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The rice subsidy scheme by the government of General Prayut Chan-o-cha is being misused by politicians and it is hampering the development of the rice farming industry, the Thailand Development Research Institute (TDRI) said.
“Using taxpayers’ money to provide extra profit for farmers is against the principle of the scheme,” said Nipon Poapongsakorn, a distinguished fellow at the institute.
The scheme is operated by the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) and it was introduced in the 2019-2020 fiscal year to help stabilize prices for rice farmers that were hit by drought and strong Baht.
The Associate Professor told Thaan Settakij that the scheme was meant to help farmers when they are making losses and to make sure that they get a fair price, but politicians are using it to provide extra profit for their own benefits.
He also said the government should take up more debt for the scheme if it is still being misused.
He pointed out to the Cabinet’s decision on November 24 to temporarily extend the government debt ceiling from 30% to 35% for one year to pay for farmers within the scheme.
The decision gave the government another 155 billion Baht to spend as the original ceiling was set at 900 billion baht.
According to data from the National Rice Policy Committee, the budget for the rice subsidy program was worth 157.71 billion Baht over the past 3 fiscal years.
The budget was worth 20 billion Baht during the 2019-2020 fiscal year, 49 billion Baht in the 2020-2021 fiscal year and 88.71 billion Baht in the 2021-2022 fiscal year.
“The scheme is meant to help when rice price is low and they are already getting the differences between the selling price and the guaranteed price so there is no need to take on more debt for this,” he said.
“The government’s financial condition is currently unfavorable where they were even hesitating on the increase of the minimum wage,” he said.
Instead of taking in more debt to provide more subsidies, Niphon recommended for the government to provide more support in terms of lowering production costs for farmers and only helping them financially when they are making losses.
He said the amount of output per rai had stayed at the same level for the past 5-6 years and it is now lower than that of many countries in Asia, including Nepal and Bangladesh which is something that is alarming for Thailand.
“There is no need to take money from other schemes to provide more subsidies because it will to less competitiveness and our farmers will become even weaker,” he said.
Thailand’s rice production to increase from 27-28 million tonnes of paddy rice in the 2020-2021 harvest season to 30-32 million tonnes in 2021-2022.
The country exported 6.11 million tonnes of rice in 2021. For 2022, the country is expected to export 7 million tonnes while the Thai Baht remain weak at 35.86 per greenback on Thursday afternoon.