Rubber Farmers in Southern Thailand Demand Direct Subsidies

Pimuk Rakkanam
160113-TH-rubber-620 A worker carries a sawed-off section of rubber tree for delivery to a processing plant in Thailand’s Surat Thani province, Nov. 30, 2014.

An association of southern Thai rubber farmers says it wants the government to subsidize them directly to offset low prices instead of buying large quantities of their product, as the prime minister announced this week.

The Rubber and Palm Oil Farmers’ Network has asked the governor of Surat Thani province to relay a letter to Prime Minister Prayuth Chan-o-cha calling on the government  to scrap the plan for purchasing rubber from them, Dendech  Dechduang, the group’s secretary-general, told BenarNews on Wednesday.

“The government should sanction the market to boost the latex price to 55 baht (U.S. $1.51) per kilo and that of cup-slump rubber to 30-32 baht (U.S. 82-88 cents) per kilo,” Dendech said by phone.

“Then the prices at of all kinds of rubber to be purchased by central rubber markets will be higher,” he added.

On Tuesday, Prayuth said the government would buy 100,000 tons of rubber from farmers struggling with plummeting rubber prices in Thailand – the world’s top exporter of natural rubber. The sector employs 2 million people nationwide.

But the PM did not tell reporters in Bangkok which price the government intended to set for the purchase, but that it would pay farmers a higher rate than the market price.

“You asked me to fix the price, how much money do I have? How much budget do we have? We will buy rubber to help them make do before the farming [season] pauses for three months,” Prayuth told a news conference in the Thai capital.

“The government bodies will consider the prices on rubber sheets and rubber latex that they can purchase for further production,” he added.

“You must understand that, if the government increases the prices aimlessly, there will be an over stockpile and the situation repeat itself,” Prayuth said, referring to a stockpile of 360,000 tons of rubber being kept in government warehouses.

On Wednesday, Prayuth announced that he had appointed a retired general, former Army Chief of Staff Chatchalerm Chalermsuk, as president of the Rubber Authority of Thailand to oversee the government’s response to the price crisis, the Associated Press reported.

The price, pushed down by declining international demand for Thai natural rubber and a large domestic stockpile of unsold rubber, among other factors, has hit a seven-year low on the market.

As of Wednesday, latex rubber and ribbed rubber were selling for 33 baht (U.S. 90 cents) and 35.19 baht (U.S. 96 cents) per kilo (2.2 pounds), respectively, at the market in Hat Yai, Songkhla province – a southern hub for rubber production.

‘Don’t make us sweat again’

Meanwhile, farmers who called off protests that were expected in 17 provinces on Tuesday after the government announced its new plan to help them out, demanded that they get between 55 and 60 baht ($1.51 and $1.65 ) per kilo in the buy-back scheme.

The Networks of Southern Rubber Farmers and its counterparts in the country’s three other rubber-producing regions met in Trang province on Tuesday, and demanded that the government guarantee farmers a minimum price of 60 baht ($1.65) a kilo.

The networks gave the government one month to agree to this, saying they might plan future protests if officials failed to meet their demand.

“It is a long enough time for the government to boost rubber prices to return happiness to the people. And we believe we can do it if everyone joined together,” Sunthorn Rakthong, a network member told a news conference that was aired Tuesday on TNN, a Thai TV station.

“Don’t make us sweat again,” he said.

Boosting domestic demand

Under the program outlined by Prayuth on Tuesday, eight ministries would purchase 100,000 tons of natural rubber and use it for projects such as road construction, the manufacturing of medical gloves, pillows and mattresses, among other things.

The goal, Prayuth said, was to build up domestic demand for rubber and wean Thailand’s rubber industry off its reliance on foreign markets.

“When we buy [from the farmers] we will not push the [rubber] on to the market, but we will process it into products. There are hundreds of R&D projects for processing rubber, but they have never been practiced,” Prayuth told reporters.


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