August 21, 2019 / 6:43 AM / 2 months ago

Thailand approves $682 million in new rice insurance scheme

BANGKOK (Reuters) - Thailand’s National Rice Policy Committee, chaired by Prime Minister Prayuth Chan-ocha, on Wednesday announced 21 billion baht ($682 million) in subsidies to help stabilize prices for rice farmers hurt by drought and a strong baht.

Under the new rice scheme, the government will agree to pay farmers a fixed price for a set amount of production if market prices fall below benchmark prices during the main harvest seasons.

Thailand is suffering its worst drought in a decade, which has hurt farmers and reduced supplies, lowering the country’s rice exports. A strong baht and ample global stockpiles have further curbed sales.

“Since the start of the year, Thailand has exported 5.29 million tonnes, a reduction of 22% compared to the same period last year,” government spokeswoman Narumon Pinyosinwat told Reuters.

“This generated $2.8 billion in revenue, a reduction of 17% compare to last year, and this is due to the strong baht and the drought,” she said.

Under the new scheme, jasmine rice will be insured at 15,000 baht ($487.49) per ton up to a maximum of 14 tonnes per household, jasmine rice grown outside of irrigated area will be insured at 14,000 baht ($454.99) for up to 16 tonnes per household, and Prathum Thani jasmine will be insured at 11,000 baht ($357.49) up to 25 tonnes per household.

Glutinous rice will be insured at 12,000 baht ($389.99) a ton up to 16 tonnes per household, while non-glutinous rice will be insured at 10,000 baht ($324.99) up to 30 tonnes per household.

Thailand’s main rice-growing season begins in May, at the start of the rainy season, for harvest between August and October, while jasmine rice is usually grow in August for harvest in December.

The government estimated that the scheme will cover almost four million farmers. It plans to introduce additional measures, including cash handouts to cover the cost of harvesting. These subsidies will be considered by the cabinet next week.

The baht is Asia’s best performing currency so far this year, gaining around 5.5% against dollar.

The country’s rice exporter association lowered its annual export target for 2019 to 9 million tonnes from 9.5 million tonnes after a sharp fall in first-half exports.

Reporting by Panarat Thepgumpanat and Panu Wongcha-um; editing by Richard Pullin

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