Rice to the occasion: Thai government shells out 55 billion baht for price stability

The Thai government sanctioned measures totalling 55 billion baht to secure stable rice prices for the 2023 to 2024 harvest season, as confirmed yesterday by Commerce Minister Phumtham Wechayachai. The approved strategy includes providing loans to farmers to withhold the sale of their paddy rice for five months and to agricultural cooperatives for market intervention until prices improve.

Farmers who participate in the deferred sale scheme will receive 12,000 baht per tonne from the government, plus an additional 1,500 baht per tonne for storage. The goal is to absorb 3 million tonnes under this plan.

As part of the market intervention measure, the government will support agricultural cooperatives in purchasing Thai hom mali fragrant rice at 12,200 baht per tonne, to absorb 1 million tonnes. The two measures will require the government to spend approximately 55 billion baht.

The National Rice Policy Committee (NRPC) will need to approve a prior measure to promote rice quality at 1,000 baht per rai, capped at 20 rai per household, with a proposed budget of 56 billion baht, according to Phumtham. He also affirmed the government’s commitment to offering 1,000 baht per rai to farmers but acknowledged the struggle to find an appropriate format, reported Bangkok Post.

Government spokesperson Chai Wacharonke revealed the government’s plans to reform its rice price intervention strategy for the upcoming harvest season. The proposed modifications aim to boost farmers’ income by cutting back on subsidies. The revised policy will need to be discussed with farmers regarding improvements in production efficiency or the implementation of technological solutions.

Chai also mentioned that the current market price for hom mali paddy rice is around 14,800 to 15,000 baht per tonne with a 15% moisture level. However, the moisture level typically rises to 25% after the harvest, leading to selling prices of approximately 12,000 to 12,300 baht per tonne. The existing market price is only 11,000 baht per tonne, which is deemed lower than a fair price.

Surplus rice

With this in mind, the Agriculture and Cooperatives and the Commerce Ministry have proposed two measures to intervene in the market to absorb surplus rice and drive up prices.

In a related development, the Cabinet approved two measures yesterday to stabilise animal feed corn prices for the 2023 to 2024 harvest season, allocating a budget of 65.1 million baht.

The budget will support agricultural institutions and businesses in buying and storing animal feed corn, stabilising prices during periods of high supply. The measures also include interest rate subsidies for these institutions and businesses to maintain their stocks for 60 to 120 days to manage excess supply.

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