Farm plan won't work
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Farm plan won't work

Despite much criticism, the cabinet has decided to go ahead with its expensive fertiliser co-payment scheme.

The scheme -- which will use almost 30 billion baht in state funding -- will subsidise fertiliser costs at a rate of 500 baht per rai for farmers with a maximum of 20 rai for the 2024/25 planting season. It is to run from July 15 to the end of May next year.

Eligible farmers can buy the fertiliser from stores that are registered with state agencies. The purchases must be limited to 15 state-determined fertiliser formulas -- while sales prices must not exceed market prices.

Government spokesman Chai Wacharonke said the new subsidy will help reduce production costs -- and it's expected that this will raise rice production by 10% when the harvest season comes.

At a glance, such requirements and the anticipated outcome look acceptable. Only small-scale farmers are able to join the scheme, and there is a price control mechanism and system as the farmers are required to make an application to the Bank for Agriculture and Agricultural Cooperatives when making a purchase.

However, upon closer examination, one finds that the merits of the new subsidy are debatable. The concerns begin with the scheme's source of funding, which is the state's central budget -- a type of expenditure that has scant parliamentary scrutiny.

This is because it is a budget that is set aside specifically for emergency matters. It's baffling how such assistance could be in this category -- or could this just be a tactic to evade examination in the checks-and-balance system? It's a political tradition that farm subsidies take a large chunk of the state budget in every administration, as the subsidy is part of efforts to win political gains. Whether this is cost-efficient is another story.

More importantly, the scheme's opponents raise a crucial question: are farmers the real beneficiaries of this expensive subsidy? Or is it a group of agro giants? The BioThai Foundation, a non-profit organisation advocating for biodiversity and sustainability, pointed out that the fertiliser market is dominated by a few major mega agro-businesses. People do not need a scientist's brain to figure out whose pockets the subsidy money will end up in.

Besides, there are concerns about state-determined fertiliser formulas. BioThai, citing studies by several international institutes, notes that Thailand has been overly applying chemical fertilisers. In addition to negative effects on the environment, the excessive use of such fertilisers may no longer ensure high yields in comparison to production input. There is little chance for farmers to become self-reliant under such circumstances.

The new scheme could be an example of bad budgeting, as recently mentioned by the main opposition Move Forward Party, which said there is a lack of what is termed strategic expenditure, with the aim to maximise outcome, not to mention the failure to observe budgeting rules.

Of course, farm subsidies are still necessary. But the government is obliged to give genuine assistance to those in this sector with a view to structural changes, namely helping them to regain their land, improving irrigation, and providing farm infrastructure necessary for organic farming -- an environmentally friendly mode of agriculture.

The help given, akin to a very expensive band-aid, will not improve farmers' situation. At the end of the day, they will find themselves trapped in the same cycle of debt and poverty.

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