The government wants to bring down the current one-tonne per person limit on milled rice importing to stop local traders smuggling rice to cash in on the government's pledging scheme.

Smuggling is on the rise because the government's rice-pledging programme sets high guaranteed prices, said Yanyong Phuangrach, the director-general of the Internal Trade Department.

Currently, Thai 5% paddy is priced at about 10,000 baht per tonne, while the pledging price is 11,800 baht per tonne. Similar grains are only 6,000 baht per tonne in Cambodia and between 7,000 and 7,500 baht in Vietnam.

Chookiat Ophaswongse, president of the Thai Rice Exporters Association, said about 100,000 tonnes both of milled rice and of paddy were imported across land borders, mostly carried by hired workers.

Under current customs regulations, each person can bring no more than 1 tonne of rice across Thailand's borders. Some traders therefore hire workers to carry rice from neighbouring countries into the Kingdom.

The association has proposed restricting milled rice imports to only 100 kilogrammes per person, to combat smuggling more effectively.

Related agencies would later discuss amending regulations and the appropriate size of the cut, said Mr Yanyong.

He also pledged to implement stringent border controls through co-operation with the army, police and relevant state agencies to beef up surveillance along borders.

Rice smuggling from neighbouring countries is currently a critical issue for the government as Thailand is due to liberalise trade in rice next year.

Under Thailand's commitment to the Asean Free Trade Area (Afta) agreement, import tariffs on milled rice and paddy will be cut to zero.

The government has agreed to set stringent sanitary standards in rice import regulations and to maintain stringent border controls to ensure Thailand stays competitive once Asean liberalises trade in rice in 2010.

Commerce Minister Porntiva Nakasai said recently that the government was concerned about preserving the quality of Thai rice, and is aware of the danger of lower-quality rice from neighbours being combined with Thai rice.

The minister said she has instructed the Foreign Trade Department to organise a public hearing tomorrow to ensure that the regulation of rice trading among Asean countries is fair to all.

Source: Bangkok Post