Thai farmers want less for their rice

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rice ThaiThailand’s rice farmers, or at least their organisation Thai Farmers Association, have suggested the government cut the ceiling prices of the highly disputed rice pledging scheme to rein in heavy losses that occurred over the past two harvest seasons.

The association proposed to slash the ceiling price from 15,000 baht to 10,000 baht per tonne, starting from the next crop year, to relieve the country’s accumulated financial burden of up to $10 billion amid shrinking exports.

The losses from the scheme have already prompted rating agency Moody’s to warn Thailand that its credit rating faced a possible downgrade, an announcement seen as the final wake-up call for the Thai government to revamp its populist farming policy.

Thai rice exports plunged to 6.9 million tonnes in 2012 from a record 10.6 million in 2011, and India seized the title of top rice exporter from Thailand. The country is now sitting on around 17 million tonnes of hard-to-sell rice stockpiles.

Prasit Boonchoey, president of the Thai Farmers Association, said farmers were not happy with the prospect of a lower intervention price but they would accept it if it allowed the government to maintain the scheme.

Agriculture subsidies are common in industrialised nations around the world, with farm subsidies consuming some 38 per cent of the EU budget or around $65 billion a year, and the US spending $20 billion a year in direct farm subsidies.

However, the Thai rice pledging scheme has been criticised for being a populist measure by the ruling Pheu Thai coalition to keep farmers loyal, and also for being prone to fraud and corruption with reports saying that of the 15,000 baht for one tonne of rice one third gets “lost” on its way to the farmers through intermediaries and local officials.

A survey by Bangkok-based Nida Poll revealed on June 13 that 38.51 per cent of 1,249 interviewed Thai individuals nationwide said the government should modify the rice pledging price in accordance with market prices, but said the scheme should continue. Just 9.61 per cent of the respondents said the current policy should continue without any adjustment.

 

 

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Reading Time: 2 minutes

Thailand’s rice farmers, or at least their organisation Thai Farmers Association, have suggested the government cut the ceiling prices of the highly disputed rice pledging scheme to rein in heavy losses that occurred over the past two harvest seasons.

Reading Time: 2 minutes

rice ThaiThailand’s rice farmers, or at least their organisation Thai Farmers Association, have suggested the government cut the ceiling prices of the highly disputed rice pledging scheme to rein in heavy losses that occurred over the past two harvest seasons.

The association proposed to slash the ceiling price from 15,000 baht to 10,000 baht per tonne, starting from the next crop year, to relieve the country’s accumulated financial burden of up to $10 billion amid shrinking exports.

The losses from the scheme have already prompted rating agency Moody’s to warn Thailand that its credit rating faced a possible downgrade, an announcement seen as the final wake-up call for the Thai government to revamp its populist farming policy.

Thai rice exports plunged to 6.9 million tonnes in 2012 from a record 10.6 million in 2011, and India seized the title of top rice exporter from Thailand. The country is now sitting on around 17 million tonnes of hard-to-sell rice stockpiles.

Prasit Boonchoey, president of the Thai Farmers Association, said farmers were not happy with the prospect of a lower intervention price but they would accept it if it allowed the government to maintain the scheme.

Agriculture subsidies are common in industrialised nations around the world, with farm subsidies consuming some 38 per cent of the EU budget or around $65 billion a year, and the US spending $20 billion a year in direct farm subsidies.

However, the Thai rice pledging scheme has been criticised for being a populist measure by the ruling Pheu Thai coalition to keep farmers loyal, and also for being prone to fraud and corruption with reports saying that of the 15,000 baht for one tonne of rice one third gets “lost” on its way to the farmers through intermediaries and local officials.

A survey by Bangkok-based Nida Poll revealed on June 13 that 38.51 per cent of 1,249 interviewed Thai individuals nationwide said the government should modify the rice pledging price in accordance with market prices, but said the scheme should continue. Just 9.61 per cent of the respondents said the current policy should continue without any adjustment.

 

 

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