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Thailand has tightened up on border trade to stop smugglers bringing in grain to take advantage of the subsidised prices paid by the government to help local farmers, officials said on Friday. "It will be a co-ordinated effort by the navy, the army and also our administrative officials in a bid to prevent profiteering as the government is spending a lot of money on intervention programmes," said Governor Khanpet Chuangrungsi of Trat province, neighbouring Cambodia.
Tonnes of rice, corn and tapioca have been intercepted coming in from neighbouring countries, as profiteers sought to pass their goods off as Thai farm products to benefit from relatively high intervention prices, traders said. "The government poured a lot of money into farm subsidies to support farmers.
We need to make sure that our farmers access that help, not the others," said an official in Sa Kaeo, another province neighbouring Cambodia around 270 km (170 miles) from Bangkok. This week Thai soldiers seized 300 tonnes of paddy rice smuggled in from Cambodia, said an official at the Sa Kaeo customs office, asking not to be named.
In February 35 tonnes of corn and 300 tonnes of rice paddy were seized in Tak province, 425 km (265 miles) north-west of Bangkok, as smugglers tried to bring it in from Myanmar, he said. Since January the government has set up or renewed several farm intervention programmes, trying to prop up commodity prices by buying grain at above-market prices in a bid to placate farmers and nip protest movements in the bud.
But that has widened the gap between prices in Thailand and neighbouring countries, leading middlemen to smuggle in more grain to be sold on the Thai market, adding to swollen government stockpiles, traders said. The government set a new rice intervention scheme in March, paying farmers 11,800 baht ($334) per tonne of paddy, higher than market prices in Thailand of around 9,000 baht and well above Cambodian prices of around 7,000 baht, they said.
Thailand was estimated to have 4 million tonnes of milled rice, up from 2.5 million tonnes in mid-2008, said an official at the Ministry of Commerce. It was a similar picture with corn. It held no stocks at all at the end of 2007 and saw no need for an intervention programme at first in 2008 as prices surged because of biofuel demand from the United States in particular.
After prices fell in the middle of last year, it ran a corn subsidy programme from August to December 2008 and now it has around 900,000 tonnes of the grain in stock. Now the government is to extend the programme, aiming to buy up to 1.5 million tonnes this year rather than the 500,000 tonnes announced earlier as farmers have staged sporadic protests about low prices, demanding that the government buy more.

Copyright Reuters, 2009

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