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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.
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Suggested Citation

  • Permani, Risti & Vanzetti, David, 2014. "Rice mountain Assessment of the Thai rice pledging program," 2014 Conference (58th), February 4-7, 2014, Port Macquarie, Australia 165882, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare14:165882
    DOI: 10.22004/ag.econ.165882
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    Cited by:

    1. Nuntana Udomkit & Pornthip Yungvisessuk & Claus Schreier, 2021. "Effects of Paddy Price Intervention on the Rice Mill Business: A Case Study of the Paddy Pledging Programme in Thailand," Global Business Review, International Management Institute, vol. 22(6), pages 1362-1374, December.
    2. Song, Xiaoqing & Wang, Xiong & Li, Xinyi & Zhang, Weina & Scheffran, Jürgen, 2021. "Policy-oriented versus market-induced: Factors influencing crop diversity across China," Ecological Economics, Elsevier, vol. 190(C).
    3. Mohammad Hasan Mobarok & Wyatt Thompson & Theodoros Skevas, 2021. "COVID-19 and Policy Impacts on the Bangladesh Rice Market and Food Security," Sustainability, MDPI, vol. 13(11), pages 1-18, May.
    4. Kaittisak Kumse & Nobuhiro Suzuki & Takeshi Sato, 2020. "Does oligopsony power matter in price support policy design? Empirical evidence from the Thai Jasmine rice market," Agricultural Economics, International Association of Agricultural Economists, vol. 51(3), pages 373-385, May.
    5. Hoang, Hoa T.K. & Thompson, Wyatt & Kwon, Sanguk, 2021. "Low-Income Household Food Consumption Consequences of Rice Policy and Pandemic Impacts on Income and Price in Thailand," Journal of Food Distribution Research, Food Distribution Research Society, vol. 52(2), July.

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