THE GOVERNMENT yesterday launched a subsidy scheme to pay Bt35.9 billion in “soft loans” to rice farmers growing Hom Mali rice.
The offer of low-interest loans – which is expected to be at a rate of about 3 per cent – amounts to the value of an estimated 2 million tonnes of Hom Mali, or Jasmine, paddy.
Farmers are suffering from falling paddy prices. Hom Mali rice paddy is now selling at Bt9,700 per tonne, |compared to Bt10,000 to Bt12,000 previously.
Prime Minister Prayut Chan-o-cha yesterday blamed the problem partly on an alleged collaboration between local politicians and rice millers to keep rice prices at low levels.
“They hope to create dissatisfaction so that people oppose or get into a conflict with the government,” Prayut said.
“Such bad circumstances should be eliminated. Unscrupulous traders should be removed from the rice trading system,” the prime minister said.
He added that state agencies involved had been instructed to amend laws to punish people who intentionally kept rice prices low.
Prayut yesterday chaired a meeting of the Rice Policy Management Committee along with Commerce Minister Apiradi Tantraporn. After, Apiradi said the government had agreed for the Bank for Agriculture and Agricultural Cooperatives to provide soft loans for rice farmers.
Farmer who store Hom Mali rice paddy in their barns will be eligible for loans of Bt11,525 for every tonne of rice.
She said the measure was aimed at subsidising about 2 million tonnes of Hom Mali paddy out of the expected total production of about 10 million tonnes from the current harvest season from November to December.
The measure is expected to encourage millers to buy rice at prices offered by the government and help farmers affected by falling prices, the commerce minister said.
Farmers participating in the government’s loan scheme are required to put off the sale of their rice. They will be given Bt11,525 per tonne of Hom Mali paddy for storing the paddy in their granaries.
This comprises Bt8,730 in a loan, amounting to 90 per cent of the current market price of Bt9,700, plus financial aid for harvesting and rice-quality adjustment, and stockpiling cost of Bt1,500 per tonne.
Those who have no storehouse of their own will not be entitled to the financial aid and stockpiling cost.
For harvesting and rice-quality adjustment, each household of rice farmers will be given Bt500 per rai of paddy field, but not exceeding 10 rai (1.6 hectares).
The Commerce Ministry will be inspecting rice exporters’ warehouses nationwide to ensure that they have minimum rice stocks of at least 500 tonnes as required by law.
The measure is meant to ensure that rice traders help to absorb rice supply from the market.
The government said the rice price drop was due to lower demand this year, down from 478 million tonnes worldwide last year to 473.4 million, a decrease of 1.5 per cent.
Anan Suwannarat, director-general of the Rice Department, said the |government expected a total of 27.7 million tonnes of paddy to be harvested this year.
That included about 24 million tonnes of paddy in the main crop and 3 million tonnes in the second crop.

Cut millers’ influence, Warong says
Commerce Ministry permanent secretary Wiboonlasana Ruamraksa said the ministry planned to ask the Finance Ministry to waive sales taxes for rice to encourage consumers to |buy and store more rice in their households.
The ministry will also ask major oil firms such as PTT and Bangchak to help to buy rice and distribute it to |customers at filling stations.
Wiboonlasana added that rice |farmers who sell rice directly to consumers were not breaching the law, as direct sales only means to circumvent middlemen and this was permitted.
Meanwhile, Democrat Party |politician Warong Dechgitvigrom yesterday called on the government to reform the country’s rice farming and trading systems.
Warong wrote on Facebook that the government should encourage rice farmers to sell their produce directly without having to rely on middlemen or millers as they have done in the past.
He suggested that the government work with local community cooperatives across the country to buy paddy from farmers to be milled for sale to domestic consumers, as that would reduce the millers’ market influence.
The Democrat also said many large millers were working with “the |old power clique” to curb prices for paddy.
In a related development, chief |constitution drafter Meechai Ruchupan yesterday dismissed a claim by Pheu Thai Party politicians that future governments would be prohibited from subsidising farm crops such as rice. Meechai said the statement was a “complete lie”.
“People who used to be MPs should not deceive their electorates. They completely lack a human quality by lying to the people. I will add some provisions in a new law to prevent politicians from deceiving people,” Meechai said.