After chairing the cassava management committee meeting yesterday, Deputy Commerce Minister Suvit Maesincee said the government had decided to come up with a subsidy measure to assist cassava farmers during the upcoming harvest season.
The Bt1.2-billion budget will used to pay the 1.5 per cent interest rate for 500,000 cassava farmers for 24 months. In addition, the BAAC will waive interest of 1.5 per cent due from the farmers during the same period.
The government will also ask the BAAC to provide soft loans to help some 500,000 farmers. The budget allocation will cover soft loans of Bt20,000 to each farmer. Farmers will be charged an interest rate of only 0.5 per cent per month for the 12-month tenure of the loan.
To protect Thai farmers, the government will ensure stringent inspections at border checkpoints to prevent cassava smuggling from neighbouring countries. Thailand would also enforce stringently sanitary standards for cassava and tapioca imports.
The Foreign Trade Department will strive to promote cassava exports overseas in an attempt to reduce supply in the domestic market, in particular during the harvest season starting in October.
Besides China, India is one of potential markets for cassava imports from Thailand.
In the first seven months of this year, Thai tapioca export was down 16 per cent in terms of volume at 6.59 million tonnes, while the value was even lower, by 24.4 per cent, at US$1.74 billion. The export price of tapioca per unit decreased 10 per cent from $289 per tonne last year to $264 per tonne this year.
In addition, the government has asked tapioca traders to purchase cassava at Bt1.90 per kilo to protect farmers from the falling prices.
Cassava is currently traded at Bt1.60 to Bt1.70 per kilogram, lower than last year’s price of Bt2.50 per kilo.
It is estimated that cassava production this year will reach 31 million tonnes, about 21 million tonnes grown from November to April.
In the long run, the government will also support innovation to create value-added goods using cassava so that farmers will have sustainable income, and the government does not need to step in with measures to help when cassava price falls.