Thailand’s rice export industry group will finance storage of 100,000 tonnes of Asia’s staple food in an attempt to stem falling prices as farmers bring in their main crop, the head of the group and the Thai commerce minister said on Friday.
The measure is the latest announced by Thai authorities as they seek to soften the impact on farmers of selling their grain at prices near an 8-year low.
Rice exporters will buy the rice at market price and the Thai Rice Exporters Association will foot the bill for storing it from December through February, Commerce Minister Apiradee Tantraporn told reporters.
Taking the rice off the market for a few months would help stabilise prices, she said.
Thailand is one of the world’s largest rice exporters and is still sitting on stockpiles of millions of tonnes of rice built up under the generous subsidy scheme of former Prime Minister Yingluck Shinawatra.
The military government of Prime Minister Prayuth Chan-ocha ended the subsidy scheme when it overthrew the remnants of Shinawatra’s government in May 2014. Prayuth criticised the subsidies as vote-buying measures and offered little support to Thailand’s rural poor during his first year in power.
But with the economy performing poorly and discontent rising with Prayuth’s government in the countryside, the junta has announced a raft of measures since August aimed at boosting the rural economy.
The cabinet on Tuesday approved a US$1.13 billion (S$1.6 billion) plan to fund soft loans and grants to farmers.
The cost of storing the rice will be around 50 million baht (S$2 million), said Charoen Laothamatas, head of the Thai Rice Exporters Association.
“We have to help each other. As Thais, we’re all in this together,” Charoen told Reuters. “We don’t want to see farmers suffer.”
The 100,000 tonnes of rice is worth around 2.6 billion baht. Thailand has stocks of about 13.3 million tonnes but aims to reduce that to 4 to 5 million tonnes by the end of next year, Charoen said.
Thailand would export no less than 10 million tonnes of rice next year, he said. That would be around the same level as the 9.5 to 10 million tonnes the association expects Thailand to export in 2015.
The government is negotiating deals with Iran and African countries, he added.