Rubber price guarantee to be implemented: Ministry

[webfact]

Rubber price guarantee to be implemented: Ministry

By The Nation

 

 

Agriculture and Cooperatives Minister Chalermchai Sri-on has proceeded with the implementation of an urgent price guarantee measure for grade 3 raw rubber sheets to be sold at Bt60 per kilogram to assist 1.43 million rubber farmers who have suffered losses in the past five years as a result of the falling prices of latex and rubber sheets.

 

The recent meeting of a working team on agricultural produce price guarantee, presided over by Chalermchai, resolved to implement the Bt60 per kilogram price guarantee measure for rubber farmers with up to 25 rai of more than seven-year-old tap-able rubber trees per head (based on a calculation that one rai yields 250 kilograms per year), said Sunthorn Rakrong, spokesman for the House of Representatives' standing committee charged with studying the palm oil and rubber price slump and president of the Association of Rubber Growers in 16 Southern Provinces.

 

Details on the number of entitled farmers and plantation space involved remain up for further discussion but it has already been proposed that the 1.4 million rubber farmers with land right documents covering 15 million rai as well as the 300,000 rubber farmers without land right documents covering five million rai should be entitled to the aid, he added. “The aid coverage should include the farmers without land right documents too, as they also paid the CESS (export tax on rubber) at Bt2 per kilogram," he said.

 

The prices of latex and cup lump would also be improved based on the Bt60 price reference, the academic criteria and the median prices at the Rubber Authority of Thailand's six nationwide markets, Sunthorn said, adding that these three types of rubber were in farmers' possession and thus eligible for the aid measure unlike the smoked sheets grade 3 that would benefit the middlemen.

 

File Photo

 

For example, if the median price is calculated as Bt40, the compensation would be Bt20 so if a farmer has 10 rai, it meant he would get (Bt20 x 10 rais x 250 kilograms/per rai) Bt50,000 per year. The money to compensate for the price difference so as to keep the price at Bt60 per kilogram could be wired directly to the registered farmers' bank accounts and the amount could be split between the plantation owners and rubber tapers at a 60:40 ratio, he said.

 

Sunthorn said Chalermchai and the working team on agricultural produce price guarantee would have another meeting on August 21 to set details of the price guarantee implementation. A tripartite meeting (government, private sector and rubber farmers) would discuss the matter and the appropriate payment method.

 

"The Agriculture and Cooperatives Minister has ordered that we proceed with the measure so that one million tonnes - or 20 per cent out of the five million tonnes produced in Thailand per year - would be bought for processing to cater to the government's promotion of the domestic use of rubber at one million tonnes per year such as for road construction and value-added products. So there is a good chance that the rubber price would reach Bt60 per kilogram. The minister asked farmers to give the government some time,” Sunthorn said.

 

According to the Rubber Authority of Thailand's website, the price of raw rubber sheets was around Bt37-.9-Bt39.20 per kilogram while the latex price was Bt39.20 per kilogram.

 

Source: https://www.nationthailand.com/news/30374806

 

-- © Copyright The Nation Thailand 2019-08-15

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[keith101]

Is this any different from what a previous government did wit rice ?

[Chang_paarp]

This went so well with the rice producers they want to do it all again with the rubber industry. The advantage  for rice is, there is a constant or growing demand unlike rubber where the demand is falling .

[hotchilli]

19 hours ago, webfact said:

Agriculture and Cooperatives Minister Chalermchai Sri-on has proceeded with the implementation of an urgent price guarantee measure for grade 3 raw rubber sheets to be sold at Bt60 per kilogram to assist 1.43 million rubber farmers who have suffered losses in the past five years as a result of the falling prices of latex and rubber sheets.

Price fixing is the way to go.... didn't work out too well for the rice trade a while back.

[Srikcir]

The Thai government's manipulation of rubber prices only applies to domestic purchase.

It has no effect on the global market prices unless domestic consumption reduces global demand.

With rubber-producing Indonesia and Malaysia competing in the international rubber market and a general global softening demand for rubber, Thailand's domestic rubber subsidy will not meet the challenge of agriculture sustainability. 

This is just another "flashy" populist program of limited economic durability.

[Srikcir]

21 hours ago, keith101 said:

Is this any different from what a previous government did wit rice ?

To be precise you might have said '... from what previous governments did with rice?'

Prayut was the previous government following the Yingluck government, both of whom used a subsidized rice pledge program. They only differed in the amount of the subsidy and manner of storing pledged rice.

[Srikcir]

21 hours ago, webfact said:

the amount could be split between the plantation owners and rubber tapers at a 60:40 ratio

The operative word is "could" and in Thailand that usually means "won't."