Wichai Manmuang, a farmer in Chai Nat has been waiting for Seven months for government to pay him the long overdue amount under the rice-pledging scheme. Wichai has suffered a great loss and he is now in a dilemma whether he should pay his debts or invest for the upcoming harvest. But never the less now he has no money and hence cannot invest for the new harvest with no interim subsidy project by the government.
The price of Paddy white rice has been dropping since the end of the pledging programme from Bt15, 000 per tonne to now at Bt7, 000 a tonne. Wichai commented that though the prices increased for two years under the scheme, the farmers had to face the higher production costs which is now double than what it was three years ago.
The farmers are looking forward for long term solution by the government as in past few years the costs of land rental, pesticides and fertilizer have increase thus although the incomes have risen, the increase production cost mean living standards will never improve.
As per Bank of Agriculture and Agricultural Cooperatives, as on 25 April, pledging documents have been issued to about 1.91 million farmers, but only 778,065 have been paid fully under the scheme in thailand. Payments covered only 5.86 million of total 11.61 million tines of pledged paddy.
President of Thai Rice Exporters Association, Chookiat Ophaswongse has commented that farmers can expect even less from selling their produce, as the market has realized that the government needs to release more rice from its stockpiles to generate income. Thus farmers are the not the only one who have been hurt by this short term subsidy project but the traders, the Thai rice industry and the kingdom as a whole has been affected.
With government spending more than Bt700 billion to subsidies the rice price in the market, Thai has lost export competitiveness with such high prices. Thai fell behind India last year and India became the biggest rice supplier with 9.61 million tonnes of export volume.
Even with the end of the pledge scheme the export may have recovered but Thailand is still challenged by the rival countries as in the recent times the quality of Thai rice has dropped thus many rice buyers have switched to other countries like Vietnam, Myanmar and Cambodia.
According to rice traders’ association, Thailand’s rice-export volume was up by 33.65 per cent year on year in the quarter to 2.2 million tonnes. Though, India was still the world’s top exporter in that period at 2.44 million tonnes. Thai rice export value in US dollar terms dropped 6.8 per cent to $1.03 billion in the quarter.
As of last month, the price of Thai rice had declined by 26.9 per cent from an average of $718 a tonne last year to $525 a tonne, and in baht terms dropped 21.1 per cent from Bt21, 500 to Bt16,963 per tonne. The quality of Thai rice, in particular jasmine and white rice, had dropped seriously.
Many consumers have been paying more attention to rice quality in thailand. They have shifted to higher-quality rice grains such as organic, including the rice-berry variety, which have not joined the pledging scheme.