Thailand doubles rubber subsidy in bid to quell protests

ERJ staff report (BC)

Bangkok – Thailand has doubled subsidies to rubber farmers ahead of planned protests later this week, reports Michael Peel of the Financial Times, the latest gambit in an increasingly expensive government effort to sweeten the large population of commodity producers.

The Thai cabinet on 10 September approved the assistance of 21.2bn baht (€497m) to rubber smallholders, after a dispute that has led to shipment delays and to scuffles last week between police and farmers demonstrating in the south.

The government’s decision to raise the rubber subsidy to 2,520 baht (€59.4) per rai – an area equal to about 40m squared – came after some cultivators protested against what they alleged was preferential official treatment of rice farmers in government supporting areas in the north of the country. The additional support would be equal to about 10 baht (€0.24) extra on a kilogramme of rubber with a market value of just over 80 baht (€1.89), although international prices should be unaffected because the government plans to pay farmers according to the size of their holdings rather than how much they produce.

Some rubber producers are reported as saying they were pleased with the deal. Vichai Intawong, president of a southern Thai co-operative of about 300 rubber farmers, said the terms meant “we will get more and don’t have to worry about productivity”, although he raised concerns about possible difficulties in accessing the money.

“It’s quite complicated because many documents are required for registration such as title deed and tax payment for land,” he is quoted as saying. “Most of the rubber farmers in my village have these, but some rubber farmers who own small land may not be able to provide those documents.”

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Full story from Financial Times