The government's rice mortgage scheme would boost rice prices so less than 15 million tonnes of paddy would have to be mortgaged by farmers, says Commerce Minister Kittiratt Na-Ranong.

As a result, the cost of the rice price pledging programme would be less than the previously estimated 430 billion baht, he said.

But Banjong Tangchitwattanakul, vice-chairman of the Thai Rice Mill Association believed only about 10 million tonnes would enter the programme.

Rice millers have said that if such a small volume could drive up market prices, it could indicate the programme is run successfully.

"If exporters try to kill the project by dumping market rice, it would eventually result in a large amount of paddy entering the mortgage scheme, which offers prices higher than the market," he said.

Mr Banjong has called for the government to examine the volume of rice to be pledged as he believed the figures might be inflated.

The government has invited farmers to pledge all grains from the 2011/2012 crop and part of this year's crop.

Mr Kittiratt said the 430 billion baht budget is not a one-off payment but the state would gain it back when selling the milled rice.

The minister yesterday called a meeting with 400 rice millers and traders taking part in the programme.

He instructed millers to accept all amounts pledged by farmers even it might be higher than the reported figures.

"The Commerce Ministry will examine whether pledged paddy belongs to farmers," said Mr Kittiratt.

The Agriculture and Cooperatives Ministry says the first batch of paddy to enter the programme could be that harvested during August and September and could reach 3.6 million tonnes.

Up to 3.2 million of farm households have registered with the Agriculture and Cooperatives Ministry to bring paddy they planted on nearly 60 million rai to pledge with the state, from tomorrow, when the government's rice pledging scheme starts, until the end of February.

Source: Bangkok Post