PM defends rice price cut
The government will not stop its rice-pledging policy but will continue it in a more sustainable way, Prime Minister Yingluck Shinawatra said on Saturday.
- Published: 22/06/2013 at 10:56 AM
- Newspaper section: news
However, she said authorities had no choice but to reduce the price paid for rice by 20%, given local and world market conditions and the need for fiscal discipline.
The government is trying to defuse possible protests by farmers upset by the price reduction to 12,000 baht a tonne from 15,000 baht, effective from next month.
Speaking on her "Yingluck Government Meets the People" weekly programme on NBT, the premier reiterated the government's confidence that rice pledging could help improve the quality of life of farmers.
She said that before taking office, the Pheu Thai Party carried out a study on how to resolve poverty, particularly among farmers facing the problem of low-priced rice.
It concluded that pushing up rice prices would be highly effective. However, the price the government set, at 15,000 baht a tonne, was 40% above prevailing market rates, and critics warned that the programme would face trouble.
Two years later, the government is sitting on millions of tonnes of expensive rice that it can't sell, and has accumulated debts of at least 136 billion baht from the scheme so far.
However, Ms Yingluck on Saturday defended the programme, saying it had helped spur domestic consumption and enhanced economic expansion.
The price reduction, she explained, was aimed creating better balance in all dimensions, including rice production costs, rice quality, global prices and fiscal discipline.
World rice prices did not increase last year as expected amid weak demand, and as a result the cabinet had to approve a pledging price reduction, she said.
She insisted that if global rice prices increase, the pledging price for rice would be raised accordingly.
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- Writer: Online Reporters
- Position: Online Reporters