Govt’s rice mortgage scheme starts Oct 7: Commerce Minister

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BANGKOK, Sept 1 – The Thai government’s rice mortgage scheme is set to start Oct 7, with the pledging price of white rice at Bt15,000/tonne and Thai jasmine rice at Bt20,000/tonne, according to Deputy Prime Minister and Commerce Minister Kittarat Na Ranong.

Led by Mr Kittirat, a two-hour meeting on the rice mortgage scheme drew concerned agencies, farmers and rice exporters to discuss the scheme.

Thai Rice Mills Association president Charnchai Raksathananong said the meeting concluded that the mortgage for in-season rice, starting in October, earlier than expected, for the period of the rice price guarantee programme conducted by the previous government is ending.

He said rice mills nationwide confirmed their readiness to deal with the matter although the government does not limit the amount of rice mortgaged in order that farmers can sell unmilled rice at a high price. The meeting also allowed rice mortgage to be done among nearby provinces, he said.

Thai Rice Packers Association president Somkiat Makayatorn said the mortgage pricing will result in higher prices for packed rice in particularly Thai jasmine rice, the price of which was expected to increase Bt40/pack, or about 25 per cent for a 5 kg package. The production cost of white rice of a 5-kg pack is also forecast to rise 40-50 per cent, or Bt20-30/kilo.

The new prices are expected to take effect in October, Mr Somkiat said, while adding that the Ministry of Commerce has asked rice packer entrepreneurs to help low-income earners by producing packed rice at low prices.

Sumet Laomoraporn, chief executive of CP Intertrade Company, accepted that the rice mortgage scheme will help increase the prices of packaged rice, and that entrepreneurs will have to adjust their prices accordingly.

He said the rice prices in the market have already risen even before the mortgage scheme takes effect.

The amount of off-season rice to be produced in September-October is forecast at about 3.5 million tonnes, he said, but it will also depend on the ongoing flood situation in several parts of the country.

According to Mr Sumet, the scheme will help farmers to earn more income and reduce financial disparities.

Meanwhile, Korbsook Iamsuri, president of the Thai Rice Exporters Association said that the government wants rice exporters to understand and accept the rice mortgage policy to purchase unlimited amounts of rice from farmers at pledging prices for improved income distribution.

When the price of white rice reaches Bt15,000 baht per tonne and Bt20,000 per tonne for Thai Jasmine rice, rice export price will be US$850 and it will be more difficult for Thai rice exporters to compete (in the world market) and will have an impact on rice exports next year.

However, she is confident that rice exports will reach the targeted 10-11 million tonnes as eight million tonnes of rice have been already recorded in the first eight months.

The government said that it will help exporters in terms of credit, finding new markets and organising promotional campaigns overseas. To assess the rice export situation next year, it must monitor rice prices after the launch of rice mortgage scheme and whether Thailand’s competitor India will have a clear policy to release more rice or not.

“It is difficult to maintain the markets and the position as the world’s top rice exporter.  However, it is the government’s policy to restructure the country to create a balance, so exporters must help themselves to relieve the impact,” she said.