The cabinet on Tuesday approved the National Rice Committee's proposal to replace the current paddy mortgage scheme with a price guarantee programme, said deputy government spokesman Vachara Kannikar.
The Agriculture and Cooperatives Ministry has been assigned to fix a suitable paddy price based on capital cost and a suitable return for farmers, and to quickly complete registration of farmers joining the rice price guarantee programme.
Sopan Manathanya, Managing Director of Chia Meng Marketing, a leading rice distributor, said rice export market is highly competitive this year. Some of the factors which have contributed to the tough market environment are the massive rice output and steep pledging prices announced by the government. The unrealistically high pledging prices make Thai rice too expensive when compared to other rice-producing countries.
Rice exporters have expressed their support to the government's plan to replace the rice pledging scheme with the price guarantee initiative. With the price guarantee, market mechanism will be left undistorted while farmers will be able to sell their rice at a fixed price.
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