Thailand to prop up rice paddy price

[Admin]

Thailand to prop up rice paddy price 
Bangkok Post: 30 Mar 2010
Commerce plans to increase paddy price
B200 jump per tonne to appease farmers

The Commerce Ministry will propose increasing the buying price of paddy by 200 baht a tonne to shore-up grain prices and support farmers, Commerce Minister borntiva Nakasai says.

The ministry wants to increase the purchasing price of white-rice paddy with 15% moisture to 9,233 baht a tonne as a supplementary measure. Its previous initiative - buying 20,000 tonnes of the grain from farmers at market prices - has failed to increase the price of paddy.

The ministry will also seek cabinet approval to establish an exchange where farmers can swap their new-crop paddy for rice from the government's stock pile which they can then sell in the domestic market.

Mrs borntiva said the exchange ratio would have to be determined carefully so the government's rice stock would be worth more than the paddy to prevent criticism that the scheme favoured millers or rice packers over farmers.

The ministry will first discuss the matter with Prime Minister Abhisit Vejjajiva before submitting the two measure for cabinet approval.

"We want to informally discuss the matter with the prime minister before submitting a formal proposal based on information gathered from various parties in the rice industry," she said.

"We need to move quickly because the low paddy price may lead to protests from farmers. We may be blamed for only solving political problems rather than finding solutions for farmers."

Mr Abhisit earlier rejected the idea of buying paddy at higher-than-market prices because the policy contradicted the current rice-option plan.

Under the option plan, farmers are compensated for the difference between guaranteed rice prices and benchmark prices. If the benchmark price is lower than the guaranteed price, the ministry will compensate farmers the difference.

The ministry will this week begin selling rice through government-to-government deals starting with Malaysia. The neighbouring country used to buy up to 500,000 tonnes of Thai rice a year, but that has fallen to 100,000 tonnes as it purchases cheaper grains from sources such as Vietnam.

"At the moment, the ministry will release the government's rice stock only through government-to-government deals," Mrs borntiva said.

The ministry plans to sell to at least one million tonnes of rice from its 5-million-tonne stockpile through deals with more than 10 governments, such as Bangladesh, Indonesia, Singapore, Iran, United Arab Emirates, Libya, Ghana, India, Untied States, Australia and South Africa.

Cabinet approval will also be sought for the signing of a memorandum of understanding with the Philippines which agreed to waive import duty on 367,000 tonnes of Thai rice as compensation for its failure to comply with tariff reductions under the Asean Free Trade Area agreement.

http://www.bangkokpost.com/business/economics/35283/commerce-plans-to-increase-paddy-price

[Admin]

Thai farmers support new crop guarantee 
Bangkok Post: 2 Apr 2010
Farmers give support to price insurance scheme

The government's farm income guarantee scheme has won approval from farmers, a university survey reveals.

Support for the crop-price insurance programme came despite calls from certain groups of farmers and millers to scrap the scheme and return to the former price-pledging policy.

But the majority of farmers, 61.4%, would prefer a joint implementation of the pledging and price insurance programmes, according to a survey by the University of the Thai Chamber of Commerce (UTCC) of 2,019 farmers nationwide. It said 49.1% of the respondents were satisfied with the government's price insurance scheme. Just 21.9% preferred the former pledging scheme.

The Democrat-led coalition first introduced the crop insurance or options programme for the 2009-10 harvest to manage key crop prices and guarantee farm incomes.

It replaces a pledging scheme used by successive governments that offered high prices and proved to be politically popular in rural communities.

The new price insurance scheme is a form of income support paid directly to farmers. Payments are based on the difference between insured prices and benchmark prices, regardless of market prices when farmers sell their crop.

The insured prices are based on average costs and a 30% to 40% profit margin. The benchmark prices are based on the weighted average wholesale prices of rice in Bangkok equivalent to paddy with less than 15% moisture content.

The benchmark price is set on the first and sixteenth days of each month.

The programme is designed to benefit all farmers, particularly small-scale operators.

Compensation will be transferred directly to farmers by the Bank for Agriculture and Agricultural Co-operatives (BAAC). Farmers will manage their own sales decisions in terms of when to capitalise on the spread between the insured price and the benchmark price.

The survey found 38.6% opted to sell their output immediately after harvest, with 32.9% selling part of their harvest and 13.4% keeping their stocks and waiting for higher prices.

Thanavath Phonvichai, a UTCC economist, said the survey also found the new state programme was burdened with complicated and unfriendly procedures, late payments and problems selling the grain to millers who refused to participate in the scheme.

http://www.bangkokpost.com/business/economics/35455/farmers-give-support-to-price-insurance-scheme

[nookiebear]

Another classic case of The Chinese Rice Barons screwing the Thai Farmers