The national rice policy committee chaired by Deputy Prime Minister Trairong Suwannakhiri agreed on a plan yesterday to raise benchmark prices for rice under its insurance programme.

The new benchmark prices would be based on local market prices the previous week, replacing the existing pricing structure based on average prices the past three years, current market prices and futures prices the next three months from the Agricultural Futures Exchange of Thailand (Afet).

Mr Trairong said the new benchmark prices as of yesterday would be 7,210 baht per tonne for 15% moisture paddy.

Farmers would be entitled to receive 2,790 baht per tonne in compensation from the government, as the benchmark is below the insured price of 10,000 baht.

In a bid to shore up paddy prices, the committee also directed the state-run Public Warehouse Organisation and the Marketing Organisation for Farmers to buy more paddy from farmers and offered incentives to lure millers to participate in the buying programme.

Authorities pledge to allow the millers to exchange new milled rice bought from farmers with milled rice from government stocks while the government would give them 500 baht a tonne for paddy processing so that they could have more available warehousing space.

However, the government will oblige millers to pay farmers 300 baht over the benchmark price.

Rice farmers are pressing their call for immediate help from the government, as domestic prices have fallen significantly on higher output, while foreign importers are delaying purchases on expectations prices will fall further.

Local paddy with 20% moisture is now quoted in the market at only 5,000 to 5,500 baht per tonne, with 15% moisture paddy at 7,000 baht. Before the Songkran festival, 20% moisture paddy was quoted at 5,800 to 6,300 baht, and 15% moisture at 8,000. The price of local milled rice has also fallen from 19,000 baht a tonne in December to 11,800 baht now.

Commerce Minister Porntiva Nakasai said earlier the government planned to buy as much as 900,000 tonnes of paddy from farmers in a move to raise prices in the Thai rice market. Price pressure is expected to increase as an estimated 1.8 million tonnes of rice from the second-crop season are being released to the market.

She said the government will spend 4 billion baht for its next scheme.

Source: Bangkok Post