The Commerce Ministry is planning to subsidise sales of packaged white rice as part of the government's plan to absorb some of rising cost of living, especially for low-income earners.

"Inevitably, rice prices both for domestic and export markets will increase," Commerce Minister Kittirat na Ranong said yesterday. "However, if the project can help ensure a better living standard for low-income people, rice traders and some groups of consumers must accept higher living costs."

The subsidy, which will be launched after the implementation of the government's rice-pledging scheme, will be limited to low-grade white rice, which is widely consumed by poor people. Affluent consumers who prefer high-quality rice will have to shoulder more of the premium.

The government will today present its policy statement to Parliament, which includes the rice subsidy as one of its major measures to boost incomes. According to a government study, the price for domestic white rice is expected to climb by Bt10 a kilogram from the current Bt15. To cushion consumers from the shock, the ministry would sell rice directly to shoppers under the government's Blue Flag discount brand.

In the past, the government only sold Blue Flag rice when prices were extremely high, but now it expects to make it available all the time as one of the local choices for consumers.

To hold down rice prices, the ministry will work closely with traders to reduce some of their production costs as well as with the modern trade to lower their costs.

The government has no intention to subsidise high grades such as jasmine rice and rice for export, as that would only help foreign consumers.

Upper-end consumers may have to pay more for their rice, but this is the only way to improve the quality of life for rice farmers, which people should understand, Kittirat said.

The export rice price will need to be increased. Other countries will also adjust their rice prices in line with Thailand's, he said.

To help exporters, the government will ask for cooperation from banks to raise loan limits to increase liquidity for rice traders, he added.

Under the pledging project, which is to start in early November for the main crop, the government is expected to spend less than Bt100 billion for unlimited rice volume.

About 10 million tonnes of paddy rice are expected to enter the market. Farmers can pawn their paddy white rice for Bt15,000 a tonne and jasmine rice for Bt20,000 a tonne with the government.

Source: The Nation