Agriculture Ministry will try to peg rubber price at 33 baht/kg for rubber sheets



BANGKOK: -- The Ministry of Agriculture will urge rubber traders to keep purchasing price of rubber sheets at not lower than 33 baht a kilogramme in order to help rubber farmers who have demanded the government to guarantee the price at 50 baht/kg.

The new measure to urge traders to buy rubber sheets at 33 baht/kg was meted out at a meeting on Thursday of the committee tasked with resolving rubber problems which is headed by agriculture permanent secretary Thirapat Prayoonsit.

The committee, said Mr Thirapat, will assess rubber prices every seven days and assess production of new rubber expected in the next three months in order to work out an appropriate quota plan for the production of different kinds of rubber produce.

Meanwhile, agriculture vice minister Chintana Chaiwannakarn will visit rubber farmers in Nakhon Si Thammarat this coming Sunday. She indicated that the ministry might resort to the enforcement of the rubber control law to fix rubber price at 33 baht/kg.

Meanwhile, rubber farmers in southern provinces are coordinating to increase pressure on the government to come to their rescue by subsidizing rubber price at 50 baht/kg.

Agriculture minister Chatchai Sarikalya said the government has tried to help out rubber farmers with a short-term project by extending them loans to switch to cash crops or to raise domesticated animals such as sheep or goat to make a living.

Also, he said the Transport Ministry would use about 20,000 tonnes rubber this year for road surfacing.

Source: http://englishnews.thaipbs.or.th/agriculture-ministry-will-try-to-peg-rubber-price-at-33-bahtkg-for-rubber-sheets


-- Thai PBS 2016-01-08

Fixing the price got the rice scheme into trouble. Leave pricing to market force.

Price Controls = Disaster.

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Venezuela

Shortages in Venezuela have been prevalent following the enactment of price controls and other policies during the economic policy of the Hugo Chávez government.^[1][2] Under the economic policy of the Nicolás Maduro government, greater shortages occurred due to the Venezuelan government's policy of withholding United States dollars from importers with price controls.^[3] Shortages occur in regulated products, such as milk, various types of meat, chicken, coffee, rice, oil, precooked flour, butter prices; and also basic necessities like toilet paper, personal hygiene products, medicine and even breast implants.^[1][4][5] As a result of the shortages, Venezuelans must search for food, wait in lines for hours and sometimes settle without having certain products.^[6][7]

^{https://en.wikipedia.org/wiki/Shortages_in_Venezuela}

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Cuba

What could happen is that the products subjected to price controls would disappear from the agricultural markets and once again go into hiding. We would not be able to go to the corner to buy a pound of onions, like we have done over the last two decades, but would return to the times when we'd end up at the side of some road or in the middle of nowhere illegally dealing directly with the producers or the persecuted intermediaries.

Consumers would end up paying the piper for a measure that does not solve the problem of the lack of productivity on our farms or of the extremely low wages.

An economy is not planned on a whim, nor is it managed by force of restrictions, rather it is a fragile framework where lack of confidence and excessive state control are like a deadly embrace, leaving us without the ability to breathe on our own. In this grip, controlled prices come to be feared as the kiss of death that strangles commerce and leaves it lifeless.

http://www.huffingtonpost.com/yoani-sanchez/the-deadly-kiss-of-price_b_8913554.html

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Nazi Germany & Soviet Union

Price controls did not work even for Nazi Germany, rigidly enforced and highly elaborated. According to Hermann Göring, controlling people's wages and prices - people's work - is not enough, people's lives must be controlled as well. They tried both and failed. The Soviet Union was an example of a mature and long-lived total wage and price control policy in operation. And yet, prices for goods, services and wages covertly increased, and a huge black market swelled up.^[4]

^{https://wiki.mises.org/wiki/Price_controls}

international prices would rule the price, any help offer from the Government would amount to subsidies and depending on free trade agreements etc they might not be allowed , what the farmers unfortunately need to become is more efficient or try something else, in this world of commerce today , anything old fashion or traditional is a thing of the past...................................... .

Latex prices stand at about Bt25 per kilogram - The Nation 2016-01-06.

So the government's new measure is to urge traders to buy rubber sheets at 33 baht/kg? Unless the government is planning to subsidize traders 8 Bt/kg, there is no reason for traders to pay more than market price.

Rubber farmers insist traders are getting excessive profit margins of 10/12 Bt/kg and should be lowered to 4/5 Bt/kg (The Nation 2016-01-06). Unfortunately for rubber farmers, the government has already made financial commitments to the traders to support their profitability.

What this conflict has come down is that the military thought it could replicate Yingluck's rice assistance program that garnered Northern rice farmer loyalty with the Southern rubber farmers to keep their loyalty, but found it's not such a simple task. For all Prayut's banter about avoiding populist programs perceived as "buying" political support, he is swiftly being drawn into the same policies but with no political satisfaction!

Instead of selling to traders, why not observe the King's Self-Sufficiency model and build some plants to create finished goods while the price is so low? Finished goods have virtually no limits to shelf life from rubber, so stockpile that and wait for the price to rise.

Everyone could laugh all the way to the bank, and taking the incoming volume off the market would also make the kilo price rise.

Edited January 8, 201610 yr by FangFerang

Price of oil down, price of rubber down, price of oil up, price of rubber up.