Listen to this story |
Despite concern over competitiveness, the price guarantee scheme for rice and 4 other types of crops will continue, the Ministry of Commerce said.
“The government has been implementing this scheme for the past 3 years and it will continue into its 4th year this year,” Commerce Minister Jurin Laksanawisit told parliament today.
“The ministry’s subcommittee on marketing which I have chaired had approved the scheme for rice and it will be introduced to the National Rice Policy Committee on September 8,” he said.
“If approved, the scheme will be forwarded to the Cabinet and it is expected to come in effect before the first round of payment which is expected to begin on October 15,” said.
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.
Jurin said the scheme is necessary because it is helping farmers, who produce rice, cassava, rubber, pal oil and corn for animal feeding, with the lower price of crops.
His comments came after an opposition MP asked him to clarify the continuation of the scheme.
The scheme is considered one of the successes of the Ministry of Commerce and is something that the government has been trumpeting about ahead of the expected general elections by Q1 2023.
Thailand is set to overtake Vietnam to be the 2nd largest exporter of rice in 2022 after exporting more than 3.5 million tonnes during the first half of this year, up 56.6% when compared to the same period last year and bringing in more than 60 billion Baht in revenue.
In comparison, Vietnam exported 2.77 million tonnes worth US$1.35 billion during the first five months of 2022.
The Ministry of Agriculture and Cooperatives’ export target for rice is 7-7.5million tonnes for 2022 compared 6.11 million tonnes in 2021 due to ample water supply, weaker Baht and stronger global demand for food.
The ministry also expects the global rice trade in 2022 to increase to 46.4 million tonnes, up 100,000 tonnes when compared to 2021.
An advisor to the Thai Rice Exporters Association, Chookiat Ophaswongse, said in March that he expects Thai rice prices to increase by 5% in the 2nd of 2022 because of the impacts from Russia’s invasion of Ukraine.
The price of Thai white rice (100% grade A) already increased from US$473 per tonne in January to $962 per tonne in May.
With the export of rice doing well and prices increasing, the Thailand Development Research Institute (TDRI) said last week that the government should reconsider the extension of the scheme.
Nipon Poapongsakorn, a distinguished fellow at TDRI, said on August 25 that politicians are abusing the scheme to provide extra profit for farmers in their constituency in a bid to gain votes for the next general election.
He said the scheme was meant to help farmers when they are making losses and to make sure that they get a fair price, not for politicians to give out more profit to gain more votes.
Nipon said prolonging the scheme will lower Thai farmers’ competitiveness where the amount of output per rai had stayed at the same level for the past 5-6 years and is now lower than that of many countries in Asia, including Nepal and Bangladesh.