BANGKOK — The interim cabinet on Tuesday approved a higher-than-expected agricultural subsidy under which the government will spend at least 20 billion baht to guarantee prices for struggling rice farmers.
Responding to the some of worst market conditions in years, Prime Minister Prayuth Chan-ocha on Tuesday said his cabinet approved the subsidy to slow the flow of rice onto the market and help farmers with the policy, which is nearly identical to that of the former civilian government.
Under the structure approved today, the government will pay 13,000 baht per metric ton of jasmine rice, a figure about 1,500 baht over what was proposed by the country’s rice management committee that Prayuth chairs.
“I hope the farmers are satisfied,” Prayuth said Tuesday. “There is news about those who are still unsatisfied. I want to ask for their understanding and sympathy for the government, as there are currently many challenges, such as the effect from the rains.”
The idea is that farmers effectively sell their rice to the government. In practice, the authorities consider the subsidy as a loan the farmers secure with their rice. The rice will be kept in storage in hope the reduced supply will drive up market prices. Farmers who join the program can reclaim their rice months later when, theoretically, market conditions improve, and repay the loan.
It’s the same scheme for which ousted Prime Minister Yingluck Shinawatra is currently being tried for malfeasance due to losses it sustained. The military government last week announced it would personally fine her 35 billion baht for the program’s failure.
Unlike Yingluck’s subsidy, the junta is capping the amount of rice per household. It’s expected that two million farmers will sign up for the program, which is in effect now through February.
The subsidy is managed by the Bank of Agriculture and Agricultural Co-Operatives. Farmers will be paid 90 percent of current market price at 9,500 per metric ton, plus 2,000 baht for harvesting costs and 1,500 baht for storage. Those who don’t have barns to store rice will not receive the storage cost.
Prayuth ordered the market be monitored for any attempted disruption or manipulation.
The program comes as many have been campaigning for help for the farmers, who are suffering dire losses due to plummeting prices for rice. Commerce Minister Apiradi Tantraporn on Monday encouraged farmers to reach their consumers online for direct sales.