Thai rubber farms block highway

Thai rubber farms block highway
File photo of rubber plantation for illustration purposes.

THAILAND - Hundreds of rubber farmers armed with sticks and bricks are blocking a major highway and railway track in southern Thailand, demanding support from the government as rubber prices fall.

Although riot police are gearing up to disperse them, the farmers are in no mood to relent, and are threatening a nationwide "shutdown" on Sept 3 if their demands are not met.

The ruling Puea Thai party is in a bind, giving generously to rice farmers and now faced with a demand from the increasingly influential rubber-growing lobby.

The crisis has acquired a political colour, too. A deputy leader from the opposition Democrat Party who owns rubber plantations has joined the protest. The party has strong support in the south, where most of Thailand's rubber is grown.

The farmers want guaranteed sheet rubber prices. The government has offered 80 baht (S$3) - near the top of recent world market prices of 70 to 80 baht. That would cost nearly US$1 billion (S$1.28 billion). A third of that amount would subsidise farmers' costs; the rest would go towards machinery for major producers, and to promote farmer cooperatives.

But the farmers say this is not enough to cushion them from price volatility. World prices have fallen about 20 per cent since February, despite efforts by Thailand, Indonesia and Malaysia to reduce exports to push prices up.

Thailand is the world's largest rubber exporter. The material is used to make products from condoms to car tyres. The government already has some 220,000 tonnes of stockpiled rubber bought from its farmers, said Dr Viroj NaRanong, an economist with the Thailand Development Research Institute. But that scheme ended in March, just as world prices were falling.

In Thailand's rural political hierarchy, sugar cane farmers have been the most organised, followed by rice farmers. But the expansion of rubber cultivation, even into "non-traditional" areas like north-eastern Thailand, has made rubber farmers increasingly significant politically, said Dr Viroj.

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