The Ministry of Agriculture and Cooperatives is planning to spend 17 billion baht to guarantee the price of certain cash crops in the market.
"We are working to create price guarantees for rice, rubber and palm," said Agriculture Minister Chalermchai Sri-on, on Monday. "A budget is being drawn up, which we plan to submit to the cabinet for approval very soon."
Under the proposal, the price of rubber will be set at 60 baht per kilogramme (kg), compared to the current average market price of about 39 baht/kg. The price of palm will be guaranteed at 6 baht/kg, compared to the current market price of 2.46 baht/kg, while rice prices will be capped at 10,000 baht per tonne, up from about 7,000 baht per tonne at present.
While the government will be shouldering the difference between the set minimum price and market price, Mr Chalermchai said that the price guarantees will not affect the state's coffers.
"In addition to financial subsidies, the ministry will also help farmers to reduce their overhead costs, and drum up demand for their products in the market," he said.
Mr Chalermchai said that the ministry is trying to increase the demand for rubber products by signing a memorandum of understanding with the Transport Ministry to develop rubber-based products for roads, including construction materials, as well as barriers and traffic cones.
"We will also work with major rubber producers in the region, Indonesia and Malaysia, to learn how both countries handle the impact of rubber price fluctuations," he said.
Meanwhile, Deputy Agriculture Minister Prapat Pothasuthon, said that just under one million rai of paddy fields have been damaged by the ongoing drought.
Mr Prapat warned that if left unmitigated, the drought will affect 10 million rai of farmland across the country, or one-sixth of Thailand's total arable land.