Thailand, struggling to find storage for a rice-buying scheme that cost the country its crown as the world’s biggest exporter of the grain, will rent private warehouses to store next month’s harvest, government officials say.
February’s harvest will add five million to seven million tonnes to stocks on top of the 20 million tonnes of milled rice the government has bought in an intervention scheme kicked off in October 2011 aimed at helping farmers by paying prices above the market rate.
The government will rent an additional 180 warehouses over the next few weeks to accommodate the grain, a Commerce Ministry official said. There are already 60 warehouses across the country storing the grain it has bought so far.
Despite the costs of the rice- buying policy, the government says the program is needed to help poor farmers, who form the majority of the population.
The government has said it expects losses from the rice intervention scheme to amount to about 80 billion baht, or $2.6 billion, by last September, equivalent to about a fifth of Thailand’s projected budget deficit in the last fiscal year.