Commerce Minister Jurin Laksanawisit has proposed price insurance for five types of rice, to help farmers deal with the lower price of crops.
Mr Jurin said the proposal is based on a resolution from a recent meeting chaired by farmers' representatives, rice trade associations and state officials.
The collective decision agrees to set conditions on insured paddies, including its maximum insured amount that will range from 14 to 30 tonnes, and the rate of 15% moisture. However, the rice insurance package will not cover "short-lived" rice, or rice that is harvested within less than 100 days of being planted.
"Once the insurance prices are announced, 3.9 million farmers will benefit from it," Mr Jurin said. The rice insurance policy is not new. Between 2011 and 2013, the Democrat-led government implemented crop price insurance and a crop price guarantee.
The rice price insurance scheme offers compensation if market prices are below the benchmark, said Mr Jurin. Five paddy strains have been chosen for this year's programme.
They are khao chao, khao hom mali (jasmine rice), khao hom changwat, khao hom Pathum Thani and khao niao (sticky rice). Under the proposal, farmers will see the price of khao chao insured at 10,000 baht per tonne, but the insured rice cannot exceed 30 tonnes per approved case.
Up to 14 tonnes of the khao hom mali will be insured at 15,000 baht per tonne, up to 16 tonnes of the khao hom changwat at 14,000 baht, up to 25 tonnes of khao hom Pathum Thani for 11,000 baht per tonne, and up to 16 tonnes of khao niao (sticky rice) for 12,000 baht per tonne.
The insurance prices will be approved by the National Rice Policy Committee and then forwarded to the cabinet for final approval before their announcement, Mr Jurin said. The officials will also launch additional measures to reduce production costs and prevent excessive supply, he added.
Sompit Aimthong, a farmer in Pathum Thani, welcomed the insurance package as rice with 25% moisture can only fetch between 6,500 and 7,000 baht per tonne. "If the government sets the insurance price at 10,000 baht per tonne, farmers will survive," she said.
The state help is needed as farming costs are increasing and paddies are also plagued by insects, said Somnuek Tang-on, another farmer in Pathum Thani.