By PETCHANET PRATRUANGKRAI
THE THAI RICE Exporters Association (TREA) yesterday proposed to the National Council for Peace and Order the setting up of an independent "Rice Board", comprising representatives from all involved to set up rice management policies and development plan
The proposal was made following expectations that the military government would not intervene in the market mechanism any longer, as it has created huge losses for the country as well as destroyed rice exporters’ competitiveness.
The association also believes that Thailand will reclaim its crown as the world’s largest rice exporter this year with expected export volume of 9 million tonnes, higher than the previous projection in January of 7.5 million tonnes due to the lower price of Thai rice and lower export competition from India and Vietnam in the short run.
Association president Charoen Laothamatas said that to increase efficiency of the rice industry management and ensure fair benefit to all involved, an independent Rice Board should be set up. The panel should be free from the impact of political changes so that the Thai rice industry could be developed without any intervention, despite changes in government.
The panel should involve representatives from farmers, millers, local traders, exporters, academics, and representatives from government agencies. The panel should have full authority to draw up policies and increase the role of the market mechanism but should not intervene in the market system, he said.
Charoen said that Thailand had learnt a valuable lesson from market intervention by setting a high pledging price. The government has faced huge losses from pledging and is left with enormous stockpiles, while the rice trading system has been destroyed. The government should no longer set up any subsidy project as it has destroyed both farmers and traders.
He pointed out that without subsidy measures, the government could save at least Bt45 billion to Bt50 billion to help farmers with other long-term measures such as reducing the cost of production.
To manage rice output in the upcoming harvest season second crop and the 2014-15 main crop harvest season, Charoen said the government could negotiate for selling rice in the futures market on export overseas so that farmers will have exact market and gain stable rice price.
TREA honorary president Korbsook Iamsuri said that Thailand needs to have a clear roadmap to develop the rice industry from upstream to downstream with no political intervention.
She said that the current National Rice Policy Committee has no efficiency to manipulate the rice industry, as it comprises only representatives from the government sides. The National Rice Policy Committee should be under the Rice Board as the board would not depend on politics and would focus only on industry development.
The Rice Board could be set up under the Act so that in future politicians would not intervene in the rice industry as in the past, she added.
Chookiat Ophaswongse, honorary president of the association, said that Thai rice exports this year would reach 9 million tonnes, worth about US$4.75 billion (Bt150 billion).
Export volume has increased largely this year as the price of Thai rice has fallen gradually because the market is aware that the Thai government holds giant stockpiles and needs to release them continuously.
The export value will not increase as much as the volume due to the low price of Thai rice. The average price per tonne of Thai rice is expected at $510 a tonne, compared with $620 a tonne last year, said Chookiat.
However, the price of Thai rice has already bottomed out in recent months. The association foresees that the price of Thai rice is expected to increase slightly in the following months by about 10 per cent or $20-30 a tonne.
Vichai Sriprasert, another honorary president, said the pledging project had not only created huge losses to the country, but also destroyed farmers in the long run. The price of paddy rice in the local market has dropped sharply from Bt11,000 a tonne during pledging to only Bt7,000 a tonne now.