The Thai Rice Exporters' Association and the Board of Trade of Thailand (BoT) will soon propose that the Commerce Ministry set up a Public Warehouse Organisation as an "import agency" to oversee rice imports once the Asean Free Trade Area (Afta) eliminates all import tariffs.

The proposal is aimed at preventing illegal imports of rice from other Asean countries with the aim of benefiting from Thailand's price-intervention programme.

Currently, both legally and illegally imported rice - the latter mainly from Cambodia - finds its way into the government's subsidy programme.

Thai rice exporters fear that the zero-tariff agreement under Afta will lead to an increase in the amount of illegally imported rice benefitting from the subsidy programme, which would directly affect Thai farmers. For this reason, they seek the creation of import-oversight agency with the power to set up stringent import restrictions and inspect all imported rice.

A source from the BoT said the agency would inspect every shipment of imported rice to prevent unscrupulous dealers from benefiting illegally from the government's rice-pledging programme.

The agency would allow rice to be imported only as a raw material for use in manufacturing  - not to be sold as a crop, the source said.

"To protect our farmers, we should not approve rice imports for any other purpose," the source added.

In addition, the agency should be empowered to determine who is allowed to import rice, and in what quantities, the source said.

The source also said the government should consider changing its crop-subsidy programme to give farmers direct cash payments to cover the difference between the pledging price and the market price.

"This would not only directly assist farmers but also reduce the government's loss from its huge stockpile every year," the source said.

However, if the government must implement a price-intervention programme, it should do so based on a fair price that does not lead to market distortions, as is the case now, the source said.

The government's rice price-intervention policy has prompted some Thai rice traders to illegally take advantage of the scheme by importing rice from neighbouring countries such as Cambodia. This illegally imported rice has been substituted for Thai rice in the rice-pledging programme. 

Source: The Nation