Sugar-cane growers and sugar millers are opposing government plans to free up retail sugar prices ahead of implementation of the Asean Economic Community (AEC) later this year.
They are concerned the new system to be applied after floating sugar prices could mean a smaller subsidy at a time when the government is not clear how the new system will work.
Teerachai Sankaew, chairman of the North Eastern Cane Planters' Association, said farmers were not ready for the new system once domestic sugar cane prices are floated for the 2015-16 crop.
"Farmers completely disagree with the plan, as we don't know if the new system will work or who will ensure we will have the same income if we quit the current 70:30 profit-sharing system," he said, referring to the agreement between farmers and millers that sees them share profits at 70% and 30%, respectively.
The 70:30 system has been applied to the Thai sugar industry for more than three decades. Under it, the government set up the Cane and Sugar Fund (CSF) to support cane farmers by paying them additional money when global sugar prices slumped.
"We're worried the fund will be terminated after the government floats the retail sugar price, and there will be no fund to help farmers in the future," Mr Teerachai said, adding that the government had been unclear about new regulations after floating sugar prices.
Farmers also fear they will be without financial support to invest in growing the new 2015-16 cane crop.
The profit-sharing system sees millers pay farmers for their cane in advance to allow them more liquidity to continue growing. What a miller pays a farmer is called the "initial cane price", which is calculated from current global sugar prices. Farmers and millers will sit together at the end of the crop, when cane is made into sugar, to check on global sugar prices.
If prices rise above the initial cane price, millers then pay farmers additional money. But if they drop below the initial price, the CSF subsidises cane growers by providing a stipend.
The government hired the Thailand Development Research Institute in 2011 to study ways to restructure the country's cane and sugar industry ahead of the AEC. One proposal was to stop setting domestic retail sugar prices, as it encouraged smuggling to other countries and could cause a sugar shortage here.
Chanida Assadathorn, vice-president of miller Thai Roong Ruang Group, said millers were unsure whether floating retail prices would hurt cane growers and wanted the plan postponed.