Fears move will cause prices to plunge further
POST REPORTERS
The Thai Farmers Association has opposed the state's bid to auction 2.1 million tonnes of rice in its stockpiles, a move it fears will hurt rice prices, which are already plunging.
Association president Prasit Boonchuey said the association would petition Prime Minister Samak Sundaravej and ask him to rethink the plan proposed by Commerce Minister Chaiya Sasomsab.
Mr Chaiya met Mr Samak at Government House yesterday to discuss the plan.
He claimed Mr Samak needed his help to find ways to clear the old stockpile of 2.1 million tonnes of rice and another one million tonnes of second-season rice.
The Commerce Ministry offered to handle the management of rice, but Mr Samak declined, saying three sub-panels already oversee rice mortgages, disposal and alteration.
Mr Samak offered the ministry involvement in the sub-panels. Mr Chaiya suggested the auction, with a minimum bidding price of 14,000 baht per tonne, the price the government paid under the rice mortgage scheme.
He said government-to-government trade often created problems and there was a need to get rid of the stockpiles before the new-season rice arrives in a couple of months.
''The prime minister cautioned that the auction price should not be lower than the mortgage price so farmers have an idea of future prices and continue to get good prices,'' he said.
But Mr Prasit argued that government-to-government deals are the best alternative because the market mechanism would not get distorted.
He estimated that farmers had about two million tonnes of rice paddy in their stocks, half of which would go into the rice mortgage scheme.
The scheme, which ends at the end of next month, pays 12,500-13,000 baht for a tonne of rice with a moisture content of 25%.
The farmers could later fetch less than 10,000 baht per tonne in the market. The government's rice stocks could not get 14,000 baht as Mr Chaiya anticipated, because the rice in its stocks is old.
Mr Prasit questioned the government's decision to hold on to its stocks while rice prices hit a record high of $1,080 per tonne in April due to panic over a shortage of food supplies.
Under this year's 25 billion baht paddy mortgage scheme, the Bank for Agriculture and Agricultural Co-operatives purchases the rice at a guaranteed price of 14,000 baht a tonne for 100% white rice paddy with moisture content of up to 15%.
The project's aim is to purchase up to 2.5 million tonnes of paddy, and has been designed to solve the problem of falling rice prices.
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