The Commerce Ministry has defended the government's rice pledging policy, saying the scheme does not violate the constitution as alleged by some academics.

A group of academics led by Adis Issarangkul na Ayutthaya, dean of the School of Development Economics at the National Institute of Development Administration (Nida), will today seek an order from the Constitution Court to suspend the scheme, citing it violates Section 84 of the charter.

The clause in question says the state shall "refrain from the engagement in an enterprise in competition with the private sector unless it is necessary for the purpose of maintaining the security of state, preserving common interests, or providing public utilities".

The section also demands the government protect and maintain the interests of farmers in production and marketing, to secure maximum prices for agricultural products.

"I don't see how the scheme breaches the law as it aims at increasing income of farmers, the majority in this country," said Somchart Sroythong, deputy director-general of the Internal Trade Department.

However, the official said the department will prepare information for the scheme which pays above-market prices for paddy at 15,000 baht per tonne for white rice and 20,000 baht for fragrant Hom Mali rice.

The National Rice Policy Committee has approved a 282-billion-baht budget for the programme from 2011-12.

Last week, it also approved an additional 79 billion baht for paddy from the second crop, bringing pledged paddy to over 23 million tonnes.

Exporters have complained they could not match the state's prices due to strong competition from India and Vietnam which offer much lower prices.

The Thai Rice Exporters Association blamed the scheme for eroding Thai rice's competitiveness in the world market, leading to export volume falling by 45% so far this year.

The current export prices of 5%-grade Thai rice is US$577 a tonne compared with $455 and $440 of Vietnam and India, respectively.

They also complained the government has been slow in selling rice from its stockpile, resulting in tight supply in the market.

However, the Ministry said several bids were called but many were cancelled after bidders offered too low prices.

Last week's bids aimed to sell 586,000 tonnes but it was expected only 57,605 tonnes will be sold to nine companies.

Source: Bangkok Post