Thailand will shoulder huge losses when the import tariff for rice traded among Asean members is reduced to zero, due to the wide price gap between Thai rice and that grown in other countries, experts have warned.

A zero tariff will also cause major trouble in terms of cheaper rice being imported from neighbouring countries and finding its way into the Thai pledging system, as Thailand is the only nation in Asean that has a rice price-intervention programme to guarantee high prices for the country's  farmers.

Charoen Laothamatas, vice president of the Thai Rice Exporters Association, said the government should reconsider the decision to cut the import tariff for rice under the Asean Free Trade Agreement (Afta) to zero.

Asean members, with the exception of Indonesia, Malaysia and the Philippines, have agreed to bring the tariff down to zero next year.

"A big difference in the export price and production costs between Thai and other countries' rice growers would not only cause a 'circumvention' problem for the rice-pledging scheme, but also hit Thai farmers as Thai consumers may turn to other sources of rice if they find lower retail prices," he said.

Charoen said exporters had always been against the idea of including rice in the normal Afta tariff-reduction programme because Thailand has a subsidy programme.

The association will soon meet with the Foreign Trade Department to discuss ways to avoid these expected problems.

The government must have a measure to prevent rice flooding into the Kingdom as it is a sensitive product for the country, involving more than 14 million farming households, he said.

Suggestions include special safeguard measures against imports.

Charoen said that rice from Laos, Burma, Cambodia and Vietnam would flood into the country as their production costs are much lower than those of Thai farmers, while the guaranteed price for Thai rice is very high.

The production cost for Thai rice is about Bt7,000 per tonne, but for other countries it is only Bt3,000-Bt4,000.

If the government failed to introduce efficient measures to prevent advantage being taken of the pledging scheme, it would face a huge burden in having to purchase rice from other countries into the scheme, said Charoen.

He added that it was very difficult to prove whether rice was from Thai farmers or those in neighbouring countries.

The government is already facing maize 'circumvention' from neighbouring countries because of the high guaranteed price in the pledging scheme.

The zero tariff for rice would be effective for 11 types, including paddy rice, brown rice, Thai jasmine rice, polished rice and partly polished rice, sticky rice, husk rice and parboiled rice.

Chutima Bunyaphrasara, director-general of the Trade Negotiations Department, said the government would join hands with the private sector to prevent circumvention from other Asean members.

The government plans to launch automatic licensing to screen imported rice in terms of where it has come from and what it will be used for.

In addition, importers will be required to register with the authorities in order to protect the country against illegal imports.

Source: The Nation