Thailand cuts rice subsidies

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Thai-rice-exportsThe Thai government under much criticism agreed on June 19 to cut the fixed price for its rice subsidy scheme from 15,000 to 12,000 baht per tonne, temporarily ending a long quarrel about the efficiency of the system and nearing the subsided price to world market levels.

An extraordinary meeting of the Thai cabinet agreed to reduce the pledging price for second crop paddy in the 2013 harvest season to 12,000 baht  as proposed by the National Rice Policy Committee. The reduction will take effect from July 1, 2013.

Furthermore, each rice farmer’s household has been limited to 500,000 baht.

Immediate protest came form the Thai Farmers Association, which said that  rice farmers, particularly those in the central plains, disagreed with the reduction, saying 12,000 baht per tonne for ordinary paddy is too low. However, the organisation itself had proposed a reduction on June 16 which adds to the confusion in Thai agriculture politics.

The Thai Rice Exporters Association welcomed the decision, saying it was good that the government had admitted its pledging price for rice was too high. Competitiveness of rice exporters would substantially improve, after rice exports were down by as much as 35 per cent over 2012 due to the high price of Thai rice.

The Thai harvests could produce as much as 28-29 million tonnes in 2013, the association said.

Potential losses from the rice pledging scheme are expected to exceed 300 billion baht ($10 billion) for three subsidised harvest periods since 2011. The government has so far only admitted that losses from the rice pledging scheme in the first harvest year 2011/12 amounted to 136 billion bath ($4.3 billion) after heavy criticism and facing complaints from villagers that rice stored in warehouses throughout the country was starting to rot.

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Reading Time: 2 minutes

The Thai government under much criticism agreed on June 19 to cut the fixed price for its rice subsidy scheme from 15,000 to 12,000 baht per tonne, temporarily ending a long quarrel about the efficiency of the system and nearing the subsided price to world market levels.

Reading Time: 2 minutes

Thai-rice-exportsThe Thai government under much criticism agreed on June 19 to cut the fixed price for its rice subsidy scheme from 15,000 to 12,000 baht per tonne, temporarily ending a long quarrel about the efficiency of the system and nearing the subsided price to world market levels.

An extraordinary meeting of the Thai cabinet agreed to reduce the pledging price for second crop paddy in the 2013 harvest season to 12,000 baht  as proposed by the National Rice Policy Committee. The reduction will take effect from July 1, 2013.

Furthermore, each rice farmer’s household has been limited to 500,000 baht.

Immediate protest came form the Thai Farmers Association, which said that  rice farmers, particularly those in the central plains, disagreed with the reduction, saying 12,000 baht per tonne for ordinary paddy is too low. However, the organisation itself had proposed a reduction on June 16 which adds to the confusion in Thai agriculture politics.

The Thai Rice Exporters Association welcomed the decision, saying it was good that the government had admitted its pledging price for rice was too high. Competitiveness of rice exporters would substantially improve, after rice exports were down by as much as 35 per cent over 2012 due to the high price of Thai rice.

The Thai harvests could produce as much as 28-29 million tonnes in 2013, the association said.

Potential losses from the rice pledging scheme are expected to exceed 300 billion baht ($10 billion) for three subsidised harvest periods since 2011. The government has so far only admitted that losses from the rice pledging scheme in the first harvest year 2011/12 amounted to 136 billion bath ($4.3 billion) after heavy criticism and facing complaints from villagers that rice stored in warehouses throughout the country was starting to rot.

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