BANGKOK, Nov 20 (Reuters) – Thailand approved a new subsidy and other measures on Tuesday to help its rubber farmers, who are struggling amid a slump in prices and have threatened protests.
The world’s biggest rubber producer has been hit by a 40 percent decline in prices over the past two years, accentuated again recently as a trade war between the United States and China hurt Chinese demand for Thai rubber.
The government approved the package of measures, worth 18.6 billion baht ($567 million), at a cabinet meeting, but drew criticism from the rubber farmers’ association which said the measures would only help about 1 in 10 farmers.
Rubber farmers are a powerful force in Thailand and the government wants to avoid a repeat of protests seen in 2013.
The measures will take effect in January and include a direct subsidy of 1,100 baht ($33) per rai of land (0.16 hectare), capped at 16,500 baht, for small rubber farmers who are registered with the Rubber Authority of Thailand.
Rubber tappers who work on registered farms but do not own the land will get a handout of 700 baht ($21) per rai of land, capped at 10,500 baht.
“We estimate that this measure will benefit about one million farmers and 300,000 rubber tappers,” Luck Wajananawat, deputy minister of agriculture and cooperatives, told reporters.
Farmers already receive some government subsidies.
Last year Thailand produced 4.5 million tonnes of rubber from 20.32 million rai of land and exported 85 percent of the overall production.
Thai benchmark RSS3 rubber grade <RUB-RSS3C-BKK> was quoted at $1.35 per kilogramme, free-on-board Bangkok, on Tuesday.
Rubber farmers, who have been threatening to stage a protest in recent weeks, say the new measures are too limited and will not help those who are not registered with the authority.
“This will only help about 10 percent of farmers,” Manat Boonphat, the president of Small Rubber Tapper and Farmer Association of Thailand told Reuters.
Manat said the government would be better off buying rubber from farmers at a price above the market rate.
Prime Minister Prayut Chan-ocha has appealed to farmers not to stage a protest by promising to help them.
In 2013, hundreds of rubber farmers staged protests around the country, blocking roads and a regional airport in the south. They were part of much larger demonstrations in Thailand which eventually turned into a bigger political movement that paved the way for the 2014 military coup.
Prayut said on Tuesday that farmers need to adjust to the changing global economy, and said the government would press ahead with plans to reduce the country’s rubber-growing areas and increase domestic consumption of rubber to help reduce price fluctuations in the long term.
($1 = 32.9400 baht)
(Reporting by Pracha Harirakspitak, Aukkarapon Niyomyat, Panarat Thepgumpanat and Panu Wongcha-um Editing by Susan Fenton)
