A request by a Chinese firm to lease 20,000 rai of rubber plantation land in Nakhon Si Thammarat for 30 years from the Rubber Authority of Thailand (RAOT) is likely to be rejected, according to Agriculture Minister Grisada Boonrach.
Mr Grisada said he received a letter from representatives of Shanghai Thai Rubber Co, which wants to lease the land in tambon Krung Yan of Thung Yai district when he attended a meeting with rubber farmers at Prince of Songkla University in September.
Based on the document, the company wants to lease the land and, during the first three years when they cannot take rubber from their own land, purchase additional rubber latex from local producers for 20-30 baht a kilogramme, which is above the current market price and would be used for cosmetic products and medical supplies.
The company also wants to establish 10MW power plants and a lumber mill in the area.
Mr Grisada said the firm claimed its operation would help solve tumbling rubber prices.
The minister said he handed the letter over to acting RAOT governor Yiam Tawarorit so he could assess the request and bring it to the organisation's board for consideration.
He said he told the acting governor that the interests of the farmers must be considered.
He said he was not sure whether, based on laws, the foreign private entity would be allowed to lease the land for 30 years since it is not in a special economic zone.
"As I had a preliminary talk with the acting RAOT governor, the lease does not seem to be doable, and this will have to be reported to the board for acknowledgement," said Mr Grisada.
"Farmers should not be worried about it. I have told the acting governor to find ways to shore up rubber prices," the minister said.
According to Mr Grisada, he received the letter in the open venue, where many participants attended, including the company's representatives who also gave a presentation at the event. He said he asked the firm's Thai representatives about its power plant project in the area, but they were unable to offer any further details.
Uthai Sornlaksap, president of the Rubber Network Council and Rubber Farmers Institute of Thailand, said the company has registered capital of 50 million baht but is pursuing a megaproject worth 500 billion baht, adding that the firm has not run any businesses for almost two years.
He said he cannot imagine how a 20,000-rai rubber plantation project would help solve the problem of low rubber prices in the country, which has about 24 million rai of rubber plantation land.
The RAOT, if it agrees to lease the land, must ensure the contract does not allow the company to sublease it to others, he said.
The company's proposed contract must be vetted thoroughly by academics, Mr Uthai said, adding that authorities must ensure the contract could not be exploited by the firm.
Mr Yiam said the RAOT is unlikely to make a decision in regards to the proposal soon as the legal implications and other issues must be considered first.