Sugarcane prices to be set via mutual agreements
Bangkok Post, 7 May, 2004
System would replace net revenue sharing
Yuthana Praiwan
Sugarcane prices will soon be set through mutual agreements between planters and millers, or unilaterally by millers under new regulations initiated by Industry Minister Pinit Charusombat. The new system would replace the existing one that requires net revenue sharing between sugarcane millers and planters.
Mr. Pinit said earlier that he favored scrapping the system that has been utilized for more than two decades because t required government subsidies to help planters cover their production costs.
Nattapol Natasomboon, the deputy director-general of the Cane and Sugar Office, said that under the new scheme, millers would hire planters to grow a predetermined quantity of sugarcane.
Millers would then pay planters for heir crop at an earlier agreed price and ill plantation expenses would be borne by the millers.
Alternatively, a planter could grow a et amount of sugarcane according to the miller's requirements but leave price negotiations until after the harvest.
Under the new plan, millers will be able to help planters control production costs and increase yield per -rai.
Under the existing system, planters are allowed to grow as much cane as they wish which has often resulted in a post- harvest rush to sell and has led to low yields per rai for sugarcane and educed sugar production due to uncontrolled crop quality.
Mr. Nattapol said it was essential to improve crop production to increase yields per rai and quality in order to increase the output and quality of sugar.
He noted that the revenue-sharing system was good in some ways but failed to encourage planters to improve their crop quality.
Mr. Pinit has directed officials involved in the sector to look for ways to introduce new regulations that could bring the new system into operation without having the need for amending the existing sugar law, which would be very time consuming.
Prapat Jenlapwattanakul, deputy chair man of Mitr Kaset Industry Co, said millers would be pleased if the revenue sharing system was restructured, as it would help control costs and crop prices.
Under the existing system, he said, crop prices were distorted as millers were forced to pay more for crops in certain areas.
But Rachai Choosilpkul, a leading planter, said that changing the system would be inappropriate because it would bring the sugar industry back to the era before revenue sharing, when millers and planters had a difficult time agreeing on crop prices and as a result, protests and rallies by planters were frequent.
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