The Commerce Ministry's proposal to slash the rice pledging price has infuriated paddy farmers, who are threatening to hold a mass rally if it goes ahead.
Kittisak Ratanawaraha, head of a network of rice growers in 17 northern provinces, said any move by the government to go back on its promise to pay 15,000 baht for each tonne of pledged rice would be completely unacceptable.
His network covers 50,000 rice-growing families.
The farmers' threat came after commerce permanent secretary Vatchari Vimooktayon told the media on Wednesday the ministry would propose that the National Rice Policy Committee cut the pledging price to 13,000 or 14,000 baht a tonne.
Mr Kittisak said farmers rarely receive the full 15,000-baht rate under the present rice pledging scheme, because moisture and contamination are often cited as excuses to cut the price.
Even with the best rice, farmers are often paid only up to 11,000 baht a tonne.
The government has delayed payments for four months, forcing farmers to depend on loan sharks who charge interest rates of 20% a month.
He said if the government cut the pledging price to 13,000 baht a tonne, farmers could end up being paid only 8,000-9,000 baht a tonne.
The Phichit farmer said the pledging scheme was ripe for abuse and does not really benefit farmers.
"If the government wants to really help farmers, it should freeze the prices of fertilisers and farm chemicals, cut interest rates for us and end the delays in payments for pledged rice," Mr Kittisak said.
Kasem Promprae, a rice farmer in Phitsanulok, said more than 7,000 families of rice farmers in the province were ready to rally at Government House if the government lowers the pledging price.
"The rice pledging scheme does not make us more money than the price insurance policy [of the past government], but at least that scheme resulted in us receiving the money faster," Mr Kasem said.
Wichien Phuanglamjiak, president of the Thai Agriculturist Association, said members of the association representing farmers in more than 40 provinces would meet Prime Minister Yingluck Shinawatra next Monday to discuss the issue.
Commerce Minister Boonsong Teriyapirom yesterday played down the farmers' concerns, saying the rice price cut proposed by academics and exporters was only being studied.
He ordered the Department of Internal Trade to study the proposal and report its findings to the rice policy committee. He said the panel would meet in the middle of this month.
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said a price cut was expected because the pledging scheme had forced the price of Thai rice above that of other countries and the policy was too costly for the government.
He said pledging cost the government 100 billion baht annually, which could lead to financial problems.