Thailand approves $2.2 bln rice farmer aid

05.09.2017

The Thai government will offer rice farmers a total of $US2.2 billion in loans and handouts to help stabilise prices.

Thailand's government has announced $US2.2 billion ($A2.8 billion) in loans and handouts to help stabilise prices for rice farmers, a politically influential group whose heartland is in regions where opposition to the military junta is strongest.

Thailand's staple food has long been a factor in its politics.

The announcement by the commerce ministry came a week after former prime minister Yingluck Shinawatra fled into exile ahead of a court verdict in a criminal negligence case over a rice subsidy scheme that cost billions of dollars.

The ministry said it would provide $US1.57 billion in handouts to farmers and $US633 million in loans that will cover 3.7 million households. The program will span the seasonal harvest from the start of November this year to the end of February 2018.

"This is to help take 2 million tonnes of rice from the market," Nuntawan Sakuntanaga, head of the commerce ministry's department of internal trade, told reporters.

The government introduced similar short-term loans and cash handouts for rice farmers last year that cost the state $US2.3 billion to cover four million households during the same period.

"This subsidy program is essentially similar to past rice subsidies introduced by previous governments," said Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand who is critical of subsidies.

"The bottom line is these cash handouts create more debt for farmers," Somporn said.

After hitting a four-year high earlier this year, the price of benchmark Thai 5-percent broken white rice has tumbled by nearly 20 per cent over the last two months to $US372.50 per tonne, its lowest since April.

Thailand's main rice-growing areas are the northeastern and central regions, which have traditionally been strongholds of support for the populist Shinawatra movement of Yingluck and her brother Thaksin, who was overthrown in a 2006 coup.


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