A first-year $19 billion rice price support scheme has left Thailand's government with 18 million tonnes of stockpiled rice, and a smuggling problem that they are trying the head off during the second year of the price support scheme to rice farmers.

Seven million tonnes of paddy rice will be accepted by the Thailand government under the rice pledging scheme in the current harvest season ending September 15, according to the country’s deputy commerce minister Yanyong Phuangrach and reported in newspapers of the country.

He recently said that tighter rice purchase measures have minimized malfeasance in the subsidy scheme, especially the smuggling of rice from neighboring countries to be sold to the government under Thai farmers’ names.

The rice subsidy program of paying rice farmers above market prices has cost the country its place as the world's top rice exporter, and left the government grappling to pay for this year’s harvest. The announcement of the subsidy in buying 7 million tonnes of rice did not include the price that will be paid the farmers. The government has attempted to reduce the price, which has met with protests from rice farmers who voted in the ruling government on the higher subsidy price guarantee.

In what appears to be an attempt to diversify the agricultural economy of Thailand and reduce the country’s production of rice. The Agriculture and Cooperatives Ministry has announced that 300,000 rai (one acre equals about 2 ½ rai) of rice farms in Buriram northeastern province should be turned into sugarcane plantations, according to the National News Bureau of Thailand.

The country appears to be trying to force implementation of an agricultural zoning policy for crop production by region of the country. Agriculture Minister Yukol Limlamthong reportedly said around 3 million rai of land in the province is being used for rice growing. However, official surveys show that 300,000 rai of the areas should be more suitable for sugarcane due to soil and weather conditions.

“The minister suggested that in the first year of agricultural zoning, 60,000 rai of land should be turned to sugarcane cultivation, adding that he would ask sugar refineries to increase their production capacity in order to absorb the increasing supply of sugarcane. The minister believed that the crop zoning policy will reduce agriculture-related problems,” the news bureau announced.  

“Agricultural zoning is the government’s idea to help farmers cope with the changing weather, high production cost, low prices of agricultural products, and unreliable produce. The government is now trying to promote this idea throughout the country.”