Thailand's total rice stocks have fallen to one million tonnes from 5.6 million tonnes since the government introduced its price guarantee scheme last year, says Deputy Prime Minister Trairong Suwannakhiri.

Mr Trairong, who oversees economic affairs, said the remaining one million tonnes represented supplies which the government had promised to sell to Indonesia and Nigeria.

"The two countries expressed an interest in buying 500,000 tonnes each," he said.

"Still, the government will maintain stocks of up to 100,000 tonnes for the sake of national food security."
Mr Trairong said the dramatic drop in rice stocks followed the government's decision to release as much as possible of its rice to cut the burden of storage costs.

"We were spending more than 800 million baht a month, or over 10 billion baht a year, just on keeping rice stocks," he said.

The rice mortgage policy led to a build-up in the stocks, but when the government replaced the policy with a rice price guarantee, stocks fell off, he said.

The price guarantee allows farmers to sell on the market and the government makes no payment if the market price exceeds the announced guaranteed price.

If the market price fails to reach the guaranteed price, the farmer sells the rice and the government makes up the difference.

"Unlike the past, this policy does not force the government to keep a rice stockpile," he said.

Mr Trairong said the government had a new problem in that the number of registered farmers applying for payments under the price guarantee scheme was increasing markedly. The price guarantee under the regulation covers only 25 tonnes of rice for each registered farmer, no matter how much rice is produced.

Farmers who harvest more than 25 tonnes have used their children to claim the guarantee for the excess amount.

"We have no choice but to pay them," he said. That was why the budget earmarked for next year's guarantee had increased to 45 billion baht, up from 36 billion baht.

The reduction in the stocks could help shore up the rice price in the international market as Thailand was the world's largest rice exporter.

Korbsook Iamsuri, president of the Thai Rice Exporters Association, said the price of rice depended on several factors, including the output of other key producers and the global demand.

Source: Bangkok Post