Farmers Hail Government Rubber Price Supports
17 October 2014, 06:20 SEAST
The natural rubber and farmers councils have welcomed the government’s measures passed yesterday to help farmers suffering from the slump in rubber prices.
Under the measures approved at the National Rubber Policy Committee yesterday, farmers who each own no more than 25 rai of rubber trees will receive 1,000 baht per rai of subsidy but the total can’t exceed 15,000 baht.
The subsidy, worth about 8.5 billion baht, will be disbursed through the Bank for Agriculture and Agricultural Cooperatives (BAAC) and the money will be distributed from next month.
The government will also take steps to stabilise the fall in rubber prices.
The measures also call for a long-term plan to introduce alternative crops for rubber growers to minimise risks from relying on rubber alone.
Emerging from the committee meeting yesterday, Deputy Prime Minister Mr Pridiyathorn Devakula, who oversees economic affairs, said the outlook for rubber prices has improved. Compared with this time last year, global rubber stocks have reduced from 2.9 million tonnes to between 2.3-2.5 million tonnes.
Domestic rubber stock fell from 530,000 tonnes to 447,000 tonnes year-on-year.
The figures indicate a gradual rise in rubber prices in the country as futures trade prices have also edged up.
Mr Pridiyathorn said the government could not agree to the farmers’ demand for a 2,520-baht subsidy per rai.
It decided to settle at 1,000 baht per rai because price stabilisation measures will be put in place at the same time to help raise the rubber price to 60 baht a kilogramme, up from about 45-47 baht/kg currently.
The subsidy will help 850,000 farmers at a cost of 8.5 billion baht.
The deputy premier said the price stabilisation steps involve the government’s purchase of rubber sheets and latex from farmers and rubber cooperatives. That increase in demand will lift rubber prices.
“We’re not reluctant to buy the stocks because we have orders coming in for rubber over coming months. There will be no more problems of overflowing stock experienced by the past government,” he said.
In the long run, farmers will be encouraged to plant alternative crops on the land where they had cut down old trees which no longer produce latex. The new crops will help farmers minimise risks from being dependent on rubber. The farmers could also choose to raise cattle, he said.
Farmers who join the alternative crop project will be eligible for a special loan of up to 100,000 baht per person towards the venture.
Meanwhile, the rubber and farmer councils came out in support of the measures.
Natural Rubber Council of Thailand president Uthai Sonluksub said the measures to prop up the rubber industry were acceptable and should be able to take the rubber price to 60 baht/kg in a couple of months.
Although the current investment cost of producing rubber per rai stands at 65 baht/kg the 1,000-baht subsidy will enable farmers to survive the financial crunch, he said.
National Farmers Council vice-chairman Sittiporn Jariyapong said the council had asked for a 2,520 baht per rai subsidy.
It agreed with the amount of 1,000 baht a rai as the government also offered other measures that will help inflate the rubber price. If in the next few months the rubber price does not climb to 60 baht/kg the farmers will negotiate a way out with the government, Mr Sittiporn said.
He said he supported the government’s offer of loans for alternative crops and income supplementary ventures. The rubber price over the next three to five years is unlikely to exceed 80 baht/kg and farmers will have to find ways to supplement their income.