Changing from the price-intervention policy to price-guarantee is not enough. The government's plan for Thai rice is to achieve price stability and sustainable marketing and production development by focusing more on fragrant rice and geographical indication rice.

As the world's top rice exporter, Thailand sells in the global market various kinds of rice - jasmine rice, white rice, broken rice and parboiled rice. Among them, only jasmine rice and geographical indication rice (GI rice) are unique to Thailand, without any export rivals.

Foreseeing the Kingdom's strength, the government through the Rice Policy Committee, has drawn up key strategies to promote Thai jasmine rice and GI rice to serve the growing market demand.

Thailand can also grow many types of rice that have high vitamins and special nutrition such as Sangyod rice (purple-coloured rice grown only in the Phatthalung province in the South), Sinlek rice (a biofortification crop with high iron), and riceburry.

These types of rice will enable access to more niche markets, particularly health-conscious consumers in the European Union. All the rice are the so-called GI rice

If the strategy proves successful, the government will not have to shoulder the burden of millions of tonnes of rice stocks every year anymore.

Particularly, budget loss of billions of baht from intervening in the price of farm crops will be significantly reduced.

The strategy could create an efficient marketing mechanism in the rice-trading system in the future.

So far, the government has handled about 6 million tonnes of rice stockpile, which came from the government's rice-pledging programme.

It is expected that the total loss from the price-intervention measure for rice would reach about Bt120 billion. The total government spending in the price-intervention programme for rice, cassava, maize and shrimp reached Bt157 billion.

Under the rice committee's plan, the government will push hard to convince farmers to grow more of the unique rice. Increasing production of those types, particularly jasmine rice, will reduce the government risk from the fluctuating price of white rice.

However, the plantation area of jasmine rice in Thailand is limited only to seven provinces of the Northeast, around "Thung Kula Rong Hai", the drought-prone area which has the special soil quality to grow jasmine rice. This unique Thai rice yields only the main crop due to lack of water. In addition, farmers in the region have harvested sticky rice every year as their main menu.

To increase jasmine-rice production, the government will focus more on zoning and turn sticky-rice plantation areas to jasmine-rice farm. 

Normally, people living in the Northeast and the North mainly consume sticky rice as their main dish.
Questions will be raised about the source of supply of sticky rice? The government has foreseen that it should be grown in the North instead as the rice also grows well there. Having more of the unique jasmine rice and GI rice will enable Thailand to manage the pricing.

A source from the committee said the special Thai rice, particularly jasmine rice, have a 30 per cent share in the world's premium-rice trading. Moreover, the trading value of the fragrant rice accounts for 70 per cent of the Kingdom's total rice export value.

The government's stockpile is mainly white rice. Releasing even 100,000 tonnes will affect domestic price and the farmers.

"We [the government] have to consider a system that will not hit farmers whenever we have to release our stockpile," said the same source.

The government plans to encourage farmers to concentrate on planting high-priced rice - not only jasmine rice and GI rice but also 100-per-cent rice. They can export to high-end markets instead of competing with other export rivals in white rice, where the prices tend to fluctuate.

Chutima Bunyapraphasara, director-general of the Foreign Trade Department, said the committee also considered a new marketing strategy to replace the bidding practice. They found that the best way to shore up the local rice price was to focus on government-to-government contracts, which is the way to push rice stocks out of the country.

In the bidding practice, rice would not be exported but may circulate in the country. As a result, it will not solve the problem of oversupply and will pull down domestic rice prices.

Moreover, it is very difficult to ensure that the government would get a fair market price from the bidding as it would depend on the quality of rice in each lot.

"Rice trading is rapidly changing with newcomers, including traders, warehouse operators and millers involved in the system. The government has to draw up practices that would ensure maximum benefit goes to farmers," Chutima said.

The rice committee's principle to release its stock has focused on three key practices: n The stockpile release should not affect the domestic price.

The scheme should not hit market share of Thai rice in the international market.

It should reduce government expenses and cut losses.

Chutima pointed out that a good time to release the stockpile had passed, which was last month as India extended its export ban and Vietnam has nearly run out of stock.

"We have to formulate a realistic policy to reduce not only the subsidy but also the government loss," said a source at the Commerce Ministry.

The source at the ministry added that the government's change from intervention in rice to paddy rice will reduce its cost and make it more flexible to improve rice quality.

For instance, stocking paddy rice will allow the government to produce parboiled rice due to market demand. In addition, the government's expense will be to pay rice millers for polishing its rice instead of quality maintenance.

The most important change is the government has shifted its focus from price-pledging to guaranteed price, which would allow farmers to forecast their future income.

Source: The Nation