Finance Minister says rice price in line with government's goal

BANGKOK, 24 November 2014 (NNT)-Finance Minister M.R. Pridiyathorn Devagula says the current price of rice is in line with the goal set by the government.

Following calls from rice farmers to have the government raise the subsidy price, the Finance Minister said the ongoing 8,000 baht per ton is a suitable rate. The government also has other programs that allow rice silo owners to take out loans from commercial banks at an annual interest rate of three percent, which the government would shoulder.

He said he did not think the Commerce Ministry would release rice from its stocks at this time. He added that the government is currently developing another farmer assistance program, which will be ready next month, to help them supplement their incomes through other types of crop growing.

The Finance Minister further added that his Ministry has been trying to get large organizations involved in the loan scheme for low income families. The interest rate would be around 3% per month, or 36% per year.

M.R. Pridiyathorn is scheduled to visit China on November 27th to join Joint Trade and Investment Committee conference, where he is determined to encourage Chinese investors to build rubber factories in Thailand.


-- NNT 2014-11-24

A price which is way less that what the Thaksin government paid for it.

Excellent economics....... For assured bankruptcy.

The idea of demand and supply hasn't reached Thailand yet , and no subsidies if you want free trade agreements , that's the rules.

A price which is way less that what the Thaksin government paid for it.

Excellent economics....... For assured bankruptcy.

For the farmer?

Well, they should have been busy retiring millions of rice farmers for years and giving them a pension. They use too many people too grow too much rice.

On a 4 rai paddy 50 km north of Korat we grow enough home mali rice for the family. Last year was bad; this year was almost worse because of the weather which forced us to plough and seed twice, but we have just harvested it and have bagged some 2,500 kg. (about 620kg/rai, which is less than usual - except last year). If we had to buy this amount over the year at c.20 baht/kg it would cost us some 50,000 Baht; if we sold it at 8,000 Baht.tonne it would net us 20,000 Baht, which is almost exactly what it cost us to produce it this year. Thank goodness we don't have to, but one starts to understand why the farmers around here were so happy to be promised 15,000 Baht/tonne - and were then mega p1$$ed off when they weren't paid! The sad fact of the matter is that the average Isaan farmer is caught in a time warp and cannot or will not adapt to modern farming methods.

He said he did not think the Commerce Ministry would release rice from its stocks at this time.

Likely trying to figure out a way to ensure that the WTO doesn't end up all over their backs. If they sell vast quantities at lower than cost-5% then it will be considered dumping. Somewhat shady G2G deals can be gotten away with which is what the PTP government was trying to do but when you are talking of many millions of tonnes it is not so easy.

Presumably the loss figure of 762 Billion I saw a few weeks ago would have assets included in the calculation. I wonder what the price per tonne figure was when working it out.

“… the Finance Minister [M.R. Pridiyathorn Devagula] said the ongoing 8,000 baht per ton is a suitable rate.”

2014-10-16 “The Minister of Commerce [General Chatchai Sarikalaya], with the cooperation of large producers, has launched a low-priced products initiative and predicted that the next crop of rice will fetch farmers no less that 15,000 Baht/ton”

2014-10-25 “the Bank for Agriculture and Agricultural Cooperatives will pay participating farmers 90 percent of their grains’ market value, or 11,700 baht a ton for sticky rice and 15,400 baht a ton for jasmine rice. Each household is allowed to receive no more than 300,000 baht and pledge no more than 20 tons of paddies. The interest, meanwhile, will be subsidized by the government.”

How is 8,000 baht per ton a suitable rate?

The government, abiding by the rich rice millers will always keep the price of rice to the small farmer so low the farmer can barely make a living.

The rice is the demonstration of the rich keeping the poor poor.

Back in the old days the Chinese lorded it over the farmers by the feudal system, today its the same families but backed by the Government.

Regards

'The Finance Minister further added that his Ministry has been trying to get large organizations involved in the loan scheme for low income families. The interest rate would be around 3% per month, or 36% per year.'

