Thai junta reaches out to rice farmers with subsidy

Thai farmers harvesting rice at a field in the Takbai district of Thailand's restive southern province of Narathiwat on March 17, 2016.
Thai farmers harvesting rice at a field in the Takbai district of Thailand's restive southern province of Narathiwat on March 17, 2016.PHOTO: AFP

BANGKOK (AFP) - Thailand's junta on Tuesday (Nov 1) agreed a US$550 million (S$764.4 million) rescue package for the kingdom's struggling rice farmers, many of whom hail from the political heartlands of the civilian government it toppled.

Rice, Thailand's staple dish and top agricultural export, is a politically delicate area and with the grain prices slumping, the junta is desperate to head off potential flashpoints with farmers.

On Tuesday the cabinet signed off extra funds to help farmers suffering from the dip in rice prices, and to hold the grain back from the market for several months to avoid an oversupply glut.

The cabinet "agreed to aid rice farmers in harvesting and improving rice quality for hom mali (jasmine) rice for the crop year 2016/17 with 19.375 billion baht (around US$550 million)" it said in a statement.

Two million farmers will be eligible for a total subsidy of up to 13,000 baht (S$515.6) per tonne of Thailand's famed strain.

Prices have slumped to as low as around 6,000 baht per tonne for some farmers, depending on the quality of their harvest.

The cash injection comes just weeks after the junta ordered ex-premier Yingluck Shinawatra to pay US$1 billion in compensation for a rice scheme under her government which it toppled in 2014.

The military says Yingluck's policy, which paid farmers above the market rate for the grain, was a corrupt and a craven effort to buy votes from poor rice farming areas.

She says it was a fair and long-overdue effort to funnel a share of state money to the poor and neglected north and northeast.

Yingluck faces a decade in jail if found guilty of criminal negligence linked to the policy.

The army vowed to abolish populist polices and curb a handout culture for the kingdom's large agriculture sector.

Junta leader Prayut Cha-o-cha said he hoped farmers would be "satisfied" by the subsidy.

"Please symphathise with government... there are many problems to handle," he told reporters on Tuesday.

He also repeated remarks accusing unnamed politicians of colluding with mill owners to drive down rice prices and foment discontent.

The junta is "investigating the politicians that I told you about yesterday who are behind the plunging rice price," he said, without elaborating.

Thailand's economy has struggled despite a junta pledge to boost growth with spending on infrastructure.

The death of Thailand's revered King Bhumibol Adulyadej on Oct 13 has plunged the country into intense mourning and is expected to further chip away at growth.

Farmers were already feeling the pinch with commodity prices on the slide.

"We are making losses as the rice is cheap but fertiliser is expensive," Saad Pirompool, a 51-year-old rice farmer from Nakhon Pathom province, told AFP.

"My family is trying not to spend money," he said.