The government on Friday approved state measures to tackle low rubber prices, including a new loan package worth 20 billion baht for entrepreneurs who agree to purchase and stockpile rubber.
According to Grisada Boonrach, the agriculture and cooperatives minister, the measures were endorsed yesterday by the Natural Rubber Policy Committee chaired by Prime Minister Prayut Chan-o-cha.
Under the new loan package, the government will subsidise a 3% interest rate for loans taken out by entrepreneurs who agree to purchase rubber and keep in their stockpiles.
The government expects to use about 600 million baht on interest rate subsidies.
Mr Grisada said the loan package will prompt entrepreneurs to buy 100,000 tonnes of dry rubber sheet, representing 80% of the dried rubber sheet now in the market.
According to Mr Grisada, the committee also approved state agencies buying more natural rubber to use for construction of roads and sports fields.
He said many state agencies still have budget left for building roads and sport fields, so they will be asked to buy more latex from farmers to be used for construction.
The government expected state enterprises to buy a total 180,000 tonnes of latex from farmers, rising from 70,000-80,000 tonnes a year in an earlier plan. Combined spending is estimated at 12.7 billion baht.
Gen Prayut earlier instructed nine state agencies to speed up the use of rubber in a bid to lift domestic demand and shore up falling rubber prices.
The nine organisations are the Agriculture Ministry, Defence Ministry, Transport Ministry, Education Ministry, Natural Resources and Environment Ministry, Public Health Ministry, Interior Ministry, Tourism and Sports Ministry and Bangkok Metropolitan Administration.
Gen Prayut told the agencies to get their budget out before the fiscal year was over because he wanted the agencies\’ plans for rubber use to begin immediately and be completed by the end of fiscal 2018.
The plans were devised to help relieve the rubber glut, which is partly to blame for free-falling rubber prices.