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 ECONOMY -
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Minister faces an uphill taskWith so many issues to be tackled, there was no honeymoon period after for the new Agriculture Minister Prapat Pothasuthon after he took over the job in April Walailak Keeratipipatpong Prapat Pothasuthon faces a daunting task as agriculture minister these days. The ministry has been dealing with many hot issues, mainly from rampant farmers protesting falling agricultural product prices. Then there is the alleged meddling in the daily administration by Banharn Silpa-archa, leader of the Chart Thai Party. Mr Prapat succeeded Pongpol Adireksarn who was removed from the post on April 12 after having a bitter conflict with Mr Banharn. There was no honeymoon period for him as farmers across the country rallied, calling for higher product prices. The high moisture content in paddy from the second crop which entered the market almost at the same time in May forced farmers to sell the crop quickly for cash. They have no proper method to upgrade the quality and keep the grain while waiting for the price to rise. The price of paddy with 25% moisture from some provinces fell to around 3,000 to 3,300 baht a ton and the average paddy price for this year is expected to be 4,741 baht, lower than 5,579 baht the previous year. Prices of key crops including sugarcane, oil palm, and coffee have been down since the start of the year in response to weak world market prices. Cane planters received only 459 baht a ton for the 2000/2001 cane crop compared with 484 baht for the previous crop although domestic cane output was 53.901 million tons, or a 6.63% drop from the previous crop. The world market price of rice in May was $275 a ton, a drop from $295 six months ago and $310 year-on-year. The price of sugar in the London market stayed at the low level of seven cents a pound Ñ the same price quoted six months ago. Reduced income The reduced income led to a contraction in the gross domestic product in the agricultural sector, excluding fishery and livestock, of 0.49% in the first quarter of this year, a report from National Economic Social Development Board says. The GDP of the sector in the first quarter of 1999 was 5.5% and rose to 7.2% in the second quarter but started to drop to 3.5% and contracted 1.7% in the third and fourth quarters of last year. To address farmers' problems, the government has often applied the Òplay for time'' method to quell the protests by promising to buy grain at prices farmers want, sometimes higher than market prices. The Commerce Ministry reported that about 10.3 billion baht has been spent on market intervention (8.9 billion baht) and supporting production processes (1.4 billion baht) in the first half of the year. During 1995-2000, the government, through the Committee for Farmers Assistance Policies, has spent 35.97 billion baht to shore up the prices of agricultural products, of which 17.48 billion baht was for rice. In 2000, the committee plans to spend about 7.64 billion baht to intervene in 17 agricultural products. Financial assistant The spending goes to rice (3,203 million baht), tapioca (984 million baht), sugarcane (800 million baht), oil palm (500 million baht), pineapple (474 million baht), raw milk (360 million baht), poultry (300 million baht), trash fish (245.6 million baht), pork (235 million baht), maize (197.7 million baht), red onions (130 million baht), onions (67 million baht), eggs (60 million baht), chilli (32 million baht), coffee (22 million baht), tuna (20.2 million baht) and pearl barley (10 million baht). Financial assistance in the form of low-interest loans from the state bank, the Bank for Agriculture and Agricultural Cooperatives, was also provided for some products such as rice and sugarcane. Last month, the bank was ordered by the Finance Ministry to provide a 5.32 billion baht loan for the Sugar Fund. With the loan, the Fund will be able to add 100 baht/ton to the preliminary cane price paid to planters, making the price for the 1999/2000 sugarcane crop 550 baht a ton. To avoid using a large budget to assist the farm sector, the government should speed up agricultural restructuring plans to improve production efficiency, product quality, and to encourage production of products to meet market demands, according to former agriculture minister Mr Pongpol. Moreover, he said the failure of the country's farm sector resulted mainly from a lack of continuity in the administration of the Agriculture Ministry where politicians come and go too quickly and where many have enjoyed using their positions to meddle with government budgets to favour their voters. |
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