BANGKOK: Thailand’s military regime is to boost struggling rice farmers’ incomes by providing them with loans totalling $1bn — even though it recently fined a former prime minister the same amount for running her own crop subsidy scheme. The latest government handout to 2m households is an effort to ease growing hardship in the country’s populous rice-growing heartlands, where support for the generals is historically weak.
The economic shock of the fall in the international price of jasmine rice to a near nine-year low has emerged as a growing problem both for farmers and the junta. The generals declared an end to allegedly wasteful civilian government subsidies when they seized power in 2014 but have since been forced to inject funds into rural areas because of collapsing agricultural prices.
Farmers will be able to get money from the new Bt35.8bn ($1.02bn) rice scheme if they agree to store their crop for six months, Apiradee Tantraporn, commerce minister, told reporters on Monday. She said the stockpiling would help limit supply and buoy prices. Market rates for high-quality jasmine grains, which account for about a quarter of Thailand’s total rice export crop, have fallen from about $1,200 a tonne in 2012-13 to well below $800 a tonne this season, according to the Thai Rice Exporters Association. “If we can push up prices of jasmine rice, prices of other rice varieties will go up too,” Ms Apiradee said.
The government’s announcement comes after it imposed a Bt35bn fine on Yingluck Shinawatra over the rice subsidy scheme her administration ran before the generals toppled it in May 2014. Ms Yingluck also faces criminal prosecution and a jail sentence of up to 10 years for alleged negligence related to the multibillion dollar programme. Ms Yingluck has denied any wrongdoing and has claimed the pursuit of her is politically motivated. Thaksin Shinawatra, her brother and predecessor as prime minister, is the Thai military’s bête noire. The rice-growing areas of the north and north-east are noted centres of support for the political machine of the Shinawatra family, whose parties have won every general election since 2001.
The new rice programme is less sweeping for now than the Yingluck government’s upfront cash payments to all farmers, but there are similarities in concept and execution. While the latest scheme is being pitched as a loan rather than a subsidy, it was not immediately clear what the repayment conditions or penalties for default would be.
The junta’s initiative also carries echoes of the Yingluck era’s ill-fated effort to manipulate world rice prices by stockpiling grain. Other growers, including India, ramped up production in response, toppling Thailand from its position as the world’s leading rice exporter. The Thai government is keen to head off any risk of unrest during the sensitive process of royal succession triggered by the death in October of King Bhumibol Adulyadej after more than 70 years on the throne.
