Exporters call for long-term rice vision
Action urged to help various stakeholders
The new government is being urged to set a clear direction on Thai rice development, covering not just the short term but also the medium term and the long run to sustain the country’s cash crop.
According to Charoen Laothamatas, the president of the Thai Rice Exporters Association, the government should take into account the overall Thai rice industry, not just the price of paddy.
“The best solutions should serve the overall industry,” Mr Charoen said. “Rice prices are mainly reliant on demand. Thailand should promote rice production that matches consumer demand.”
He called on the government to be open to opinions from all stakeholders, be they farmers, exporters, millers or rice packers.
The stakeholders will offer proposals for the country’s rice development policies to benefit both upstream and downstream players.
In the short term, exporters agree on an income guarantee policy to help farmers because it’s considered a good method that uses less budget and causes minimal damage compared with the ill-fated rice-pledging scheme of the Yingluck Shinawatra government.
But the income guarantee should be offered at the appropriate rate to prevent farmers from making losses, Mr Charoen said, while the farmer registration process should be stringent to avoid corruption.
The guaranteed price should not be too much higher than the market price, as such practices will motivate farmers to step up rice planting and eventually lead to oversupply, he said.
The government should also help tackle existing management costs such as packaging, handling and logistical expenses that exceed those of competitors.
In the medium term, rice policies should focus on rice seed development to reduce production costs and serve market demand, Mr Charoen said.
The government should hold talks and team up with all stakeholders to develop rice varieties, while megafarm projects should be continued but overseen by knowledgeable people and rice experts, not by kamnans (subdistrict headmen) or village headmen, he said.
In the long run, the country should have a 20-year rice development plan to set the broad direction for industry development. The long-term plan should cover production, rice zoning, irrigation systems development and rice seed development, Mr Charoen said.
“A clear direction is important for rice industry development,” he said. “Currently, Thailand’s rice milling capacity is as high as 120 million tonnes a year, while rice paddy output averages only 32 million tonnes. This is considered a waste of resources.”
The rice exporters themselves now trade mainly with a speculative approach, while the global rice trade is full of risk factors such as foreign exchange fluctuations and fiercer competition.
“We [all parties] need to discuss the annual quantity of rice production and varieties that the country should produce and export in the world market,” Mr Charoen said. “Once we find our rice production is more than demand, we should decrease production and change to producing other crops.”