Commerce Ministry seeks Bt260 bn to bolster rice pledging

However, the ministry is confident that the pledging scheme will not run a huge loss because it will earn a return from selling 4 million to 5 million tonnes under government-to-government contracts this year.
Commerce Minister Boonsong Teriyaphirom said the G2G deals were expected to reach at least 4 million tonnes, pushing the country’s total exports up to between 8.5 million and 9 million tonnes this year.
The government will maintain the scheme at the same pledging price in the following year to continue driving up the rice price in the market.
The pledging price for paddy white rice is Bt15,000 a tonne, higher than the market quotes of Bt10,000-Bt11,000, and for jasmine rice is Bt20,000, versus Bt14,000 in the market.
Spending on the pledging scheme should remain at this year’s level of Bt260 billion because the same quantity of 31 million to 32 million tonnes of paddy is expected from the main and second crops.
The ministry has not spent huge sums on the rice subsidy and created huge losses, Boonsong said. Some revenue from the G2G deals will soon be remitted to the Bank for Agriculture and Agricultural Cooperatives.
“Thailand should be able to supply 4 million to 5 million tonnes of rice under the G2G contracts to many trading partners. For instance, about 2 million tonnes to China, 1 million tonnes to Indonesia, 1 million tonnes over two years to Bangladesh and 250,000 tonnes to Ivory Coast.”
The government will send a mission to the United Arab Emirates and Bahrain next month to strengthen cooperation on supplying rice to them and other Gulf Cooperation Council (GCC) countries.
Thailand should be able to ensure food security for the GCC by shipping them 1 million tonnes of rice each year. The strategy to guarantee a rice supply to the group should also help prevent the perceived problem of foreign investors buying up land in Thailand to raise rice.
The GCC comprises Saudi Arabia, Kuwait, Oman, the UAE, Qatar and Bahrain.
The Philippines, Africa and the Middle East are other potential customers for G2G rice sales.
According to the ministry’s report, the government has already spent about Bt200 billion for the rice pledging scheme and Bt60 billion for subsidising rubber, cassava and red onions.
The government plans to continue the cassava pledging scheme in the upcoming harvest season, but it will not stock cassava as tapioca chips or starch any longer as they have not made much money for the government.
To ensure a high return and reduce in inventory holding costs, the government plans to supply all pledged cassava to ethanol producers next year.
The ministry has reported about 6.7 million tonnes of cassava as entering the pledging scheme this year. The government is negotiating with China to release those stocks soon.