Thai rice farmers have been the focus Prime Minister Abhisit Vejjajiva’s government's attention over the past two years in a bid to win over the rural community’s support in the lead up general elections. Thailand is the world’s largest rice exporter of around 10 million tonnes a year, ahead of Vietnam and India.

The rural vote based on populist policies were the key to success of former Prime Minister Thaksin Shinawatra’s rise to power until being ousted in a coup in 2006. The opposition Puea Thai Party, now led by Thaksin’s younger sister, Yingluck, hopes to secure the rural vote by offering substantially higher rice prices to growers through a government sponsored rice buying programme.

Government to buy up rice

Under the scheme the opposition Puea Thai Party’s program promises to pay farmers 15,000 baht per tonne (496 US dollars) or more to be purchased directly by the government. The rice will be stored in warehouses and sold later. Under the Abhisit government’s program farmers registered in the scheme are guaranteed a minimum income of 10,000 baht (330 US dollars). The program does not require the government to purchase rice sold through rice traders.　

Kiat Sittheeamorn, President of the Thailand Trade Representative Office, says the government’s reforms have moved away from price intervention policies adopted in the past. He says, in the past policies were more focused on "income support," which means "we provide direct support to the farmers without distorting the price." He says that is a good policy because the money goes straight to the farming community, thus leaving no room for "corruption," as he sees it.

"Open to corruption"

Economists say the scheme assists over five million households, especially smaller farming operators in the poorer regions of the country. Viroj NaRanong, an analyst with the think tank, Thailand Development Research Institute (TDRI), says the Puea Thai’s "price pledging program" may also be open to corruption. He believes the major problem is that "the government itself doesn’t have enough budget" to provide to all the farmers with money who want it. "So usually the money goes to provinces that have good connections with the politician who run the ministry of agriculture. This measure has been undertaken for a very long time and it always is very corruption prone."

Rice exporters are also concerned the higher prices offered by a Puea Thai-led government would undermine Thailand’s capacity to sell to the international market. Vichai Sriprasert, president of exporter, Riceland International Ltd and board member of the Thai Rice exporters Association, says, "The market mechanism is the best, we can accommodate it. I say that the income support should be better." He adds that small farmers, particularly in the north east, "now have their own account. The government pays them the difference between the target price and the actual market price – they get the actual cash in their bank account and lot of farmers benefit from this."

But political analysts say many farmers remain loyal to Thaksin for his populist policies when he was in power and look at other promises from other candidates to decide how they will vote on July 3.

Author: Ron Corben
Editor: Sarah Berning