A farmer works his rice field with a mechanical plough in Lat Khum Kaew disrict of Pathum Thani on May 10, 2021. (Photo: Pattarapong Chatpattarasill)
Thailand and Vietnam have reached an accord aimed at raising the price of locally-produced rice in the global market amid soaring costs for farmers, the government said on Saturday.
The agreement secured with Vietnam is the first of its kind, Agriculture and Cooperatives Minister Chalermchai Sri-on said, adding both nations will immediately set up special teams to drive the idea at home.
It was reached during the end of recent talks between the two countries on rice export prices, he said.
Alongkorn Ponlaboot, his adviser, was appointed head of Thailand’s price negotiation team, while the ministry was ordered to hold meetings with farmers’ associations, millers, exporters and other concerned groups, Mr Chalermchai said.
At future meetings, the details of the Thai-Vietnamese rice agreement will be discussed so all parties know what could be done next towards raising the price of exported rice, in line with rising costs, he said.
“The agreement is the first step taken in cooperation between Thailand and Vietnam to help rice farmers gain fairer export prices using the pricing mechanism in the global market,” Mr Chalermchai said.
While rice farmers have widely been affected by the double crisis — the Covid-19 pandemic and Russia-Ukraine war — rice prices in the global market changed only slightly, he said.
Thailand, the third largest rice exporter in the world, and Vietnam, the second largest exporter, will join hands in negotiating for a reasonable rise in rice prices in the global market, he said.
Last year, India exported the highest volume of rice at 19.55 million tonnes, while Vietnam and Thailand exported 6.24 and 6.12 million, respectively, Mr Alongkorn said.
Thailand has set a target to export 7 million tonnes of rice this year, he added.
About 3.99 million tonnes of the product, worth 70.34 billion baht, were exported between January and July, representing a 58.2% rise in quantity when compared with figures over the same period last year, he said.
However, it only yielded an increase of 34.1% in export value, he added.
To implement the agreement, Thailand and Vietnam will next work towards creating a government negotiation mechanism while trying to convince more rice exporting countries to join the initiative, he said.
“[Pushing for fairer prices] is a mission and responsibility of all rice-growing and exporting countries,” Mr Alongkorn said.
“And because climate change is affecting the rice growing and its yields around the world, all sides need to join hands to ensure the world’s food security.”
Rice farmers would no longer cope with unfair rice prices in the global market if they were left alone without help and cooperation, he said.
While the Russia-Ukraine war has driven up rice growing costs, rice prices simply do not proportionately rise, he said.
Currently, the production cost of rice growing in Thailand has almost doubled to between 7,500 baht and 8,000 baht per tonne of rice, from only between 4,500 baht and 5,000 baht per tonne of rice two years ago, said Pramot Charoensin, president of Thai Agriculturist Association.
What the farmers truly need is help from the government to lower production costs and fairer rice prices, he said.
Vietnam is in a better situation than Thailand because labour costs there in the rice growing sector are lower, he said.
Vietnam’s production cost is about US$100 (about 3,600 baht) lower per tonne of rice produced than Thailand’s, he said.
He said he welcomes the Thai-Vietnamese cooperation on rice prices, but cautioned that India still holds the most say in the setting of rice prices in the global market due to its position as the top exporter.
Hence, if Thailand and Vietnam alone begin selling rice at much higher prices, those rice-buying nations may instead turn to India for import supplies, he said.
Rangsan Sabaimuang, president of the Thai Rice Mills Association, also favours fairer prices for all parties but he doubts whether the attempt will ultimately be successful.
“The question is, why were those oil exporting countries able to form the Organization of the Petroleum Exporting Countries?
“I’d like this to be taken as a model,” he said, referring to the formation of a group similar to Opec to regulate rice prices.
Attempts by various parties on the global stage towards fairer agricultural product prices have never succeeded in the past three to four decades, he said.
The Thai-Vietnamese cooperation has therefore become the first step to make this cooperation happen, he said.
“No more competition in the export of rice and agricultural goods,” he said. “Only cooperation will help [rice growers] survive. Food security is a shared responsibility.”