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Srettha blocks rice price stability scheme

04 November 2023

The National Rice Policy Committee chaired by Prime Minister Srettha Thavisin yesterday rejected the Commerce Ministry's proposed measures worth 69 billion baht to stabilise rice prices for the 2023/24 harvest.

The committee instead instructed the ministry to revise the spending budget and hold off on a proposal to offer 1,000 baht per rai to farmers, which requires spending of up to 56.3 billion baht.

The committee also agreed to establish a tripartite committee consisting of representatives from the Commerce Ministry, the Agriculture and Cooperatives Ministry and farmers associations to examine reducing farmers' rice cultivation costs. The findings are to be proposed later to the committee for consideration and approval.

Speaking after the committee meeting, Commerce Minister Phumtham Wechayachai said the committee did not approve the measures, but did acknowledge that farmers should delay selling rice over the next few months as a glut enters the market.

Mr Phumtham said the committee instructed the ministry to improve the four measures: credit to delay paddy rice sales, credit for rice collection and value addition, interest rate compensation to entrepreneurs who agree to stock their purchased rice, and measures supporting agricultural producers' quality and management.

The revised measures could be presented at the next committee meeting in December.

He said the committee emphasised increasing the procurement role of agricultural cooperatives under the supervision of the Agriculture and Cooperatives Ministry, allowing them to purchase rice from farmers.

The Agriculture and Cooperatives Ministry reported up to 600 agricultural cooperatives have the potential to assist rice farmers in storing their produce at the beginning of the harvest season.

The Commerce Ministry measures worth 69 billion baht were meant to stabilise rice prices for the 2023/24 harvest, absorbing 14 million tonnes during periods of massive supply.

Those measures involve providing credit to delay rice sales, consolidating rice, compensation for stock holding and offering 1,000 baht per rai to farmers, benefiting 4.68 million households.

The credit to delay paddy rice sales aimed to absorb 3 million tonnes, with a budget of 10.1 billion baht. This included assistance for storage, paid at 1,500 baht per tonne.

Rice is expected to be stored in farmers' barns for 1-5 months, from Oct 1 through to Feb 29 next year. Farmers can use their rice as collateral for loans from the Bank for Agriculture and Agricultural Cooperatives.

Credit for rice collection and value addition targets 1 million tonnes with a budget of 481 million baht.

The interest rate compensation for entrepreneurs who agree to stock their purchased rice was meant to cover 10 million tonnes with a budget of 2.12 billion baht.

The state would subsidise an interest rate of 4% for stock storage periods lasting 2-6 months, with purchase periods from Nov 1 to March 31 next year.

The measures also included supporting farm management and agricultural development, benefiting 4.68 million households with a subsidy of 1,000 baht per rai, not exceeding 20 rai per household or a total of 20,000 baht. The budget allocated for this measure was 56.3 billion baht.

Source : bangkokpost