Fertiliser Subsidy and Price Increase Approved
10 May 2011
THAILAND - The Thailand government will spend 3.5 billion baht to subsidise fertiliser prices for farmers while at the same time approving increases in fertiliser prices.
The subsidised fertiliser will be available to growers of rice, maize and tapioca who are participating in the government's crop price insurance programme. Farmers will receive a direct subsidy of 1,500 baht a tonne, proposed by Deputy Prime Minister Trairong Suwankhiri.
Prime Minister Abhisit Vejjajiva, who chaired a meeting yesterday on the issue, preferred the direct subsidy to Finance Ministry proposal to set aside 30 billion baht for low-interest loans for farmers to buy fertilisers.
The government estimated total fertiliser usage of 2.3 million tonnes over the next three to four months, comprising 1.8 million tonnes for rice and 500,000 tonnes for maize and tapioca.
The plan is aimed to cover 70 million rai of first-crop paddy cultivation and 20 million rai of maize and tapioca.
Some 3.7 million rice-farming households are registered in the price insurance scheme, along with 538,000 households for tapioca and 461,000 for maize.
Farmers are required to register with Bank for Agriculture and Agricultural Co-operatives later this month to join the programme and obtain documents to show fertiliser vendors. The bank will suggest appropriate fertiliser formulas for each farm type.
The government will also allow fertiliser companies to increase prices under the supervision of Internal Trade Department. Commerce Minister Porntiva Nakasai said the new prices would be fixed for three months as the government already put in place the subsidy.
However, price approval will be based on the actual costs of each company instead of the 30 per cent average increase announced earlier to ensure fairness.
Finance Minister Korn Chatikavanij said farmers could buy fertilisers by using cash or they could borrow from from BAAC at 7 per cent annual interest.
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