Proposed rice alliance with Vietnam raises some hackles

Posted on September 3, 2012

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Thailand has been advised to act with caution on a Vietnamese proposal to collaborate on rice production given the Thai government’s goal of improving quality and yields while cutting costs for farmers.

Commerce Minister Boonsong Teriyapirom reported to the cabinet on the outcome of the first meeting of the Joint Trade Committee between Vietnam and Thailand held in Hanoi from July 10-12. Vietnam has asked for cooperation from Thailand on rice production.

The cabinet has instructed related agencies to consider an appropriate framework for cooperation.

But Parkdehans Himathongkom, a deputy government spokesman, said the proposal has raised fears of putting Thai competitiveness at risk, especially with the exchange of seeds and rice technology.

The cooperation between Thailand and Vietnam is part of the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy under the aegis of the Agriculture Ministry.

Prasit Boonchoey, chairman of the Thai Farmers Association, opposes the cooperation on rice production, saying Thailand has little to gain from it and suggesting the government is ill-equipped for the venture.

“I doubt the ministers know whether we have various genes of Thai rice ranging from short-cycle grains to premium grade or what Thailand should do for rice development,” said Mr Prasit.

He said what the government should do is help farmers improve rice quality, increase productivity, cut production costs and promote cultivation of premium grades such as Hom Mali.

“I wonder if the government ever conducted a study of the real costs and needs of farmers and their welfare before the announcement of rice pledging or other rice-related policies,” mused Mr Prasit.

Mr Prasit said farmers would be happy if they could enjoy a net price of 10,000 baht a tonne for paddy, but in reality their earnings range from 5,000 to 10,000 due to moisture problems.

“I would like to ask the ministers whether they really know the amount farmers actually get in their pocket,” he said. “Farmers can enjoy only 40% of the huge budget for the populist policy of rice pledging, while the rest is for millers who keep their rice in silos, management costs and unpredictable costs.”

He proposes the government let related parties with rice knowledge seek out appropriate solutions in order to produce better quality.

One initiative he definitely agrees with is the proposed federation of rice-growing Asean countries, as the mechanism will give members greater bargaining power in global trade.

Mr Parkdehans said Vietnam has expressed interest in taking part in the Asean Rice Federation.

Pussadee Polsaram, vice-president for academic affairs at the University of the Thai Chamber of Commerce, said Thailand should be wary of rice production cooperation, as Vietnam has developed quickly via low-quality rice.

Various parties predict Vietnam will become the top producer of rice within the next 10 years, while neighbouring countries such as Cambodia and Myanmar will offer better grades.

In related news, Vatchari Vimooktayon, director-general of the Internal Trade Department, said the government will tighten loopholes in the next rice pledging scheme to prevent corruption by appointing more working groups comprising farmers and related agencies to oversee operations at pledging spots.

Somsak Vongvattanasan, an executive vice-president of the Public Warehouse Organisation, said the maximum amount of paddy to be stored at participating rice millers will increase to 50 times capacity from 30 now in order to solve the problem of low participation. Some 800 millers have taken part in the pledging scheme.

The organisation is seeking 2.3 billion baht in funding to carry out the new pledging programme this year.

Bangkok Post

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