The Commerce Ministry will order rice millers to report their stocks to verify information, as only 4.7 million tonnes of paddy, an unusually low amount, has entered the mortgage scheme.

Permanent secretary Yanyong Phuangrach said the ministry is concerned about the accuracy of the information, so the fresh reports will help adjust the government's rice policy to match the actual situation after the flood crisis.

He said there were only 2,000 tonnes of paddy being pledged at the barn out of a total of 4.7 million tonnes pledged with the government since the programme began this past Oct 7, with the scheme set to end by Feb 28.

"There should be over 10 million tonnes of paddy harvested in the main crop, but the amount entering the government was unusually low and far below the projection," he said.

"Rice millers and exporters say they don't have much rice in stock. The ministry is wondering where has all the harvested rice gone?"

The government originally aimed for 25 million tonnes of paddy to enter the scheme, later revising down the projection to less than 10 million tonnes after the floods, which destroyed some 10 million rai of cultivation area, or 7 million tonnes of output.

The budget for the project is now projected at 100 billion baht, down from 430 billion baht.

Farmers get 15,000 baht for pledging a tonne of 15% white rice paddy and 20,000 baht for pledging a tonne of Hom Mali paddy.

The ministry has instructed the Internal Trade Department to issue a regulation requesting rice millers and exporters report their stocks, as there was a difference in figures for estimated flood damage to rice production among different government agencies.

"Though the ministry projected quite a large sum of damaged output, there should have been more paddy entering the mortgage scheme," Mr Yanyong said. "If the paddy output is actually lower than the projection, the ministry has to adjust the management of rice stock."

He noted that the price of white rice in the global market has begun to increase, while the free on board (FOB) price of Hom Mali rice has dropped to about US$1,000 a tonne.

Mr Yanyong said the low amount of paddy in the mortgage system may have resulted from a delay in issuing bai pratuan, or registered tickets to be exchanged for cash from the state bank.

Of the total amount, 1.7 million tonnes came from farmers in the Northeast, 1.6 million tonnes from the North and the rest from the central region.

Charnchai Rakthananon, president of the Thai Rice Millers Association, said the low amount in the mortgage programme was due to flooding, as farmers who wanted the 2,222-baht compensation per tonne could not put their output into the scheme.

Many farmers who could recover some output had to sell at low prices in the market. By Mr Charnchai's estimate, more than 7 million tonnes of paddy were sold in the mentioned pattern, resulting in just 20% of total output entering the mortgage scheme.

"I estimated that there would be over 5 million tonnes of paddy entering the mortgage scheme," he said.
"The government should not be worried about the main crop, as it will require only 60 billion baht of budget.

What the government has to think about now is implementation of the mortgage scheme for second-crop paddy during March-October to avoid a price plunge."

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said farmers had hesitated to enter the programme, worrying that the Bank for Agriculture and Agricultural Cooperatives would debit the amount with their outstanding debt, lowering their net cash in hand.

He said there was hoarding of more than one million tonnes of rice by major millers and exporters before the implementation of the mortgage scheme, so the private sector is estimated to hold perhaps several million tonnes of rice.

Source: Bangkok Post