With rice exports moving sluggishly, the Commerce Ministry will tomorrow propose that the National Rice Policy Committee revise down its pledged price from Bt15,000 a tonne to Bt13,000 or Bt14,000 a tonne for white paddy rice in April's second-crop harvest season.

Commerce Ministry permanent secretary Vatchari Vimooktayon said that a revision of the pledging price would be proposed in order to stimulate exports of Thai rice in the face of stiff competition from countries with lower prices.

"If the pledged price is lowered, it should stimulate growth in rice exports this year and help release rice from stockpiles, as well as promote rice industry growth," Vatchari said.

The National Rice Policy Committee will be chaired by Commerce Minister Boonsong Teriyapirom, but normally it would be chaired by Prime Minister Yingluck Shinawatra.

GOVT SUPPORT

Vatchari said farmers should be able to accept the price change because the government will continue to support them and help with reducing the costs of production.

Although the price pledging is the result of the government's policy, it could be adjusted if it will create a better outcome for the rice industry, Vatchari said. Farmers should not suffer from lower incomes as most have relieved themselves of debts during the past two years of high prices, she added.

Since starting the pledging scheme at the guaranteed price of Bt15,000 per tonne of white paddy rice on October 7, 2011 to February this year, the Yingluck government has spent Bt476 billion, higher than the estimated Bt450 billion.

A total of 29.65 million tonnes of rice has been entered to the government stockpiles, with warehousing adding to the cost of the programme - approximately Bt800 a month per tonne.

The Bank for Agriculture and Agricultural Cooperatives (BAAC) has admitted it has run out of funds to support the rice-pledging scheme. After selling stockpiled rice under government-to-government deals and contract bids, the government has returned just Bt72 billion to the BAAC, the bank claims.

PLEDGING PROJECT

Tikhumporn Natvaratat, Foreign Trade Department deputy director-general, said the Commerce Ministry will today(February 28) meet with the Public Debt Management Office and the BAAC to finalise the liquidity of the pledging project.

He insisted that the government would be able to continue the pledging scheme because the government can sell a high volume of rice under government-to-government deals. However, the government has not disclosed the selling price and total volume of those deals.

A source from the Thai Rice Exporters Association was delighted with the Commerce Ministry's proposal to cut the pledged price because lower prices would boost exports.

The source said the lower price shouldn't hurt farmers. The second-crop harvest season is focused on the Central plains, where farmers have enjoyed high prices.

According to the association's data, Thai rice exports shrank by 35 per cent last year to 6.94 million tonnes. Compared to a year ago, rice exports from January to February 25 this year dropped slightly by 3.54 per cent to 685,372 tonnes

Source: The Nation