Short-term rice aid proposed

Short-term rice aid proposed

Plan will limit crop production costs

Measures to address low paddy prices and spiralling production costs are likely to be finalised tomorrow, but some farmers may feel a bit disappointed as neither cash handouts nor any other sort of compensation will be involved.

Officials from the Office of the Auditor-General and the army's Region 2 climb to the top of a rice stack kept at a warehouse in Nakhon Ratchasima province. Inspections have been carried out nationwide to examine the quantity and quality of the state’s pledged rice. PRASIT TANGPRASERT

The meeting between Gen Chatchai Sarikalya, deputy head of economic affairs for the National Council for Peace and Order (NCPO), and representatives from rice millers, farmers, exporters and relevant state agencies yesterday agreed on guidelines to help farmers cope with production costs.

Within the guidelines, vendors of chemical fertiliser, insecticide, rice seeds, rice harvesters and land owners who rent their farmland agreed to cut their product prices, while the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) is set to offer special low-interest loans to farmers and committed to design additional measures to raise the paddy prices.

Gen Chatchai insisted the measures will not include cash or other forms of subsidies, but rather focus on how to lower farmers' production costs.

All proposals raised at the meeting were to be mentioned to NCPO chief Gen Prayuth Chan-ocha for consideration yesterday evening, so that measure can be in place for the 2014-15 crop year.

BAAC president Luck Wajananawat said lower production prices were estimated to help cut farmers' production costs by 432 baht a rai from an average of 4,787 baht a rai.

If the low-interest loan programme is included, farmers' production costs drop by a combined 582 baht per rai.

The state bank proposed to cut its loan rate by 3% from the minimum lending rate for six months.

Wichien Phuanglamjiak, president of the Thai Agriculturist Association, said the junta's commitment to stabilise paddy prices at 8,500 to 9,000 baht was acceptable, but he urged it to classify the farmers into two groups, noting that farmers who stayed in non-irrigated areas normally had higher production costs, averaging 6,500 to 7,000 baht per rai.

Rawee Rungruang, who leads a network of farmers, said the guidelines are acceptable given the current limited fiscal budget conditions. He also urged the junta to help cut diesel prices for farmers in the same manner provided to the fisheries sector.

Nipon Poapongsakorn, a distinguished fellow at the Thailand Development Research Institute, said the junta's focus on cutting production costs in lieu of cash subsidies was understandable, given budget constraints.

But he said the junta still required close monitoring to check if the cooperation it was asking for from private operators to help cut production prices could actually be put into practice.

Mr Nipon said if cash subsidies were still deemed necessary, there should be a mechanism to ensure the cash went directly to poor farmers.

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