Govt announces B21bn rice price insurance scheme

Govt announces B21bn rice price insurance scheme

Relief for farmers as the government unveils a 21 billion baht rice price insurance scheme. (File pic)
Relief for farmers as the government unveils a 21 billion baht rice price insurance scheme. (File pic)

The National Rice Policy Committee, chaired by Prime Minister Prayuth Chan-o-cha, on Wednesday announced 21 billion baht in subsidies to help stabilise prices for rice farmers hurt by drought and a strong baht.

Under the new rice scheme, the government will agree to pay farmers a fixed price for a set amount of production if market prices fall below benchmark prices during the main harvest seasons.

Under the new scheme, jasmine rice will be insured at 15,000 baht per tonne up to a maximum of 14 tonnes per household, jasmine rice grown outside irrigated areas will be insured at 14,000 baht  for up to 16 tonnes per household, and Prathum Thani jasmine will be insured at 11,000 baht for up to 25 tonnes per household.

Glutinous rice will be insured at 12,000 baht a tonne up to 16 tonnes per household, while non-glutinous rice will be insured at 10,000 baht up to 30 tonnes per household.

The government estimated that the scheme will cover almost four million farmers. It plans to introduce additional measures, including cash handouts to cover the cost of harvesting. These subsidies will be considered by the cabinet next week.

Thailand is suffering its worst drought in a decade, which has hurt farmers and reduced supplies, lowering the country's rice exports. A strong baht and ample global stockpiles have further curbed sales.

"Since the start of the year, Thailand has exported 5.29 million tonnes, a reduction of 22% compared to the same period last year," government spokeswoman Narumon Pinyosinwat told Reuters.

"This generated $2.8 billion in revenue, a reduction of 17% compare to last year, and this is due to the strong baht and the drought," she said.

The rice exporters association lowered its annual export target for 2019 to 9 million tonnes from 9.5 million tonnes after a sharp fall in first-half exports.

The main rice-growing season begins in May, at the start of the rainy season, for harvest between August and October, while jasmine rice is usually grow in August for harvest in December.

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