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Thai rice scheme puts PM in bind

BANGKOK -- Thailand's government is under growing pressure to cut its guaranteed price for rice which is causing a slump in exports. Even some farmers accept that a cut might be needed, but it may be politically difficult to bring about change.

The government is paying farmers 15,000 baht (US$490) per ton for their rice and, since exporters are unable to find buyers at that level, it has ended up with about 12 million ton in state stockpiles, more than it exports in a good year.

Academics and analysts say a price of 10,000 to 12,000 baht may be more realistic and sustainable, but Prime Minister Yingluck Shinawatra and her Puea Thai party rode to electoral success on the back of the policy, securing the votes of agricultural workers who make up 40 percent of the workforce.

Adis Israngkura Na Ayudhaya, dean of the School of Development and Economics at the National Institute of Development Administration, says the scheme was always politically rather than economically motivated.

“The government is using taxpayers' money to buy votes. It's not the welfare of the farmers they care about. It's something they promised the public, an electoral thing, so at the next election they can say to people they kept their word,” he said.

Yingluck is the sister of Thaksin Shinawatra, a former telecoms tycoon who pioneered similar populist policies when he was prime minister, before being ousted by the military in 2006.

Thaksin remains hugely popular among rural people in the north and northeast and the urban poor, and is widely believed to be eyeing a return from self-imposed exile.

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In this Nov. 21, 2009 photo, Thai farmers tend to their rice in a paddy in Yala province. Thailand's government is under growing pressure to cut its guaranteed price for rice which is so high exports have slumped, and even some farmers accept a cut might be needed, but it may find it politically hard to back down. (AFP)



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