The Thai Rice Exporters Association on Wednesday raised the forecast for rice exports as the end of the state pledging scheme would help bring down prices.
The association said it expects the country to export 9 million tonnes of rice in 2014. This is 20 per cent more than the previously-estimated 7.5 million tonnes.
Rice exports fell in Thailand after the deposed government in October 2011 began buying rice from farmers at above market price, making export rates uncompetitive.
India overtook Thailand as the world’s top rice exporter in 2012 as the scheme, which was meant to help poor farmers, caused a hike in export prices.
The price of Thai 5-per cent broken rice reached US$650 per tonne in October 2011 while India was selling the grain overseas at far lower rates.
The Thai grain is now selling at between US$380 and US$385, while Vietnamese rice costs US$400-US$405.
Some 800,000 farmers were owed payment for months after the rice pledging scheme ran into financial trouble.
The scheme ended in February this year.
Thailand’s current military junta began paying money owed to the farmers after it seized power in a coup.
Thursday 5 June 2014
Thai farmers urge military govt to launch new rice support scheme
Rice farmers in Thailand are asking the military government to come up with a new market intervention scheme to stem the decline in prices of the grain.
The previous price-support scheme floated by former Prime Minister Yingluck Shinawatra ended in February after causing billions of dollars in losses to the government and leading to an estimated 90 billion baht (S$3.5 billion) in unpaid dues to farmers.
The Thai military, which seized power in May after months of political turmoil, is moving to pay the arrears. A senior finance ministry official said on Tuesday the ministry has secured a loan for 50 billion baht to pay farmers.
But farmers said more needed to be done for them. "We still need the government's price supporting scheme. It may not be the same as Yingluck's scheme, but it could be a new measure to help farmers when prices are falling," Prasit Boonchoey, head of the Thai Rice Farmers Association, told Reuters.
The previous price-support scheme floated by former Prime Minister Yingluck Shinawatra ended in February after causing billions of dollars in losses to the government and leading to an estimated 90 billion baht (S$3.5 billion) in unpaid dues to farmers.
The Thai military, which seized power in May after months of political turmoil, is moving to pay the arrears. A senior finance ministry official said on Tuesday the ministry has secured a loan for 50 billion baht to pay farmers.
But farmers said more needed to be done for them. "We still need the government's price supporting scheme. It may not be the same as Yingluck's scheme, but it could be a new measure to help farmers when prices are falling," Prasit Boonchoey, head of the Thai Rice Farmers Association, told Reuters.
Thailand Big demand at scheme’s loan auction
The 50-billion-baht loan facility of the Bank for Agriculture and Agricultural Cooperatives (BAAC) for paying rice farmers drew strong demand from local banks yesterday, with almost three times oversubscription and rates set lower than those of government bonds.
Chularat: Low rates are unprecedented
The state-backed farm bank's three-year term loans carry a slightly lower rate than the Bangkok Interbank Offered Rate of 2.2792%, marking the first state-enterprise bonds with a lower rate than comparable government bonds, said Chularat Suteethorn, director-general of the Public Debt Management Office.
The loans charge interest at 27 basis points lower than three-year government bonds.
Total demand at yesterday's term-loan auction was 145 billion baht. Twelve financial institutions took part, with the state's Government Savings Bank emerging as the winner.
The healthy demand reflected financial institutions' confidence in a return to normal after the military coup on May 22, in contrast with the problems faced by the former Yingluck Shinawatra government.
The rice-pledging scheme was at the heart of the previous government's agenda, but it also drew ire over hefty losses and corruption.
Finance permanent secretary Rungson Sriworasat recently said losses incurred from the pledging scheme over the previous five crops could be lower than 500 billion baht.
The Yingluck government was months behind schedule in repaying 92 billion baht to about 850,000 rice farmers, as its hands were tied by a caretaker status that gave it limited authority to borrow fresh funds.
The newly installed military junta has made pledging payments a priority as a pump-priming measure to alleviate farmers' financial burden and create a multiplier effect to boost the country's economic growth.
The BAAC, which bears responsibility for payments to farmers under the rice-pledging scheme, has paid out 40 billion baht to farmers in a week.
The Fiscal Policy Office has said payouts to rice farmers could boost the country's GDP by 0.2 percentage points this year.
Ms Chularat said the BAAC would draw down 30 billion baht of the 50-billion-baht loan facility on Friday and the remaining 20 billion on June 13.
Chularat: Low rates are unprecedented
The state-backed farm bank's three-year term loans carry a slightly lower rate than the Bangkok Interbank Offered Rate of 2.2792%, marking the first state-enterprise bonds with a lower rate than comparable government bonds, said Chularat Suteethorn, director-general of the Public Debt Management Office.
The loans charge interest at 27 basis points lower than three-year government bonds.
Total demand at yesterday's term-loan auction was 145 billion baht. Twelve financial institutions took part, with the state's Government Savings Bank emerging as the winner.
