The cabinet on Tuesday approved measures worth 13 billion baht to help rubber farmers and support falling prices, the director of a state rubber agency said.
The government said it would pay a direct subsidy of 1,500 baht per rai for up to 15 rai per household, Weerasak Kwanmuang, director of the Rubber Authority of Thailand, told Reuters.
Mr Weerasak, who attended the cabinet meeting that approved the measures, said the government would take loans from the state-owned Bank of Agriculture and Agricultural Cooperatives and start paying farmers in December.
The direct subsidy is higher than a request made last week from 16 rubber farmer groups for payment of 1,250 baht per rai.
Around 850,000 families are expected to receive the hand-out in the world's top producer and exporter of the commodity.
Documents outlining the new rubber measures were issued on Tuesday by the government. The measures will cover production, education and living expenses for rubber tappers, the documents show.
"I'm pleased, to an extent. I realise that this is just a temporary measure and it is not sustainable," Soontorn Rakrong, a spokesman for 16 rubber groups in southern Thailand, told Reuters. "This is a first aid measure."
Last week, Mr Soonthorn had asked the government to pay a direct subsidy to rubber farmers.
Approval comes after the cabinet last week approved measures worth about US$1 billion to help rice farmers, including grants and an interest rate reduction for farmers from state banks.
Rubber farmer groups demanded last week that the government approve aid measures to support higher living costs and lower prices of the commodity. But some said Tuesday the new subsidies would not be enough to take the sting out of falling prices.
"These measures aren't enough," northeastern rubber farmer Samai Sribang, 58, told Reuters. "I would rather see the government help raise rubber prices nationwide."
The farm subsidies come after much resistance from the military-led government which had vowed upon taking power last year they would end the country's populist subsidies. But growing criticism from rice and rubber farmers, who have seen their incomes fall following the end of subsidy schemes introduced by the previous government, has forced the junta to make a U-turn.
Rubber prices have weakened as demand in China, the world's biggest consumer of the commodity, remains lacklustre due to its economic slowdown.
Thai RSS3 rubber was quoted at 37.99 baht per kilogramme in Bangkok on Tuesday, up 0.22 baht. RSS3 December futures stood at $1.25 per kilogramme, up a penny.