The National Rice Policy Committee today will consider a request by farmers for a higher benchmark price for rice under the insurance programme in the 2010-11 crop year to reflect rising costs.

Deputy Prime Minister Trairong Suwankhiri said farmers in Ayutthaya had complained that their costs were higher for fertiliser, rental fees, transport and other expenses so their income and profit had been diminished.

The committee earlier set the price based on a 40% profit margin for farmers producing the main crop and 20% for the second crop. If the market price stays below the benchmark, farmers are compensated for the difference.

Tharadol Piempongsan, a deputy secretary-general to Prime Minister Abhisit Vejjajiva, said farmers wanted the price of paddy with 15% moisture content to be set at 14,000 baht per tonne, up from 10,000 baht.

The Agricultural Economics Office surveyed average production costs of paddy in the second crop of 2010-11 last month and found that it was 7,505 baht a tonne for Pathum Thani I paddy, 7,850 baht for regular paddy, and 7,325 baht for glutinous paddy.

Farmers in Ayutthaya said the costs ranged between 9,420 and 10,520 baht a tonne.

However, the agency admitted that production cost per tonne this year had risen by 1,162 baht for Pathum Thani I, 1,283 baht for regular paddy and 486 baht for glutinous paddy.

Therefore, the agency proposed raising benchmark prices by adding a margin of between 30% and 50%, instead of 40%.

It proposed prices at 10,000 to 11,600 baht per tonne for Pathum Thani I, 10,500 to 12,100 baht for paddy and 9,700 to 11,200 baht for glutinous paddy.

Insured volumes will also change from 25 tonnes per farm family to 33-46 tonnes for Pathum Thani, 28-42 tonnes for paddy and 22-33 tonnes for glutinous paddy.

Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said paddy prices had dropped because of Vietnam's dong devaluation since mid-Feburary.

As well, Vietnam will have rice production of around 1.2 million tonnes during this period.

The ministry may propose that the government approve measures to shore up domestic paddy prices by purchasing up to 2 million tonnes of paddy.

Source: Bangkok Post