Bangkok Post
http://www.bangkokpost.com/News/30Mar2008_news01.php

Rice Prices Soaring
but farmers find little to smile about

Piyaporn Wongruang

Golden stems of rice growing across paddies in the country's rice bowl are supposed to make the field's owners smile with pride. But the smiles have been wiped off the faces of farmers in the central region of Thailand due to fears that thieves might sneak into their fields at night and steal their precious assets. Since the middle of the month, rumours that rice has been stolen around the area spread across the fields in provinces from Lop Buri to Sing Buri and Ang Thong, where farmers like Sunthorn Pumkanklao, Bamrung Rodruedee and Somnuek Meechana have lived and grown rice for more than 20 years. The rumours have yet to be confirmed, but the talk already has farmers living in fear and has prompted them to stay out at night to keep an eye out for anything suspicious near their rice fields. They have to protect their rice crops at all costs.

"I'm so scared now that thieves will steal my rice. If they really do that, it is like they are killing me because everything in my life - my money, my efforts and my hopes - have been put into it," said Mr Somnuek, who grows rice on about 80 rai of land. It is almost fully blossomed now and about to be harvested. Mr Sunthorn said the farmers in his area are not allowed to carry sharp weapons unless they are authorised to by village headmen. As a result, the best they can carry is sticks and mobile phones.

"I'm not really sure that if I really encountered thieves I would be able to press the button. They would not come alone, for sure," he said. He also accompanies his neighbours like Mr Somnuek and Mr Bamrung to take care of their rice crops, which have been left to grow in the fields. A few days ago Mr Somnuek and his wife received a phone call from their daughter in Bangkok, who heard the news about thieves being rampant in the rice fields. She urged her mother to accompany her father at night. As a result, the couple stay awake and stay in the dark in their rice fields together.

The rumours are about as unprecedented as the soaring price of rice in the markets. According to recent records of the Agricultural Economics Office under the Agriculture and Cooperatives Ministry, the local price of the best rice, Hom Dok Mali, rose from about 9,600 baht a tonne in December last year to 10,067 baht in January. The price of raw rice, which farmers usually immediately sell to traders, has also skyrocketed from 6,900 baht in January to between 9,000 and 10,500 baht in several local rice trading areas.

The soaring prices have significant implications for the country as well as for farmers. For more than 20 years Thailand has been the world's number one rice exporter. Thailand has been able to generate income from selling rice abroad of up to 80 billion to 100 billion baht a year, according to the Thai Rice Strategy from 2007 to 2011 report, produced under the supervision of the National Rice Policy Board, by the Rice Department, last year.

Last year, Thailand was able to export 9.20 million tonnes of rice, bringing in income worth about 119 billion baht. Increasing demand and the price of rice in the market therefore contributes further to the country's income, and farmer incomes. The increasing price of rice results from increasing global demand due to a shortage of supplies in some regions, including the Philippines, Vietnam and Bangladesh and new demands from other countries such as Japan.

The increased demand and the price of rice in the market is a golden opportunity that Thai farmers must take advantage of. Mr Sunthorn said he has never seen such a high price for rice before. It is the first time he can also see profits after deducing production costs, he said. At one rice trading spot in Ang Thong, Sali Ngernpan, 68, rides on a rice truck to sell her rice which was harvested from a five-rai farm in Viset Chaichan district. The rice trader gave her 10,350 baht a tonne for her rice. After deducting the weight of the truck, she gets only about 34,000 baht.

"Grandma" Sali looks at the money, smiling. "Money? I will pay back my debts. I owe about 30,000 baht," she said, echoing Mr Sunthorn's remark that being a farmer is not easy. Very few understand the high price farmers pay for living their lives in paddy fields.

Almost all the farmers here in the central provinces have a narrow chance of seeing some profits from their investments. Besides not being able to determine the price of rice in the market, they have to shoulder the heavy production costs. Some farmers even start their seasons with heavy debts. Mr Sunthorn said a lot of farmers do not own land. They have to pay rent, which is likely to rise along with the rising price of rice. As well as rent for the farmland, they have to pay for seeds, fertiliser, pesticide, farm labour and transport to move their rice to the trading areas.

Most farmers believe all these rising costs are due to the soaring price of oil. Their production costs soon pile up and become part of the farmers' debts once the price of rice falls below these costs, or the farmers' rice is destroyed by natural disasters like floods and drought. According to the Thai Farmers Association, farmers now shoulder rice production costs for both rain-fed crops and off-seasonal crops of between 5,000 to 6,000 baht. These are likely to increase. The price of a pack of fertiliser has also risen, from about 500 baht to 1,000 baht at the moment, said Vichian Phuanglamjiak, a co-founder of the association.

