Thailand : Three measures proposed to shore up off-season rice prices
Thailand is proposing subsidies for rice storage, incentives for traders to buy at higher prices, and interest rate compensation to stabilize off-season rice prices. These measures, if approved, will help farmers delay sales, encourage traders to purchase more rice, and maintain market balance without direct price intervention. The initiative aims to support farmers while preventing price distortions.
Thailand proposes three measures to stabilise off-season rice prices, including subsidies for storage, incentives for traders to buy at higher prices, and interest rate compensation. The initiative aims to support farmers and prevent market price distortions.
A subcommittee proposed three measures on Sunday to stabilise off-season paddy rice prices, the director-general of the Internal Trade Department announced.
Witthayakorn Maneenetr, director-general of the Internal Trade Department, stated that the subcommittee of the National Rice Policy and Management Committee held a meeting and agreed on three measures, primarily aimed at providing subsidies for rice storage, either to farmers or rice traders.
However, these measures are still subject to approval by the full rice committee, Witthayakorn noted.
Market-Driven Approach to Rice Price Stability
He emphasised that the measures do not constitute direct market price intervention, as such actions would violate two Cabinet resolutions dated 21 November 2023 and 8 November 2024, which prohibit direct subsidies or price guarantees.
If approved by the full committee, the measures could be implemented immediately. They include:
1. Subsidies for Rice Storage to Delay Sales
- The government will allocate 1.219 billion baht to delay the sale of 1.5 million tonnes of rice for one to five months.
- A subsidy of 1,000 baht per tonne will be provided for rice storage.
- If farmers store the rice themselves, they will receive an increased subsidy of 1,500 baht per tonne.
2. Subsidies for Rice Traders to Buy at Higher Prices
- A budget of 150 million baht will be allocated for traders to purchase 300,000 tonnes of rice at 300 baht per tonne above market price.
- Traders will be permitted to set up purchasing points in areas where farmers lack access to storage facilities.
- The government will cover a 500 baht per tonne rice management fee for traders under this scheme.
3. Interest Rate Compensation for Rice Traders
- 524.4 million baht will be allocated for interest rate compensation to encourage traders to buy 2 million tonnes of rice for storage.
- Traders must purchase rice at 200 baht per tonne above market price to help stabilise prices.
- The government will subsidise loan interest rates at 6% for traders financing their rice purchases.
Ensuring Market Balance
Witthayakorn asserted that these measures would not distort the market mechanism but would instead help traders absorb surplus rice, thereby driving up prices.
Additionally, the department will collaborate with the Association of Retail Rice Traders to introduce affordable five-kilogramme rice packages for consumers. This initiative is expected to remove 500,000 more tonnes of rice from the market, further supporting price stability.
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Source : The Nation Thailand
