THAILAND: Para rubber expansion moves ahead - Low sapling prices will be maintained

The Office of the Rubber Replanting Aid Fund (ORRAF) is proceeding with plans to grow 800,000 rai (one rai=1,600 sq m) of para rubber after the cabinet gave the green light to the project.

Its board will now consider terms for the bids to select rubber sapling suppliers for the first 200,000 rai this year.

The office will pay suppliers 18 baht a sapling, a rate that approved by the National Rubber Policy Committee.

"We'll stick with that payment even though market prices have increased strongly in recent months driven by the boom in rubber cultivation," said Wit Pratuckchai, director-general of the ORRAF, which failed to convince the committee to pay 35 baht a sapling.

The rubber committee chaired by Deputy Prime Minister Suthep Thaugsuban instructed the agency to stay at 18 baht, reasoning that sapling prices tend to decline in line with less fluctuating global rubber prices.

Ribbed smoked sheet grade 3 (RSS3) rubber was selling in Songkhla for 163 baht a kilogramme last Friday, down from 173 baht/kg before the long Songkran holiday and much lower than the record high of 192 baht on 17 Feb.

The robust rubber trade pushed by strong demand from China's automobile tyre industry has driven the heavy expansion of rubber plantations and driven up sapling prices.

Mr Wit said bids would be accepted from selected suppliers in each region to improve distribution efficiency.

The three-year project is aimed at promoting new rubber sites nationwide. Of the total, 500,000 rai will be planted in the Northeast, 150,000 in the North and 150,000 combined in the central plains, Eastern Seaboard and the South.

The programme has drawn tremendous interest from planters, with 219,000 applications.

However, only 160,000 planters will be needed for the entire three years and only 13,000 for the first batch of 200,000 rai.

"We'll finish selecting the planters next month. The ones meeting the criteria will be taken on a first-come, first-served basis," said Mr Wit.

The cabinet has instructed the ORRAF to proceed with the first 200,000 rai, while the remaining rai will have to seek approval from the new government.

The move came after the National Anti-Corruption Commission (NACC) asked the government to delay the project, citing the controversy over a case involving 1.4 billion baht worth of rubber saplings in 2003.

The NACC also questioned the saplings' quality, as many of the ones from the previous programme did not grow well and even died.

However, Mr Wit pointed out that the previous programme had been run by the Agriculture Department and not the ORRAF. He said his agency had more stringent measures in place including tighter bidding methods to ensure sapling quality.

"We're considering an electronic auction to increase our chances of getting good suppliers," said Mr Wit.

He said to ease concerns about growing rubber in reserve forests, planters must bear title documents to show they really own the land, and the site must be in the promoted areas.

Eligible planters must never have owned a rubber plantation before, as the programme is aimed at helping to generate income for new planters.(Syed Rashid Ali, Karachi, Pakistan)