately, resulting in further spending.

Mr Supant said Thailand's economy expanded at a slow pace in 2014, while economists expect gross domestic product growth of 3.5-4% and export growth of 3-4% in 2015. Whether those targets will be reached depends on the government's policies.

"We are urging the government to move the Thai economy forward quickly through a strategy that can raise agricultural market prices," said Mr Supant.

The JSCCIB expects that inflation in 2015 will not be a problem due to weak crude oil prices.

"Thai business will not increase consumer product prices as the oil price falling will result in stable logistics and production costs," said Mr Supant.

Isara Vongkusolkit, chairman of the Thai Chamber of Commerce, said the economy this year would expand on the back of government investment projects worth 6.8 billion baht, pay rises for civil servants and new routes for elevated train projects.

Thai exporters should focus on Asean countries especially Cambodia, Laos, Myanmar and Vietnam as well as Indonesia and the Philippines, which are enjoying strong growth.

Outside Asean, exporters should concentrate on the Bric area of Brazil, Russia, India and China because these developing countries' purchasing power is expected to continue to grow strongly in the coming years.

Poj Aramwattananont, deputy secretary-general of the Thai Chamber of Commerce, said the JSCCIB planned to set up a new working group to conduct a study about the impact of the end of the European Union's Generalised System of Preferences privileges for Thai exporters this month.

"We anticipate a loss of US$6 billion in 2015 alone for Thai exports including frozen food, garments and shoe products," said Mr Poj.

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