Second subsidy aims to offset 25m tonnes

The National Rice Policy Committee is expected to launch its new subsidy scheme Monday for glutinous paddy and Pathum Thani fragrant paddy to buffer any impact on prices of a surge in supply of as much as 25 million tonnes in the next few months.

Teerapat Prayurasiddhi, Agriculture and Cooperatives Ministry permanent secretary, said the new supply of white paddy is the priority for discussion of Monday's meeting of the National Rice Policy Committee, chaired by Prime Minister Prayut Chan-o-cha.

Prices of white paddy recently dropped to between 7,200-7,500 baht per tonne, down from 9,400 baht per tonne in June, he said, adding that without suitable measures, the new supply could put more pressure on rice prices.

Wiboonlasana Ruamraksa, permanent secretary for commerce, said up to 25 million tonnes of paddy will be harvested in the next few months.

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Of the total, 10.7 million tonnes will be Hom Mali, followed by glutinous paddy and other varieties of white paddy.

The planned relief measure will focus on rice other than Hom Mali paddy for which the government has already issued subsidy measures.

The new measure will be similar to the current storage-pledging programme for Hom Mali paddy, which was approved last week by the cabinet.

Intended to encourage farmers to store rice in their own barns to delay releasing new supply to the market, the government will pay a subsidy of 13,000 baht per tonne to participating growers of Hom Mali grain.

Of the total, 9,500 baht, which is equal to 90% of the market price for the grain, is for farmers to store their paddy in barns for a certain period of time.

The remaining sum is for storage expenses and harvest and improvement costs.

Ms Wiboonlasana said the relief measures to be rolled out for growers of glutinous paddy and white paddy will be fair and comprehensive.

Ms Wiboonlasana said the rice committee has asked the Bank for Agriculture and Agricultural Cooperatives (BAAC) to calculate the benchmark prices for glutinous paddy and Pathum Thani paddy for the subsidy scheme.

She said the barn pledging prices are expected to be around 90% of the market price for the grains.

A source close to the rice committee said the relief measure will be proposed by the Commerce Ministry, which has already discussed it with the Finance Ministry, the Agriculture and Cooperatives Ministry and the BAAC.

The scheme, which targets farmers in the Central Plains and the North who grow glutinous and Pathum Thani fragrant rice, hopes to cushion against a further price slide which is anticipated if the farmers rush to sell.

More than half of the main crop for the 2016/2017 season will be harvested in November and December. Farmers are known to be in a hurry to sell their crop around this time of year to get money for the New Year.

According to the source, the BAAC initially agreed to offer 90% of the market price plus 1,500 baht for storage costs and another 2,000 baht for harvest and improvements.

On Sunday, Democrat Party member Warong Dejkitwikrom slammed former prime minister Yingluck Shinawatra for manipulating rice prices for her own party's political gains.

Dr Warong, a former MP for Phitsanulok who spearheaded a campaign against Ms Yingluck over the rice-pledging scheme, said Ms Yingluck's latest buy-and-sell stunt was to undermine the regime at the expense of the market.

The former premier brought 10 tonnes of milled rice she had purchased from farmers during her visit to a northeastern province for distribution at a shopping mall in Bangkok on Saturday.

The rice, offered at 20 baht a kilogramme, the same price at which she bought them from the growers, was sold out in an hour.

Dr Warong said the purchase of rice in the northeastern province had been staged for political advantage and was not really intended to help farmers.

No rice farmers showed up the next day and the grains she bought for sale were readily packed for distribution.

"Selling the milled Hom Mali rice at 20 baht/kg is putting pressure on rice prices in a cold-blooded manner, when the grain is being offered at 30-35 baht/kg," he said.

However, Pheu Thai acting deputy spokesman Anusorn Iamsa-ard hit back at the Democrat member, saying Ms Yingluck can never do right in Dr Warong's eyes.

Source:
courtesy of BANGKOK POST

by BANGKOK POST

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