By Patpicha Tanakasempipat
BANGKOK (Reuters) - Thailand, the world's second-biggest rice exporter, on Friday announced measures worth around $285 million to help farmers in the country who have been hit hard by a severe drought and low prices for their crop.
The Southeast Asian nation is facing what some experts say is its worst drought in decades. While this has crimped rice output, it has not buoyed prices given huge stocks of about 12 million tonnes that Thailand is trying to offload, the legacy of a subsidy scheme undertaken by the previous government.
Weak demand from top rice consumer China as the country's economic growth slows has further dragged on prices of the grain, plunging many Thai farmers into debt and forcing them to seek help from their military government.
The measures announced on Friday by the country's rice management committee are worth around 10 billion baht ($285 million) and include plans to assist farmers in rice production.
The committee said in a statement that 6.76 billion baht of the total would go toward stabilizing rice prices through soft loans for farmers who store paddy.
Thai rice prices have plunged almost 40 percent over the past three years, gaining only 8 percent so far in 2016 to around $377.50 a tonne, free on board.
The government-owned Bank for Agriculture and Agricultural Cooperatives will approve loans of up to 300,000 baht ($8,415) to farmers who store rice to curb supply.
Prime Minister Prayuth Chan-ocha has also asked farmers to grow less rice to help manage water reserves across the country that have dipped below 2015 levels.
The rice management committee expects domestic and global demand for Thai paddy this year to come in at 25 million tonnes.
It pegged output at 27.17 million tonnes for 2016, versus an average of about 30 million tonnes of paddy in recent years.
In January, Thailand exported over 1 million tonnes of rice worth more than 15.5 billion baht, commerce ministry permanent secretary Chutima Bunyapraphasara said in a news conference.
The ministry will hold more rice auctions between March and July this year, she said, before off-season rice enters the market in August.
Each auction would be for around 400,000-500,000 tonnes. The commerce ministry aims to offload more than 5 million tonnes from the government's stockpiles this year, she added.
(Additional reporting by Panarat Thepgumpanat; Editing by Amy Sawitta Lefevre and Himani Sarkar)