Rice price subsidy set at B11,525 a tonne

Rice price subsidy set at B11,525 a tonne

Commerce Minister Apiradee Tantraporn, left, announces assistance for rice growers at Government House on Monday. (Photo by Thanarak Khunton)
Commerce Minister Apiradee Tantraporn, left, announces assistance for rice growers at Government House on Monday. (Photo by Thanarak Khunton)

The Rice Board has set the price the government will pay farmers under its barn programme at 11,525 baht a tonne for hom mali paddy compared to the market price of around 9,000 baht.

Commerce Minister Apiradi Tantraporn said on Monday that the price was for hom mali fragrant paddy with 15% moisture content. The cabinet was likely to approve the assistance on Tuesday, she said.

The price was calculated based on three forms of subsidy. The first 8,730 baht is for a tonne of grain, equivalent to 90% of the market price at around 9,700 baht.

Second is a subsidy for harvesting and rice improvement costs, at 500 baht a rai and not more than 10 rai per household.

Third is the subsidy for barn storage of 1,500 baht per rai but not more than 10 rai per household. The first 1,000 baht will be paid immediately and the remaining 500 baht will be paid when the rice is sold. Farmers with no barns of their own will not receive the third type of subsidy.  

Mrs Apiradi attributed low rice prices to worldwide oversupply and lower demand. The global rice yield rose 2.4% due to promising rain while worldwide demand dropped by 1.5%, she said.

She estimated this year's Thai hom mali rice output at 10 million tonnes, up from an earlier forecast of 8-9 million tonnes. Some 10% of the output will hit the market in October, 80% in November and the rest in December.

Authorities will also try to sell more rice through talks with foreign buyers and government-to-government deals such as with China and Iran.

As well, farm innovation institutions will also be set up to add more value, from 20% at present.

Mrs Apiradee also encouraged farmers' groups to sell their rice online directly to consumers so they can fetch higher prices, instead of through millers. 

Khwanchai Mahachuenjai, a leader of the rice farmers' organisation in Ayutthaya province, said on Monday that white rice paddy prices ranged from 4,500-5,000 baht a tonne in the Central Plains and the Northeast.

He blamed the low prices on rice traders and millers.

Col Sirichan Ngathong, deputy spokesperson of the National Council for Peace and Order, said on Monday that present rice prices were abnormal and there might be attempts to intervene market mechanisms for political purposes.

This government's answer to the costly rice-pledging programme of its predecessor is a barn-pledging scheme.

Although the methods are similar, a key difference is the government only subsidises the interest a state bank should have received for the loans to farmers.

Growers also keep the grain in their barns instead of at contracted warehouses like in the rice-pledging programme. There are also restrictions which limit the number of farmers eligible for the subsidy to effectively one third of all farmers, unlike the "buy-every-grain" pledge of the Yingluck Shinawatra government. 

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