though it has ruled out a rice-pledging scheme.The
Fiscal Policy Office and the Bank for Agriculture and Agricultural Cooperatives
have been tasked with jointly considering the appropriate measures to help
farmers. The ideas are expected to be proposed to the Finance Ministry next
week for consideration, said finance permanent secretary Somchai Sujjapongse.
The plan to seek measures to increase farmer
income was initiated by Finance Minister Apisak Tantivorawong.
Mr Somchai said a rice-pledging scheme was not
included, as such programmes always have issues with management and fraud. He
said that when the pledging price exceeds the pledging price, the government is
forced to foot the bill as farmers baulk at redeeming the pledged farm
products.The farm income guarantee scheme is one of several measures under
consideration, Mr Somchai said, adding that all the measures have pros and
cons, but the government must try to close the loopholes on fraud and implement
those that make budgetary sense.
The paddy-mortgage scheme was one popular plan
employed by past governments to help farmers when rice prices tumbled. Governments
that adopted the paddy-subsidy scheme always limited volume and set reasonable
pledging prices to encourage farmers to redeem.The Yingluck Shinawatra
government's rice-pledging scheme, however, set the pledging price at 40-50%
above the market price without restrictions on volume, resulting in a hefty
loss of more than 500 billion baht.
A farm income guarantee scheme was initiated by
the Abhisit Vejjajiva government. That scheme paid farmers the difference
between benchmark prices and market prices, setting a cap of 25 tonnes per
farmer household. Under this arrangement, if the benchmark price falls below
the guaranteed price, the government pays farmers the difference, with prices
being updated every two weeks.
To keep from repeating the massive losses
incurred by the Yingluck government, the current government last year adopted a
storage pledging scheme for 2 million tonnes of hom mali and glutinous rice at
13,000 baht a tonne, aimed at encouraging farmers to store rice in their own
barns to delay releasing new supply to the market to shore up weak prices.
The pledging price of 13,000 baht a tonne was
set based on 90% of the market price at that time, plus 2,000 baht for
harvesting and improvement costs, along with another 1,500 baht for storage costs.
Farmers who have no barns to store their paddy did not receive the 1,500-baht
storage cost payment.Mr Somchai said programmes to help sustain farmer income,
including crop insurance, must be done 