Thailand to renew disputed rice scheme
Thailand’s rice exporters are expected to face harder times as the country’s government has pledged to renew its controversial rice-buying scheme for a third year, despite straining government finances and slashing exports as the grain has piled up in warehouses.
Experts have warned that the high-subsidy pledging scheme could result in less funding for infrastructure development and damage the rice industry’s growth in the long run.
The two-year old programme to pay farmers more for rice than it is worth on international markets has already cost Thailand its spot as world’s top exporter and provoked concern at the World Trade Organisation.
The government has spent $13.70 billion for buying paddy since the scheme kicked off in October 2011, and has been looking at measures to stem ballooning losses so far estimated by analysts and industry officials to be at least $6 billion.
Thai rice exports, which have become uncompetitively expensive compared to those from India and Vietnam, last year fell to 6.9 million tonnes from 2011′s record 10.6 million tonnes.
The Thailand Rice Exporters Association projects rice exports to decline a further 14 per cent from 2012 levels.
Rice traders fear the risk that the Thai government at some point will decide it can no longer afford the subsidy and dump its rice stocks on world markets, which would drive down global market prices sharply.
Thailand's rice exporters are expected to face harder times as the country's government has pledged to renew its controversial rice-buying scheme for a third year, despite straining government finances and slashing exports as the grain has piled up in warehouses. Experts have warned that the high-subsidy pledging scheme could result in less funding for infrastructure development and damage the rice industry's growth in the long run. The two-year old programme to pay farmers more for rice than it is worth on international markets has already cost Thailand its spot as world's top exporter and provoked concern at the World Trade...
Thailand’s rice exporters are expected to face harder times as the country’s government has pledged to renew its controversial rice-buying scheme for a third year, despite straining government finances and slashing exports as the grain has piled up in warehouses.
Experts have warned that the high-subsidy pledging scheme could result in less funding for infrastructure development and damage the rice industry’s growth in the long run.
The two-year old programme to pay farmers more for rice than it is worth on international markets has already cost Thailand its spot as world’s top exporter and provoked concern at the World Trade Organisation.
The government has spent $13.70 billion for buying paddy since the scheme kicked off in October 2011, and has been looking at measures to stem ballooning losses so far estimated by analysts and industry officials to be at least $6 billion.
Thai rice exports, which have become uncompetitively expensive compared to those from India and Vietnam, last year fell to 6.9 million tonnes from 2011′s record 10.6 million tonnes.
The Thailand Rice Exporters Association projects rice exports to decline a further 14 per cent from 2012 levels.
Rice traders fear the risk that the Thai government at some point will decide it can no longer afford the subsidy and dump its rice stocks on world markets, which would drive down global market prices sharply.
