The government will not provide a cash subsidy for struggling rubber farmers, as it could open Thailand to criticism in the global trade arena, but will instead promote local consumption of rubber to boost the price.
The decision was reached at a meeting of the Natural Rubber Policy Committee meeting chaired by Prime Minister Prayut Chan-o-cha on Wednesday morning. The meeting of government, private sector and grower representatives was called to consider several aspects of the rubber industry, including the low price.
Rubber farmers have asked for government assistance due to the sharp fall in the price to around 40 baht a kilogramme, or about a quarter of the peak price of over 160 baht a kilo in 2011.
Gen Prayut said it was necessary to strengthen rubber plantation owners, farmers and tappers, but not through a price subsidy as it would be in breach of the World Trade Organisation (WTO), to which Thailand is a signatory.
He said the government would need to find other measures to ensure that people involved in the industry would be able to stand on their own feet when rubber prices drop.
The government wants to encourage farmers to grow alternative crops or raise animals instead, to generate other income. At the same time, growers should try to reduce the cost of rubber production.
Gen Prayut said the government wanted to create a sustainable systematic structure for the rubber industry by promoting local consumption of rubber, to increase demand, such as in the construction of roads and football pitches.
He said the government also planned to support the establishment of a "rubber city", and tyre and automobile testing centres.