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Cabinet OKs Bt7 bn payouts to farmers

Sep 28. 2011
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By The Nation

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The Cabinet yesterday approved a budget of Bt7.204 billion to compensate farmers affected either by the now-defunct income-guarantee scheme or by floods.

The government assistance measure has been divided into two parts. First, farmers whose plantations were damaged by flooding will be compensated Bt2,222 per rai as well as 10 kilograms of rice seed per rai for up to 10 rai (1.6 hectares).

Second, compensation will go to farmers under the income-guarantee scheme under former prime minister Abhisit Vejjajiva’s policy whose production was harvested earlier than its mature period. They will receive compensation of Bt1,437 per tonne of paddy rice. Moreover, farmers under this project cannot participate in the new government’s rice-pledging scheme, which will be implemented on October 7.

Agriculture Minister Theera Wongsamut said the Bank for Agriculture and Agricultural Cooper-atives will be responsible for on paying the compensation. The government will allocate a budget to subsidise the bank later.

Meanwhile, The Jakarta Post yesterday reported that Indonesian state logistics agency Bulog wanted Thailand to fulfil its commitment to sell rice to Indonesia under existing contracts, despite Thai claims that the stipulated price is too low.

“They have to fulfil the rice-sales contract signed by both the Indonesian and Thailand governments in August,” Bulog chief Sutarto Alimoeso said.

Under the contract, Thailand must ship 300,000 tonnes of rice to Indonesia this year. Sutarto said Bulog had not received a response to two letters sent to Thailand’s Commerce Ministry early this month.

Thailand, the world’s largest rice exporter, previously cancelled plans to sell rice to Indonesia, citing low prices, Thai Commerce Minister Kittiratt Na-Ranong said.

Indonesia, the third-largest rice consumer in the world, signed a contract in August to import 300,000 tonnes of rice from Thailand to rebuild its stockpiles and curb domestic price hikes.

“The rice price in the contract is quite good for Indonesia but it is not too low,” Sutarto said, adding that Indonesia would reduce the price it paid for rice by 10.5 per cent under the bargain.

Sutarto said that Bulog and Indonesia’s Trade Ministry, Foreign Ministry and embassy in Bangkok were attempting to persuade the Thai government not to cancel its contract.

Indonesia remained optimistic that Thailand would not cancel the agreement, Sutarto said, as the two nations had a long-standing record of friendship and business deals. However, Bulog was aware that Thailand’s rice producers were experiencing difficulties.

“We have other markets, such as Vietnam, which have never breached any agreement,” he said, adding that Indonesia was also considering importing rice from China, India, Burma and Pakistan.

The suspension of Thai rice imports has not affected current supplies in Indonesia, as the imports would have been used to increase stockpiles next year.

As of this month, 200,000 of a planned 500,000 tonnes of rice imports have arrived from Vietnam.

Indonesia previously planned to import a total of 800,000 tonnes of rice this year, including 500,000 from Vietnam and 300,000 from Thailand, to maintain a 1.5-million-tonne stock for market operations to stabilise prices, Sutarto said.

Existing supplies will be enough for the next four to five months, he said.

Separately, Coordinating Economic Minister Hatta Rajasa said the Indonesian government was committed to increasing its minimum rice stockpile to 2 million tonnes by 2012 or 2013.

Hatta said additional rice imports were needed to curb rice-price spikes in the domestic market, which had become the largest contributor to inflation in August.

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