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Rice Mountain Assessment of the Thai rice pledging program

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  • Permani, Risti
  • Vanzetti, David

Abstract

In 2011 the Thai Government pledged to pay rice producers 50 per cent more than the going market price. The surplus has gone into Government stocks. While supporting local farmers, the Government also hoped to drive up world prices by withholding supplies from the world market and make a speculative profit by selling the stocks at a higher price. It is now clear that the policy has in fact depressed world prices and the Government has a mountain of rice to dispose of. Furthermore, the stocks are starting to spoil, and there has been an upsurge in smuggling to take advantage of inflated prices. Competing exporters have increased supplies to the international market. This study analyses the welfare effects of various Thai rice policy options using a dynamic, stochastic, ten-region, partial equilibrium model of world rice trade. While the Thai policy was effective in supporting the incomes of rice producers in the short run, the burden imposed on taxpayers and consumers seems difficult to justify.

Suggested Citation

  • Permani, Risti & Vanzetti, David, 2014. "Rice Mountain Assessment of the Thai rice pledging program," 2014 Conference (58th), February 4-7, 2014, Port Maquarie, Australia 165881, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare14:165881
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    References listed on IDEAS

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    1. Beghin, John C., 2006. "Evolving dairy markets in Asia: Recent findings and implications," Food Policy, Elsevier, vol. 31(3), pages 195-200, June.
    2. Chung Ming Wong, 1978. "A Model for Evaluating the Effects of Thai Government Taxation of Rice Exports on Trade and Welfare," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(1), pages 65-73.
    3. Shoichi Ito & E. Wesley F. Peterson & Warren R. Grant, 1989. "Rice in Asia: Is It Becoming an Inferior Good?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(1), pages 32-42.
    4. Prithviraj Lakkakula & Bruce L. Dixon & Michael R. Thomsen & Eric J. Wailes & Diana M. Danforth, 2015. "Global rice trade competitiveness: a shift-share analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 46(5), pages 667-676, September.
    5. Siamwalla, Ammar, 1975. "A History of Rice Policies in Thailand," Food Research Institute Studies, Stanford University, Food Research Institute, issue 03.
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