Floods put early dampener on rice mortgage scheme

Washed-out crops, shrinking profit margins prompt rethink of farming methods 

`I have to go home now — the floodwater has entered my house,'' said Preecha Rattanakanok, a farmer in Ayutthaya.

The nationwide flooding has affected 59 provinces but hit Ayutthaya especially hard, turning all 16 districts into disaster zones after the torrents burst flood walls and sent water gushing into homes a few days ago.
The floods are an extra headache for rice farmers in the province who have struggled to make a living from their crops.
Farmers like Mr Preecha were looking forward to reaping some benefit from the rice mortgage scheme recently introduced by the Pheu Thai government, but for now that is a moot point as his entire 40 rai of paddy fields are submerged.
Past governments have tended to offer policies supporting farmers, but Mr Preecha finds there are no guarantees.
Certain investment, sale and production problems are inherent, and natural uncertainties like floods only make things worse.
Mr Preecha, 56, owns 20 rai of farmland and rents another 20 rai. The combined 40 rai, sitting on the best irrigation system in the country, has the potential to yield almost 40 tonnes of rice per year.
But Mr Preecha has found it a difficult target to hit, with prices often falling short of expectations.
In the 2008-2009 fiscal year, the then-Democrat government offered rice mortgage prices of up to 12,000 baht per tonne. Mr Preecha harvested 35 tonnes of rice that year, which he expected would bring in 420,000 baht.
However, Mr Preecha's rice carried almost 30% moisture, almost double the acceptable rate of 15%.
As a result, 1,500 baht was deducted from the price of Mr Preecha's rice, reducing it to about 10,500 baht per tonne.
This year, Mr Preecha said, it would be no different. The offered mortgaged rice prices would fall for overly moist rice.
That is assuming the farmers will even have rice to sell — as it is, many rice farmers in Ayutthaya and some other flooded provinces stand to lose most or all of their current crops.
The mortgaged rice prices offered have also put pressure on farmers who rent land. With competition for rice-growing land increasing, some landowners are seeking to take their land back to grow rice themselves.
This has pushed up rental rates, increasing the level of investment in the business. In some areas, the rental rate has risen to 2,000 baht per rai, more than half of the per-rai rice returns, which are generally about 3,500 to 4,000 baht.
This narrowing profit margin means many rice farmers have to work harder than ever to make a decent living. There are now three harvests a year in some Central Plains farms. As a result, the land hardly rests, which is necessary to allow organisms and nutrients to regenerate the land. Without quality land, the harvests tend to offer low yields.
Chalor Thaiprokob, a farm leader in Bang Sa-ai district, said it is time to review the country's rice production methods. This task was urgent, as Thailand will become part of the Asean economic community in the next few years. ``We cannot rest, the way we have been doing things,'' he said.