Prime Minister Prayut Chan-o-cha said on Tuesday he has tried his best to convince businesses and cooperatives to buy rubber at higher prices, but that the government still can’t afford farmers’ demands for subsidies.
Rubber growers in Surat Thani rally at their provincial hall on Tuesday to demand higher rubber prices. (Photo by Supapong Chaolan)
Gen Prayut said that the government would supply low-interest loans to private companies and cooperatives to enable them to buy rubber at 60 baht per kilogramme, and firms were considering doing so.
The prime minister promised he would conclude talks with prospective buyers as soon as possible, as the government could not afford to buy rubber itself.
About 100 growers defied marital law to rally at Surat Thani provincial hall Tuesday, insisting the government purchase rubber sheets at 80 baht per kilogramme, twice the current market rate. They also called price of scrap rubber to rise to 30 baht per kilogramme and latex to 70 baht per kilogramme.
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Industry representatives also submitted a letter to Gen Prayut in Bangkok, suggesting the government issue bonds to cover the estimated 40-million-baht subsidy. If action isn't taken by month's end, rubber farmers threatened to march on the capital next year.
Gen Prayut agreed to consider using bonds to fund subsidies. He said officials from the Ministry of Agriculture and Cooperatives would work out solutions with industry representatives.
Prime Minister Prayut Chan-o-cha speaks to reporters after a cabinet meeting at Government House on Tuesday. (Photo by Chanat Katanyu)
As for whether southern farmer march in protest to Bangkok, the general said the decision was theirs, but protests would not sway his decision-making.
Deputy Agriculture and Cooperatives Minister Amnuay Patise on Tuesday ruled out the possibility of raising rubber prices to 80 baht per kilogramme as farmers want. He is positive, however, that a 60-baht price point was possible; noting the price of smoked rubber sheets already has hit 52 baht per kilogramme.
Thailand's benchmark unsmoked rubber sheet, which farmers sell to factories, was quoted at only 46 baht per kilogramme Tuesday.
"Rubber prices are even lower in neighbouring countries," Mr Amnuay pointed out. "This is the best we can do."
Pushing up prices of rubber sheets to 60 baht, however, will require cooperation from the private sector, Gen Prayut said. The government might need to provide more incentives to get businesses to buy at 60 baht/kg, he said.
For the time being, his government is trying to speed up the payment of cultivation subsidies of 1,000 baht per rai to farmers with 15 rai or less, he said. The government also is working on other measures to help rubber farmers.
The Agriculture and Cooperatives Ministry on Monday announced three other short-term measures to arrest plummeting rubber prices. They include government purchase of 6 billion baht in rubber products for exports and price support; credit worth 100,000 baht to be extended so planters can invest in a side jobs; and use of the 1999 Rubber Control Act to ensure stakeholders are treated fairly.