Thai traders are flocking to Myanmar to buy up cheap rice with the aim of selling it to a Thai government rice-buying scheme that is supposed to support Thai farmers, according to the Myanmar Rice Merchants Federation.
In 2011, Thai Prime Minister Yingluck Shinawatra revived a rice subsidy program that offers to buy up rice from paddy farmers at 15,000 baht (US $420) per ton, well above the market price. The program was first started to woo Thailand’s rural voters.
"For a long time, Thailand did not buy any rice from Myanmar… But at the beginning of this year, Thai traders started to buy normal rice and broken rice [grains] from Myanmar and transport it across the border," said Ye Min Aung, the federation’s secretary.
The Irrawaddy reports that the federation organized a press conference in Yangon on Wednesday to highlight the increase in the largely unregulated trade in rice.
"This cross border rice trade is related to the Thai government’s rice scheme. Thai farmers will benefit if they buy cheap Myanmar rice and import it into Thailand for this scheme," Mr Aung said. "The Thai government offers a good price for the rice."
On Tuesday (2 July), Thai newspaper The Bangkok Post reported that Thai officials at the Myawaddy-Mae Sot border crossing discovered 25 tons of rice hidden in a cargo truck. The paper said the rice was destined to be sold under the Thai government’s rice pledging scheme.
The scheme has been dogged by allegations of massive corruption and cost billions of dollars in government funds. The scheme also pushed up rice prices in Thailand, causing rice exports to fall. On Tuesday, the Thai government announced it was cutting the minimum rice prices for farmers with 20 percent.
The Myanmar Rice Merchants Federation (MRMF) said it would investigate the cross border rice trade to Thailand, adding that it should be regulated and involve Burmese rice traders. "We need to find out whether a lot of rice is exported across the border to Thailand, officially or unofficially," Mr Aung said.
Official rice exports from Myanmar have almost tripled in the last three years and are poised to reach 1.4 million tons in the current fiscal year, rice experts said in March. Only two years ago rice exports still stood at a mere 537,000 tons.
A fourth of Myanmar’s $45.4 billion GDP comes from the farming sector, according data by the Ministry of Agriculture and Irrigation from 2011, the most recent available figures.
Mr Aung said however, that the surge in the unregulated flow of Myanmar rice to Thailand still remained relatively small compared to the massive, unofficial rice trade on the Myanmar-China border, which is estimated to have a volume of 800,000 tons.
"Myanmar and China don’t have bilateral trade agreement yet [for rice], even though the Myanmar government asks for it every time they meet with China," he said.
"So rice from Myanmar simply flows [unregulated] across the borders. The Chinese authorities could take action against the traders, but they don’t do it because their people demand this rice."