Thailand: Prayut orders ministries to buy rubber

Move to help farmers is a U-turn on junta’s vow to end costly agricultural subsidies

BANGKOK • Thailand’s junta chief has ordered eight ministries to buy rubber to help struggling farmers, reneging on a vow to end the country’s long history of costly agricultural subsidies.

Thailand: Prayut orders ministries to buy rubber — An employee with a smoked rubber sheet at a factory in Thailand’s Rayong province. Rubber farmers, who are a key support group of the military regime, have sought the government’s assistance after the collapse of rubber prices. The product now fetches around $1.20 a kilogram, nearly half of what it was going for last year.PHOTO: BLOOMBERG

The kingdom’s rubber farmers largely hail from the southern provinces and were a key part of the anti-government protest movement which cheered a May 2014 coup that brought the military to power.

Global rubber prices have since collapsed and the Thai product currently fetches around 29 baht (S$1.15) a kilogram, nearly half what it was going for last year.

Farmers are calling on the junta to buy up rubber at 60 baht a kilogram, something junta leader Prayut Chan-o-cha has so far resisted.

“We call for rubber prices at 60 baht per kilogram. If the government can’t do that, we are ready for a big protest,” the group of rubber farmer networks said in a statement on Sunday.

The government should move quickly to strengthen domestic rubber prices, the statement said, suggesting that it terminate a plan to sell rubber stocks of 360,000 tonnes and task the Rubber Authority of Thailand to overhaul the industry.

The army toppled the democratically elected administration of Yingluck Shinawatra, in part railing against her family for courting votes among rice farmers in the north and north-east with heavy subsidies.

Mr Prayut’s military regime has launched a criminal prosecution against Ms Yingluck over one such costly rice scheme – which paid nearly twice the market rate for the crop.

Ms Yingluck’s trial for malfeasance linked to the scheme begins on Friday and could see her jailed for up to 10 years.

Yet, faced with the growing angst of rubber farmers, Mr Prayut has ordered key ministries to dip into their budgets to address the “big problem” of falling prices.

“Ministries will see how to spend their budgets” on rubber, he told reporters yesterday, adding that each had been tasked with submitting their plans by the end of the day.

It was not immediately clear how much the efforts to prop up the industry will cost.

In recent weeks, rubber farmers have threatened to launch a wave of protests, in defiance of a military ban on public demonstrations.

Protests would either prod a crackdown from the junta on a key support group or leave the military government exposed to accusations of favouritism.

“Rubber farmers are bleeding. The quick way to help them is to stop the bleeding,” said Mr Somprat Wutthichan, a spokesman for one of the main southern rubber farmer groups threatening to protest.

Mr Prayut has called on farmers across Thailand to diversify their crops and has warned they can no longer rely on government bailouts when global prices fall.

After years of impressive growth, Thailand’s economy is faltering, mired in high household debt, stuttering exports and low consumer confidence. The junta has so far struggled to deliver on its promise to kick-start the country’s lacklustre growth.

Earlier this month, the World Bank forecast that Thailand’s gross domestic product growth rate would slip from 2.5 per cent last year to just 2 per cent this year – by far the gloomiest regional prediction.