Olarn confident rice price will rise under govt pledging scheme

"Ammar has long engaged in rice research, but we have done our own research," Olarn said yesterday on the sidelines of a seminar hosted by Grid Business Solutions Ltd.

Ammar, a prominent economist at the Thailand Development Research Institute, has been sharply critical of the government's rice-pledging scheme, saying that only a few rich farmers would benefit from it.

He supported income guarantees for farmers implemented by the previous government of Abhisit Vejjajiva, which he said resulted in lower costs and covered a large number of farmers.

Ammar said the scheme would only benefit a small number of politically connected millers and exporters, at the expense of consumers and taxpayers.

He did not believe the new government or Thai exporters who win bids to buy rice from the government for export would be able to move prices in the global market.

Ammar predicted that other rice-exporting nations that sell at lower prices, such as Vietnam, would substantially gain from the Thai government policy, as they could sell more rice and gain greater market share.

Olarn said the government would spend about Bt400 billion on the rice-pledging scheme, under which it will buy white rice at Bt15,000 per tonne and jasmine rice for Bt25,000 from farmers.

He denied the policy would place a debt burden on taxpayers, as had past rice-pledging schemes implemented by Thai Rak Thai- and People's Power Party-led governments, to which the current Pheu Thai Party-led administration is seen as a successor.

The government has not yet compensated the Bank for Agriculture and Agricultural Cooperatives for loans worth about Bt100 billion extended under past schemes.

"We will correct the loopholes in previous rice-pledging schemes," Olarn said.

He said he was confident that the government would be able to release rice to the global market at higher prices.

Meanwhile, Narongchai Akrasanee, a former commerce minister, said at the seminar on the economic outlook that more investment next year could boost economic growth to 6 per cent from the 4-per-cent growth predicted for this year.

"If the government can implement financial reforms by developing new mechanisms for fund-raising it will lead to more investment in infrastructure projects," he said.

Private and public investment has yet to return to rates seen before the Asian financial crisis of 1997, he said.

Teerachai Chemnasiri, chairman and chief executive officer of Grid Business Solutions, a consulting firm, expressed concern about rising numbers of migrant labourers from Asean countries. Skilled labourers from other Asean countries expected to move into Thailand after the 2015 full implementation of the Asean Economic Community will compete with Thais for high-paid jobs, he said.