More thai farmers opting for guaranteed-income scheme

The number of farmers intending to join the guaranteed-income scheme for this year's second crop of rice has increased to 600,000, higher than the previously estimated 480,000. Bank for Agriculture and Agricultural Cooperatives president Luck Wajananawat yesterday said the BAAC had been screening applicants and that so far, 339,074 farmers were eligible for the guaranteed-income, or Na Prang, scheme, he said. The bank is supporting this and other measures to shore up farm product prices. "The income-insurance scheme has proved popular among rice farmers, with 72.3 per cent of those surveyed by the BAAC saying they |were satisfied. Only 17.2 per cent said the previous rice-pledging scheme was better," Luck said. Under the present scheme, which covers rice, cassava and maize, the government compensates farmers if the market price goes below the guaranteed price. The BAAC said in the first round, covering the 2009-10 crop, 3,71 million farmers were compensated Bt34.1 billion, with the highest amount, Bt26.97 billion, going to 3.1 million rice farmers, while Bt5.49 billion went to 369,130 maize farmers and Bt1.63 billion to 237,880 cassava growers. Luck said it was rather difficult to implement this scheme, because many farmers did not understand it, while several wanted the government to drop it and resume previous price-intervention schemes. One of the major problems with this scheme is the government's reference prices do not reflect the market price, which results in farmers losing out on compensation. Farmers are actually given the difference between the government's reference price and the guaranteed price, not the difference between the actual market price and the guaranteed price. Luck said the only way to solve this problem was for the government to agree to adjust reference prices at least four times a month, so that they reflected the actual market prices. He said the present dip in rice prices - caused by reports the government was planning |to release its stockpile - would be only temporary. The price of rice is bound to rise, due to high demand and low supply in the world market. Drought had also affected rice production in India, forcing that country to import the grain instead, Luck added.