FRIDAY, March 29, 2024
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Farmers profits slashed by sudden cut to pledging price

Farmers profits slashed by sudden cut to pledging price

Cash return reduced from over Bt3,300 per tonne to Bt360 a tonne, according to BioThai estimates

The government’s cut in the minimum price guaranteed under its rice pledging scheme – to Bt12,000 a tonne – will result in each farmer making a profit of only Bt360 a tonne if it takes effect on Sunday, as scheduled. That is a huge drop from the Bt3,360 profit they gained at the original price rate of Bt15,000 a tonne, according to BioThai Foundation’s Withoon Luenjamroon.
The reduced profit comes mainly from higher costs, notably a rise for leasing farmland, when the controversial policy was put in effect about a year and a half ago. But it also stemmed from corruption and cheating by millers through several illegal techniques used to take advantage of the scheme and exploit the populist policy, he said.
Farmers profits slashed by sudden cut to pledging price Withoon said the change would have been acceptable to farmers if it not imposed immediately, as they could have cut investment in the current crop and may have been able to lobby for an effective anti-graft mechanism in advance. “If all information is made public and the scheme is implemented in a transparent manner, the farmers would accept it,” he said.
Millers have been taking advantage of farmers via humidity deduction at rates that they set despite standard figures, he said. Other techniques, either long practised or newly conducted under the rice pledging scheme, are forging quota registration, or selling and reselling the same lots of rice, plus stealing rice from government or private custody and selling it.
There are around large-scale 5,000 millers and 10,000 of a smaller size. Some 700 of them, reportedly with ties to local and national politicians, operate pledging at 925 locations, after being permitted to take part in the scheme. “These millers are estimated to each enjoy between Bt93.66 million and Bt150.16 million, or around Bt3,278 to Bt5256 per tonne.”
Burdened with higher costs already invested in the current crop and normal rises in farm expenses, farmers usually get just Bt360 per-tonne profit – a huge drop from the Bt3,360 they got under the scheme’s original rate of Bt15,000, Withoon said, citing a BioThai study.
The government has decided to cut the rate to Bt12,000, and to impose a Bt500,000 limit on each farm household.
These changes are due to take effect on June 30, but heavy criticism by farmers and threats to organise a series of mass rallies in protest at the cut has forced the government to consider their demand. A final decision is expected by tomorrow.

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