36% per year????? Are they for real?

Haven't they got much rice stockpiled. Why don't they want to release some of it?

I just think common sence would dictate to sell off the stock pile as a 'firesale'?

good post by Hornell.

But it sounds in part that they want to divest themselves of rice growing and get into rubber? Hope everyone agrees with this.

On a 4 rai paddy 50 km north of Korat we grow enough home mali rice for the family. Last year was bad; this year was almost worse because of the weather which forced us to plough and seed twice, but we have just harvested it and have bagged some 2,500 kg. (about 620kg/rai, which is less than usual - except last year). If we had to buy this amount over the year at c.20 baht/kg it would cost us some 50,000 Baht; if we sold it at 8,000 Baht.tonne it would net us 20,000 Baht, which is almost exactly what it cost us to produce it this year. Thank goodness we don't have to, but one starts to understand why the farmers around here were so happy to be promised 15,000 Baht/tonne - and were then mega p1$$ed off when they weren't paid! The sad fact of the matter is that the average Isaan farmer is caught in a time warp and cannot or will not adapt to modern farming methods.

Hornell,

Great info, thanks. And to think Bt20K net is basically two months salary at minimum wage for one worker; I expect many more than just 1 worker were involved in growing and harvesting the rice over 3 months or so.

'The Finance Minister further added that his Ministry has been trying to get large organizations involved in the loan scheme for low income families. The interest rate would be around 3% per month, or 36% per year.'

36% per year????? Are they for real?

Government as Loan Sharks. No doubt the poorer farmers will fall over themselves to be financially enslaved!

they keep moving the goal posts

I will loan them money at 25 % interest and save them 11 % !

Even credit cards are only 20% here...which is already crazy high...

Looks like farmers get the 'special rate'

Even credit cards are only 20% here...which is already crazy high...

Looks like farmers get the 'special rate'

more like the special "rape"

On a 4 rai paddy 50 km north of Korat we grow enough home mali rice for the family. Last year was bad; this year was almost worse because of the weather which forced us to plough and seed twice, but we have just harvested it and have bagged some 2,500 kg. (about 620kg/rai, which is less than usual - except last year). If we had to buy this amount over the year at c.20 baht/kg it would cost us some 50,000 Baht; if we sold it at 8,000 Baht.tonne it would net us 20,000 Baht, which is almost exactly what it cost us to produce it this year. Thank goodness we don't have to, but one starts to understand why the farmers around here were so happy to be promised 15,000 Baht/tonne - and were then mega p1$$ed off when they weren't paid! The sad fact of the matter is that the average Isaan farmer is caught in a time warp and cannot or will not adapt to modern farming methods.

Well the sad reality of this, is that they are basically selling it with no profit, and yet for some crazy reason, Thailand keeps chasing to be number 1 exporter.

Um, isn't subsidizing rice the reason that Yingluck should be impeached? You can say, "Well, this government has a different approach". But that is a BS argument. Same same.

This is BS. Thais grow rice, and have grown rice for 100,000 years. Get used to it.

'The Finance Minister further added that his Ministry has been trying to get large organizations involved in the loan scheme for low income families. The interest rate would be around 3% per month, or 36% per year.'

36% per year????? Are they for real?

This made me wonder as well. I just think it is not correctly quoted or calculated by whoever wrote the article. I thought it was 3% annually.

36% would be outrageous.

I will loan them money at 25 % interest and save them 11 % !

Hell I would do it for 20%

36% ? That is loan shark rate and no family is going to be able to pay it. The low income families need better income, not loans at criminal rates. Thailand has a law limiting private interest to 15% per annum so what is with this.

Why not invest in baseic, and later vocational education together with schemes to remote better farming practices on a more grand scale - a bit like expanding greatly the excellent Royal programs coupled with education. In not too long there would be evident and valuable change. It n the meantime outlaw last an sharing altogether and provide a requirement for banks to set aside and dispense a certain mandatory amount for loans to low income families of limited amounts to get the private thugs out of the business.