The healthy demand reflected financial institutions' confidence in a return to normal after the military coup on May 22, in contrast with the problems faced by the former Yingluck Shinawatra government.
The rice-pledging scheme was at the heart of the previous government's agenda, but it also drew ire over hefty losses and corruption.
Finance permanent secretary Rungson Sriworasat recently said losses incurred from the pledging scheme over the previous five crops could be lower than 500 billion baht.
The Yingluck government was months behind schedule in repaying 92 billion baht to about 850,000 rice farmers, as its hands were tied by a caretaker status that gave it limited authority to borrow fresh funds.
The newly installed military junta has made pledging payments a priority as a pump-priming measure to alleviate farmers' financial burden and create a multiplier effect to boost the country's economic growth.
The BAAC, which bears responsibility for payments to farmers under the rice-pledging scheme, has paid out 40 billion baht to farmers in a week.
The Fiscal Policy Office has said payouts to rice farmers could boost the country's GDP by 0.2 percentage points this year.
Ms Chularat said the BAAC would draw down 30 billion baht of the 50-billion-baht loan facility on Friday and the remaining 20 billion on June 13.
Monday 2 June 2014
Farmers call for new Thailand rice price pledge
Farming industry leaders have called on the National Council for Peace and Order (NCPO) to issue a policy guaranteeing rice sales at 10,000 baht per tonne for the next crop, amid fears the price of the grain is falling.
Growers made the demand after the NCPO began to pay long-overdue funds to farmers owed cash under the former government's rice pledging scheme, which guaranteed a rice price of 15,000 baht per tonne in 2011.
Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO to consider, to help farmers suffering as a result of low rice prices.
“We would be happy if the NCPO could guarantee our rice price at 10,000 baht per tonne for the next crop. Each farmer has invested at least 5,000 baht per rai,” Mr Songpon said.
"If not, we may suffer big losses from selling the rice, because the current market price is about 5,000-6,000 baht per tonne."
Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal. He argued the situation would improve if rice stockpiles were sold off.
According to Ministry of Finance inspectors, the rice-pledging project is projected to have cost the country 500 billion baht, while millions of tonnes of rice have disappeared from stocks.
Mr Songpon said the former government tried to sell a huge amount of rice stock, which forced the market price of the grain to drop.
In the long-term, he said the new government should draft a policy educating farmers on how to reduce the cost of rice production, while officials should also encourage so-called rice zoning, which promotes the planting of rice in certain areas to improve the quality of the product.
He said farmers are currently planting low-grade rice, because they want to produce enough yield to join the rice pledging scheme, but this is harming Thailand's reputation for producing premium-grade rice.
Ubonsak Bualuang-ngam, chairman of the Committee on Central Agriculture, said the next government should support co-operatives for farmers, to strengthen the farming industry.
Mr Ubonsak said the co-operative system empowers farmers to set their own prices and encourages them to plant more premium rice.
Reducing or eliminating the use of chemicals in rice production would help reduce the cost of production, he said, adding that organic rice zones must be developed to promote and support chemical-free rice and benefit people's health.
Growers made the demand after the NCPO began to pay long-overdue funds to farmers owed cash under the former government's rice pledging scheme, which guaranteed a rice price of 15,000 baht per tonne in 2011.
Songpon Poonsawat, chairman of the Council of Farmers in Ang Thong province, said his organisation would propose short-term assistance packages for the NCPO to consider, to help farmers suffering as a result of low rice prices.
“We would be happy if the NCPO could guarantee our rice price at 10,000 baht per tonne for the next crop. Each farmer has invested at least 5,000 baht per rai,” Mr Songpon said.
"If not, we may suffer big losses from selling the rice, because the current market price is about 5,000-6,000 baht per tonne."
Mr Songpon suggested the intervention be carried out for the next two crops, until the market price of rice returns to normal. He argued the situation would improve if rice stockpiles were sold off.
According to Ministry of Finance inspectors, the rice-pledging project is projected to have cost the country 500 billion baht, while millions of tonnes of rice have disappeared from stocks.
Mr Songpon said the former government tried to sell a huge amount of rice stock, which forced the market price of the grain to drop.
In the long-term, he said the new government should draft a policy educating farmers on how to reduce the cost of rice production, while officials should also encourage so-called rice zoning, which promotes the planting of rice in certain areas to improve the quality of the product.
He said farmers are currently planting low-grade rice, because they want to produce enough yield to join the rice pledging scheme, but this is harming Thailand's reputation for producing premium-grade rice.
Ubonsak Bualuang-ngam, chairman of the Committee on Central Agriculture, said the next government should support co-operatives for farmers, to strengthen the farming industry.
Mr Ubonsak said the co-operative system empowers farmers to set their own prices and encourages them to plant more premium rice.
Reducing or eliminating the use of chemicals in rice production would help reduce the cost of production, he said, adding that organic rice zones must be developed to promote and support chemical-free rice and benefit people's health.
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