October 06, 2014

06/10/2014: Thailand to cut production of rice and rubber to avoid oversupply

Thailand plans to reduce production of rice and rubber in order to contain likelihood of oversupply of the country's major farm goods in domestic and world markets, reports Global Post.
Rice and rubber

Prime Minister Gen. Prayuth Chan-ocha confirmed on Monday that the government will take steps to cut the production of rice and rubber nationwide so that volumes of supply will not exceed those of demand from domestic and export markets.

All rice farms and rubber plantations in all parts of the country will be rearranged on zoning purposes in a three-year time beginning from next year in order to avoid oversupply of the farm products which has been the case troubling governments since the past decades, said General Prayuth.

According to Apichart Pongsri-adulchai, assistant to the agriculture minister, Thailand currently has 1.9 million families growing rice in a maximum of six acres each, compared to 660,000 other families who have more than six acres each, and currently an estimated 600,000 families occupy a maximum of four acres of rubber plantation each.

General Prayuth said rice farmers and rubber planters who will be put in the zoning for having six acres of rice farm and four acres of rubber plantation or less will be directly affected by the production cutting scheme.

Given an oversupply of rice and rubber, prices in both domestic and export markets will almost certainly go down while the demand remain unchanged, according to the premier.
General Prayuth earlier moaned over the abundant, uncontroled production of rubber in all regions of the country which, he said, had merely pushed down the prices and curtailed Thailand's bargaining power in the world markets.

"Given such oversupply (of rubber), we might probably have to export our rubber to Mars some day," the sarcastic army general earlier commented.

However, the government will give those rice farmers and rubber planters some funds with which they might turn to do other farm products such as sugarcane, tapioca and maize, he added.

The planned cut in the production of rice and rubber is calculated to cost the government an estimated US$3.3 billion per year.

Read more HERE.

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