The government has bowed to a proposal by rice farmers, agreeing to maintain the pledging price at 15,000 baht per tonne for the main crop and 13,000 baht per tonne for the second crop in the 2013-14 season.
Commerce Minister Niwatthamrong Bunsongphaisan said the National Rice Policy Committee has settled on the prices for the next season which will help cap the budget at 270 billion baht.
For the main crop, the government will buy paddy with no more than 15% moisture content at 15,000 baht a tonne, up to a maximum of 350,000 baht per household.
The government will buy jasmine paddy rice with no more than 15% moisture content for 20,000 baht per tonne, he said.
For the second crop, the government will buy paddy with no more than 15% moisture content for 13,000 baht per tonne up to a maximum of 300,000 baht per household.
He said the new prices will ensure the government spends less than in previous years. The losses would come to 80 billion to 100 billion baht.
Mr Niwatthamrong said the prices are based on the average in the global market of 11,000 baht per tonne and he believes the farmers will be happy with the terms.
The new programme expects to purchase 18 million tonnes of paddy, he said.
The Commerce Ministry will propose the new prices to the cabinet today and the pledging can proceed on Oct 1.
Thai Farmers Association president Wichian Phuanglamchiak said the farmers are not happy with the 300,000 baht per household limit and want the government to maintain the maximum at 500,000 baht per household.
He said the government's excuse that it has insufficient money is feeble.
"We are discussing the matter with our members in 30 provinces. So far they are not happy," he said.
Earlier in the day, Mr Wichian said the farmers do not want any changes to the current policy but if the government insists, they want it to consider a proposal of their own.
According to one farmers' proposal, the government should buy paddy, regardless of moisture content, at 12,000 baht per tonne up to a maximum of 400,000 baht per household, and that the farmers should be allowed to participate in the programme twice a year.
The current pledging price is 15,000 baht a tonne, with a cap of 500,000 baht per household.
Rice Farmer Association president Prasit Boonchuey, however, said the government's proposal is acceptable even though the purchase is limited at 350,000 baht per household for the first crop.
He said the government is sending signals to rice farmers to prepare for changes, such as the need to reduce rice production, and cut costs.
If the farmers do not make changes, they will be unable to compete when the Asean Economic Community is launched, he said, and urged the government to invest more in research and development.