According to the sources, it has been reported recently that the government is set to use 3.9 billion baht to absorb as much as 12.5 million tonnes of rice from the new crop to prevent price volatility in the early season.The amount is about half of the total paddy the government has estimated will be produced for the main 2016-17 crop, harvested from November to early next year. Further, in this regard the Commerce Permanent Secretary Ms Chutima Bunyapraphasara informed that the latest forecast by the Agriculture and Cooperatives Ministry shows the total volume of paddy production next year at 27.7 million tonnes, which is down 12% year-on-year.
The report also indicates that the volume breaks down as 23.29 million tonnes from the main crop and 3.88 million tonnes from the secondary crop, which is not rainfed. Further, Ms Chutima expects large volumes of rice from across the country to enter the market at the same time, potentially depressing prices and hurting farmers. It has also been narrated that to alleviate the impact on growers, the National Rice Policy Committee, Chaired by Prime Minister Prayut Chan-o-cha, approved the plan to absorb some supply from the market during the first two months of the harvest season.
Furthermore, in this context the Bank for Agriculture and Agricultural Cooperatives was ordered to prepare 3.9 billion baht funds to lend farm cooperatives to buy 2.5 million tonnes of paddy to keep as stock during the early season. In addition, the fund will also be used to finance a two-month pledging plan for 2 million tonnes of fragrant and glutinous paddy rice. It has also been revealed that the growers will receive 1,500 baht a tonne on top of market prices when storing their rice as part of the plan. As per report, some 940 million baht will be lent to millers to buy 8 million tonnes of paddy, which will be stored at their warehouses for two to six months. Moreover, the participating banks will also be asked to offer loans at 3% lower than market rates, with the government reimbursing them for the subsidy. Further, Ms Chutima stated that the measures will be temporarily enacted during the early harvest season to stabilise rice prices, which are now hovering in the 8,500-10,000 baht a tonne range.