Farmers have welcomed benchmark prices for paddy set under a new subsidy scheme for the main 2009-10 crop, but asked the government to raise the amount of paddy that the scheme would cover.

Prasit Bunchoei, chairman of the Thai Rice Farmers Association, favours a limit of 20 tonnes per farmer from 16 tonnes now planned.

Officials on Monday set a benchmark price of 10,000 baht per tonne for 15%-moisture white rice paddy under the new subsidy scheme.

The benchmark price for Thai Hom Mali paddy was set at 15,300 baht per tonne, with general fragrant paddy at 14,800 baht and Pathum Thani at 10,000 baht. The prices were higher than farmers' production costs which were estimated at 6,000 to 7,000 baht per rai for white rice and 11,096 baht for Thai Hom Mali.

This buying price covers all costs of production and allows farmers to have around 30-40% profit, according to Apichart Jongsakul, secretary general of the Office of Agricultural Economy under the Agriculture Ministry.

The prices would be submitted for cabinet approval next week if the National Rice Policy Committee approves them today. The new programme could start in November, when harvesting of the main crop begins.

The government will guarantee farmers the prices quoted. If they sell rice to millers or exporters at lower than the official price, the government will pay them the difference. The scheme replaces a decades-old intervention programme under which the government bought rice directly from farmers to support their livelihoods and held it in stockpiles.

The proposed new guaranteed price is 15% lower than the intervention price of 11,800 baht now being paid for paddy. That scheme is due to expire on July 31. The government is estimated to hold the equivalent of 6 million tonnes of milled rice, a record high.

Officials are expected to hold tenders to sell 500,000 tonnes of milled rice and around 600,000 tonnes of paddy rice to exporters in August.

Thailand is expected to produce 23.5 million tonnes of paddy in the 2009-10 crop, according to Agriculture Ministry data.

In a related development, the government's plan to sell 550,000 tonnes of its 1.1-million-tonne maize stock yesterday drew a very heavy response from bidders. Of the amount earmarked for sale, 500,000 tonnes would be sold to exporters and the remaining 50,000 tonnes to small-scale farmers' groups and community enterprises.

Five exporters yesterday offered to buy the government's stock destined for export at prices ranging from two to 4.80 baht per kilogramme, with 80 bidders proposing purchases for local consumption at a maximum price of 5.78 baht per kg.

The market price is currently less than six baht per kilogramme. Authorities will announce the winning bidders for maize today.

Source: Bangkok Post