The cabinet has approved the Rubber Estate Organisation's (REO) request for a loan of six billion baht from the Bank for Agriculture and Agricultural Cooperatives (BAAC) to buy rubber products to shore up prices.
The decision was unveiled yesterday by Deputy Agriculture and Co-operatives Minister Amnuay Patisae.
Mr Amnuay said the cabinet approved the REO's request on Wednesday.
Of the six billion baht, the REO — an agency under the Agriculture and Cooperatives Ministry — will spend four billion baht buying natural and smoked rubber sheets from farmers, Mr Amnuay said.
The rest will be spent on latex and rubber cup lumps.
The move is aimed at bolstering rubber prices for the next rubber-tapping season which begins in May, he said.
For the next rubber harvesting season, the government wants to maintain prices for natural rubber sheets at 60 baht per kilogramme, prices of smoked rubber sheets at 65 baht/kg, and latex prices at 50 baht/kg, Mr Amnuay said.
At present, natural rubber sheet costs 47 baht/kg. Smoked rubber sheet costs 48.50 baht/kg and latex costs 44 baht per/kg.
Mr Amnuay was speaking after yesterday's meeting of the Natural Rubber Policy Committee, chaired by Prime Minister Prayut Chan-o-cha.
At the meeting, criteria for spending the money set aside for latex and rubber products were discussed, along with methods of buying them.
The cabinet has decided the money should not be spent on buying rubber products from major rubber farmers. Instead, the money must go to small-scale farmers via agricultural co-operatives or community enterprises.
The Natural Rubber Policy Committee has instructed provincial agencies to take action to prevent the money falling into the hands of major rubber farmers, Mr Amnuay said.
The current rubber-tapping season ends on Feb 28 and the harvesting season begins on May 15. During the interim period, the government will assess measures to solve falling rubber prices to prepare for the new tapping season, he said.
Mr Amnuay said the cabinet wanted rubber stocks to be released while their prices are not low.
Under a memorandum of understanding between Thailand and China, two million tonnes of rice and 200,000 tonnes of rubber will be sold to China under a government-to government contract. Prices are still being negotiated, he said.