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Thailand's rice sector needs 'long-term development plan'

Publication Date : 06-04-2014

 

Thailand should draw up a long-term policy on rice crops and trading management to avoid huge losses from short-term subsidies, while politicians should no longer be allowed to make rice policy a populist tool, a seminar heard yesterday.

At the "Thai Rice in Asean … Isn't It Reaching a Dead-End?" seminar, organised by Dhurakij Pundit University's faculty of economics, panellists agreed that Thailand needed a long-term strategy on rice rather than letting politicians form their own policies and create only short-term means of aiding farmers.

Wanlop Pichpongsa, vice president of the Thai Rice Exporters Association, said rice should no longer be a political tool to gain popularity during an election campaign.

"The country should set up a permanent organisation to manage rice policy, with no politicians involved; otherwise, the sector will not be developed. Politicians have always only thought about short-term policies to help farmers and gain popularity," he said.

He pointed out that the price of Thai rice had not increased as much as the government had expected, even though the pledging project was aimed at boosting prices. Farmers have not really benefited from the pledging scheme, having faced a combination of overdue payments and falling market prices, he added.

As no government has ever implemented long-term measures for rice development, such a strategy needs to be drawn up to ensure sustainable incomes for farmers, as well as competitiveness for Thai rice in the global market, he said.

Moreover, given upcoming seamless trade under the Asean Economic Community, the Thai rice sector faces a big challenge due to unstable prices from the subsidy project, coupled with lower development of rice quality, he stressed.

To ensure sustainable incomes and fair benefits for farmers, Wanlop said the government should still find some measures to help them in the short term, but it must also think more about long-term development.

It could create a system of direct payments to subsidise the cost of production, which would not negatively affect the sector or involve market intervention, he suggested.

He told the seminar that the price of Thai rice could increase slightly in the next few months because of increased demand in both the world and domestic markets, even though the caretaker government has accelerated the release of rice from its stockpiles.

As the price of Thai rice is only US$10-$20 per tonne higher than Vietnamese rice, the Kingdom should be able to compete with Vietnam in the global market, he said.

The Philippines and Iraq will soon open bidding to import rice, and Thai rice could win the auctions if the proposed prices are not too high, he added.

Manatsanith Jirawat, a rice expert at the Commerce Ministry's Foreign Trade Department, accepted that the current government only had a plan to solve the problem of overdue pledging payments to farmers.

Although the government does have a long-term measure to promote rice development, the plan cannot be carried out as it is too busy solving the payment problem and releasing rice from the stockpiles, she said.

To ensure sustainable development of the industry, Thailand could cooperate more closely with other rice-exporting nations in Asean, such as Myanmar, Laos, Cambodia and Vietnam, she suggested.

While it would be quite difficult to collaborate on prices, as each country had its own agenda, Thailand as one of the world's leading rice exporters could cooperate with each of its Asean neighbours to promote rice cultivation and trading with other markets, she said.

Meanwhile, the Thai Rice Exporters Association reported that the country had exported some 1.4 million tonnes of rice during the first two months of the year - 39.5 per cent higher than in the same period last year.

Export value grew 12.5 per cent year on year, to 29.6 billion baht (US$911 million).

Last month's export volume is expected to have reached 700,000 tonnes.

As of April 2, the price of 5-per-cent Thai white rice was quoted at $394 a tonne, while Vietnamese rice was traded between $385 and $395 a tonne.

 

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