PM rules out rubber price subsidy

PM rules out rubber price subsidy

The government says it will not meet rubber farmers' request for a price subsidy of 50-60 baht a kilogramme due to budget constraints.

If granted, the required budget would be as high as 140 billion baht, all for just temporary relief, Maj Gen Sansern Kaewkamnerd, a spokesman to the Prime Minister's Office, said on Saturday.

"The prime minister feels uneasy about the planters' threats to protest. Demonstrations are illegal and granting them their wish is only a temporary remedy," he said.

Rubber prices have plummeted steadily over the past two years. The price of raw sheets at the Songkhla market fell two satang to 34.03 baht a kilogramme on Friday, while that of ribbed smoked sheets rose 51 satang to 34.63 baht. Prices were above 100 baht a kg in 2011.

The government has responsibilities to look after other groups of farmers, as well as 67 million people. Therefore, rubber planters should be open-minded and join the government in finding sustainable solutions, Maj Gen Sansern said.

Representatives from all stakeholders — planters, buyers and government officials — came to a conclusion on how to address the problem on Thursday, he said.

"The ongoing price slump was a result of many factors such as falling world oil prices and an oversupply caused by excessive promotion [of planting] in the past," he said.

He repeated Gen Prayut Chan-o-cha's call for rubber farmers to grow other crops or raise animals for supplementary income and pledged full government support for such efforts.

"As for the demand that we use more rubber for roads or playgrounds, the government has already done that but construction takes time," said Maj Gen Sansern.

"The prime minister therefore asked for their cooperation by not staging protests and promised to speed up relief measures, prevent prices for falling further and to try to raise them when the right time comes."

Also on Saturday, the Southern Rubber Planters Network said its members would meet in Trang next week to press their case for government assistance. Taking part will be farmers from Phangnga, Krabi, Phuket, Ranong, Phattalung, Songkhla, Nakhon Si Thammarat and Satun.

"This is not a protest, just a meeting, and we have already submitted a request to assemble to Trang's security officials," said a spokesman.

The group has four agenda items for the meeting. First, it wants the Rubber Authority of Thailand to buy rubber directly from farmers or through bodies that are ready to fill Chinese government-to-government orders.

It also wants to ask the government why the new rubber board, for which it has proposed two candidates, has not been appointed. It also wants to speed up selection of a governor for the Rubber Authority of Thailand.

Finally, it wants the government to use the remaining 397,000 tonnes of rubber stocks locally as stipulated by a cabinet resolution on Nov 30.

A network of small rubber planters in Trang, led by Saksarit Sriprasart, also said its members would hold a hunger strike starting Monday.

Global demand for natural rubber is slowing as the economy cools in China. Supplies are expanding after a decade-long rally in prices to a record in 2011 encouraged top producers like Thailand, Indonesia and Vietnam to plant more trees. Output will exceed demand for two more years, with the surplus quadrupling in 2016, according to The Rubber Economist Ltd, a London-based industry researcher.

The export price from Thailand, the top producer, is down 23%. Global production is set to exceed demand by 411,000 tonnes next year and by 430,000 tonnes in 2017, compared with a surplus of 98,000 tonnes in 2015.

The government in November approved 13 billion baht to support farmers. Land owners and their workers will get a combined 1,500 baht a rai for plantations up to 15 rai. About 80% of growers own 25 rai or less. An additional 5 billion baht was approved in December for producers who pursue alternative employment.

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