The National Rice Policy Committee approved a budget of 5 billion baht to buy up to half a million tonnes of paddy to shore up domestic prices that have plunged because of harvests in Vietnam.

The decision came as hundreds of farmers from the central region staged protests in Bangkok demanding the government buy high-moisture paddy at high prices as well as pay compensation of about 3,000 baht a tonne.

The committee told the Internal Trade Department, the Public Warehouse Organisation and the Bank for Agriculture and Agricultural Cooperatives (BAAC) to buy paddy from 10 provinces where paddy prices are very low, such as Phichit, Sukhothai and Suphan Buri.

The buying price will be 8,056 baht for paddy with 15% moisture content, 6,847.60 baht for 25% moisture and 6,243.40 baht for 30% moisture, said Yanyong Phuangrach, the permanent secretary of the Commerce Ministry.

As of March 31, the regular paddy price was 7,700 to 8,200 baht a tonne, down from 8,400 to 9,600 baht on Feb 28 and 8,500 to 9,000 baht on the same date in 2010.

Thai white rice with 5% moisture content in the global market was US$499 a tonne in March, down from $538 in February. Vietnamese rice was $460 a tonne in March, down from $475 the previous month.

Samien Hongtoh, chairman of the Farmers Network in the Central Region, said rice millers bought paddy with 25% moisture content at around 6,000 baht a tonne while farmers' costs exceeded 8,000 baht. He felt the government should buy this quality paddy at 8,500 baht a tonne, but other farmers may accept 7,800 baht a tonne.

The government should also compensate farmers by 2,944 baht a tonne and control the price of insecticide and fertiliser, the latter of which has already risen by 300 to 1,000 baht a tonne without any adjustment from the Commerce Ministry, he said.

Protestors are complaining paddy prices have plunged since the harvest in December, but the government refuses relief measures.

Somsak Changruanngam, a farmer in Suphan Buri with around 30 rai of land, said the production cost per rai was around 5,000 baht while the yield of around 700 kilogrammes a rai allows income of only 4,200 baht.

The current spread of brown planthoppers eating crops, coupled with volatile weather, could also depress harvests, he said.

The committee approved a budget of 103 million baht to offer a 2% interest rate to rice millers who buy paddy from farmers over the next three months until June, with an expectation that millers will purchase 2 million tonnes of paddy.

Deputy Prime Minister Trairong Suwankhiri said the committee also approved extending until the end of April a project encouraging farmers to deposit paddy in BAAC warehouses or keeping it in their own silos in exchange for 1,000 baht a tonne.

Since initiation of this project in January, it has recorded 196,808 tonnes of Hom Mali paddy deposited, 3,384 tonnes of provincial fragrant paddy, three tonnes of Pathum Thani paddy and 301.10 tonnes of glutinous paddy.

Source: Bangkok Post