Will buy 2.5m tonnes of paddy at fixed prices

POST REPORTERS

The government launched an off-season rice-pledging scheme to shore up paddy prices yesterday - an urgent move to avert a threatened blockade by farmers of four major roads tomorrow.

Farmers have called off the blockade for now, but gave Prime Minister Samak Sundaravej and his cabinet just one week to implement the scheme. They promised to block Phahon Yothin, Mittraphap, Phetkasem and Sukhumvit roads if it fails.

The prime minister yesterday called an urgent meeting with his ministers and decided to immediately launch the rice-pledging programme.

The three-month rice mortgage scheme will start today and be supervised by the Finance Ministry's Bank for Agriculture and Agricultural Cooperatives of Thailand (BAAC).

It will buy up to 2.5 million tonnes of grain. The price of paddy with 15% moisture is guaranteed at 14,000 per tonne, and 15% moisture sticky rice at 9,000 baht per tonne.

The price of unmilled rice has dropped from 13,000 to 10,500 baht per tonne and the price of glutinous rice from 8,000 to 6,000 baht per tonne.

Officials were ordered to sell 2.1 million tonnes of stockpiled rice to foreign markets so the government would have enough money for the programme.

BAAC manager Theerapong Tangtheerasunant said farmers would receive direct benefits because it would end the problem of middlemen lowering the price.

Vichian Puanglamchiak, a member of the Thai Rice Farmers Association, hailed the decision, saying the threatened blockade would not take place.

"As the government has shown its sincerity, we will postpone our road blockade," Mr Vichian said.

He was concerned whether the BAAC could run the scheme effectively.

Previously, the Public Warehouse Organisation (PWO), the marketing arm of the Commerce Ministry, bought rice from farmers.

"I don't know if the BAAC is familiar with the procedures. Normally, it is the PWO.The BAAC staff may have to learn the ropes," he said.

Ideally, the criteria and procedures for rice pledging should remain unchanged, he said.

"However, the association does not mean the government must buy all rice by tomorrow. We give them one week to get the scheme up and running. If the scheme cannot proceed by then, we will block the roads," he said.

Pramote Vanichanont, chief adviser to the Thai Rice Millers Association, said he was confident the BAAC will be able to implement the scheme.

The PWO had shown it was not capable of doing the job.

Mr Pramote backed the rice-pledging scheme even though it was not tabled at the National Rice Committee for consideration. "Mr Samak wants to stop the farmers' protest before it gets out of hand. As chairman of the rice committee I think he is authorised to make the call," he said.

Rice exporters warned the mortgage price set by the government is too high and would affect rice exports.

Rice Exporters Association president Chookiat Ophaswongse said an appropriate price was 12,000 baht per tonne.

He said rice prices in the world market have started to drop as exporters boost supply. Japan is poised to sell 300,000 tonnes of rice.

"It is risky to set such a high price because the situation is changing. If world market prices drop due to growing supply, Thai exporters will face competition as the local price mechanism is distorted," he said.

Apiradee Tantraporn, director-general of the Foreign Trade Department, said demand overseas is still high and Thai exporters will not be affected.

Rice exports for this year will exceed nine million tonnes.

By Bangkok Post On 5 June 2008

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