The Agricultural Economics Office records show that with such investment costs, farmers will earn a narrow profit margin of about 340 baht per rai for rain-fed crops and 970 baht per rai for off-season crops. Mr Vichian said now farmers cannot earn anything if they cannot produce up to 600 kilogrammes of rice per rai. One rai of farmland will normally yield at best 1,000 kilogrammes of rice in a good year. Mr Vichian said the unstable rice price and high production costs have long been a concern for farmers, but these problems have never been properly addressed or solved by any governments. [1 rai = 1600 sq. meters or 0.395 acre]

He said he is now very worried that if farmers rush to grow rice following the soaring prices, they will later be hard pressed by rice traders and offered low prices for their rice. Some farmers are now rushing to grow a second crop, despite limited water supplies from the Royal Irrigation Department, which has to share water with other sectors.

Bangkok Post : General news
http://www.bangkokpost.com/News/28Mar2008_news01.php

Thailand braces for rice crisis
Soaring exports may cause local shortage


BANGKOK POST and AGENCIES


Thailand, the world's largest rice exporter, could face a shortage of rice after skyrocketing prices have encouraged traders to substantially increase their export volumes, Prasert Kosalwit, the director-general of the Rice Department, said yesterday.

Concerns over shortages could lead to the introduction of measures to control the amount of rice exported in the second half of this year if the price continues to increase. The measures have been floated by Deputy Commerce Minister Wiroon Techapaiboon.

Fears of a shortage come against a backdrop of signs of rice shortages in some countries, including the Philippines and neighbouring Cambodia.

The Cambodian government yesterday appealed for people to remain calm and not to stock up on food commodities after the government banned rice exports on Wednesday.

The Philippines rushed to sign a purchase agreement with Vietnam for 1.5 million tonnes of rice this year to alleviate an expected shortage in coming months. The agreement came one day after the government announced the country was facing a serious rice supply crisis.

India has banned the export of rice to other countries, while China and Vietnam have already reduced export volumes.

''A rice shortage in the local market is very likely,'' warned Mr Prasert.

His comment was supported by rice export volumes which were more than one million tonnes a month from October last year to February this year.

The stockpile under the supervision of the Commerce Ministry is 2.1 million tonnes. That could ease domestic rice shortages for about three months, said Mr Prasert.

In case the rice stocks are used up and the rice shortage gets worse, the Rice Department will encourage farmers to grow a mixed breed paddy with a high average yield per rai of 1,200kg. The growing period for the mixed breed paddy is only 110 days.

Rice Exporters Association president Chookiat Ophaswongse admitted that the rice price and global demand would rise further from the second quarter of this year.

This is because Iran and Indonesia, which are regular customers, have not yet placed their orders for this year, he said. The two countries are expected to do so in the middle of this year.

Iran is likely to order at least one million tonnes and Indonesia more than 1.5 million tonnes. This has prompted rice millers and farmers to hoard rice for future speculation as well, said Mr Chookiat.

But Mr Chookiat said he is confident the government rice stockpile of 2.1 million tonnes would be enough to prevent a rice shortage for three to four months until paddy from the new season is harvested.

He said the main shortage would come from the race to export rice to other countries.

Thailand could face problems only when it exports more than nine million tonnes a year, he said. Over the past five months, the country sold more than one million tonnes a month to other countries. If this export volume continues, a shortage is possible, he added.

Mr Chookiat supported measures to stamp out excessive exports, suggesting that the government prepare to put in place a minimum export price system, which has been in use in India.

''If the rising rice price continues, the measure may be needed in the second half of this year,'' he said.

Under the measure, the government requires exporters to sell rice at determined prices which are higher than the market price to slow exports.

Bangkok Post : General news
http://www.bangkokpost.com/News/17Mar2008_news25.php

Farmers feel pinch from drought

Farmers in the North and Northeast are beginning to feel the pinch from this year's drought, which has already ravaged tens of thousands of rai of farmland.

A looming crisis prompted Deputy Interior Minister Sitthichai Kowsurat to inspect affected areas in Ubon Ratchathani, Si Sa Ket and Amnat Charoen provinces yesterday.

Ubon Ratchathani's deputy provincial governor Pramote Sajjarak told the deputy minister that almost 1,400 villages in the province were facing water shortages and that the water level in rivers and natural water sources was alarmingly low.

However, water levels in the Chi river, a major source of water for the Northeast, was still at a normal level for this time of year, he said.

Mr Sitthichai instructed provincial governors to set up drought-relief centres in every province and make sure that each province's 50-million-baht emergency fund was spent appropriately to help drought-affected people.

Eleven out of 17 districts in Surin have been declared disaster areas. The water crisis has reportedly affected 20,000 households and destroyed crops across over 4,500 rai of farmland, causing around 1.8 million baht in damage.

The province's famous "elephant village" in Tha Tum district has also been badly hit by the drought, raising concerns over the health of animals.

In Uttaradit province four districts have been declared disaster zones where some 30,000 rai of agricultural land has already been damaged.

Apiwat Kunarak, chief of the northern region environmental protection office, said northern residents would not only be hit by water shortages, but also possible forest fires and air pollution.

Widespread forest fires would increase the level of small dust particles in the air that could be harmful to residents.

"It is important that locals avoid slash-and-burn cultivation and other burning activities," he said.

The Meteorological Department, however, predicted that this year's drought will not be as serious as last year.

The dry season is expected to end in the first week of May when farmers and villagers hope the rain will return.