Govt approves B73bn in help for rice farmers

Govt approves B73bn in help for rice farmers

A rice paddy in Chai Nat is pictured on July 13, 2017.  (Bangkok Post photo)
A rice paddy in Chai Nat is pictured on July 13, 2017. (Bangkok Post photo)

The government on Friday announced 73 billion baht in loans and handouts to help stabilise prices for rice farmers, a politically influential group whose heartland is in regions where opposition to the military junta is strongest.

Thailand's staple food has long been a factor in politics.

The announcement by the commerce ministry came a week after former prime minister Yingluck Shinawatra fled into exile ahead of a court verdict in a criminal negligence case over a rice subsidy scheme that cost billions of dollars.

The ministry said it would provide 52 billion baht in handouts to farmers and 21 billion baht in loans that will cover 3.7 million households. The programme will span the seasonal harvest from the start of November this year to the end of February 2018.

"This is to help take 2 million tonnes of rice from the market," Nuntawan Sakuntanaga, head of the commerce ministry's department of internal trade, told reporters.

The government introduced similar short-term loans and cash handouts for rice farmers last year that cost the state 76 billion baht to cover 4 million households during the same period.

"This subsidy programme is essentially similar to past rice subsidies introduced by previous governments," said Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand who is critical of subsidies.

"The bottom line is these cash handouts create more debt for farmers," Mr Somporn said.

After hitting a four-year high earlier this year, the price of benchmark Thai 5% broken white rice has tumbled by nearly 20% over the last two months to $372.50 per tonne, its lowest since April.

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