Lowest rice prices in 10 years force farmers to seek new sales ideas

FARMERS ARE struggling to survive the lowest rice prices in a decade. For many, profits from selling paddy to rice millers are not sufficient to pay their debts and income from directly retailing their produce to consumers is unreliable. 
This harvest season has seen the lowest prices in the last 10 years with jasmine paddy sold for about Bt5 per kilogram. Farmers have complained that profits for selling paddy this year were not enough to pay off debts incurred to sow the crop. Rice millers have also said they could not pay higher prices to farmers because the global price had fallen so low.
Several academics have suggested that farmers should try selling rice directly to end consumers, bypassing middlemen. 
Justice Ministry deputy permanent secretary Tawatchai Thaikyo yesterday assured farmers that direct sales would not violate the law, dismissing comments by a lawyer who said farmers could be liable for legal penalties under the Direct Selling and Direct Marketing Selling Act. 
“That act is used to regulate direct sellers within a network of independent distributors to reach out to consumers,” Tawatchai said. “This law is not related at all to farmers’ efforts to sell their rice to end consumers.” 
Buri Ram farmer Sopin Selalak said her family had been hit hard by the very low paddy price this year, but they had no option but to accept the circumstances.
“Normally, we can sell jasmine paddy for around Bt10 to Bt11 per kilogram and we can get some profit. But selling for only Bt5 per kilogram means we not only do not have any profit from selling rice, but we won’t have enough money to pay off our debts,” Sopin said.
She added that her family could mill some of the rice for sale in Bangkok directly. But only some of the rice could be sold directly because the family does not have many customers and the profit is unreliable.
“We can get far better prices from selling rice ourselves, but we cannot wait until we can sell all of our rice and pay out our debts. Moreover, rice can spoil, so we cannot store a lot of rice waiting for sale,” she said.
“I am trying my best to find a new market and help my family get through the financial crisis. If the rice price remains low until next year, we cannot just change jobs because we are farmers and we don’t know how to do anything else.”
The head of Ban Kiatcharoen Farmers Group, Chanida Srila, referred to similar financial problems, in which farmers’ income is insufficient to cover their needs.
“Many of our members borrow money from the Bank of Agriculture and Agricultural Cooperatives and they have to pay it back when the rice is harvested. They just cannot wait for money from the direct sale of rice to customers. They must sell the rice to the mills to get one big sum of money to pay their debts,” Chanida said.
However, she said, her group grows organic rice, which earns better prices when sold to mills so the low prices were not such a heavy burden.
The problem has been addressed by Kasetsart University faculty of economics lecturer Decharut Sukkumnoed, who has campaigned to urge farmers sell their produce themselves. He also requested the government provide micro-finance funding to farmers to provide them with working capital as they sold their produce.
Decharut said many farmers were interested in joining the project and many people wanted to help farmers in various ways.
“I have seen many people who want to help farmers by buying their products. Some rice mills volunteered to help the farmers mill their paddy and Kasetsart and Thammasart universities allowed farmers to stand by their promises to help to sell their rice. This is a good start for this campaign and I’m glad everyone is very energetic in helping the farmers,” he said.
The Rice Policy and Management Committee is expected to discuss measures to shore up rice prices at its meeting today.