(Updates with comments in second, sixth paragraphs.)
Feb. 6 (Bloomberg) -- Record reserves of rice accumulated by the Thai government under a state-buying program should be sold off to raise funds to make delayed payments to farmers, leaders from growers’ groups said as they stepped up protests.
The government must sell from the stockpile, said Ravee Rungruang, leader of a group from Ratchaburi province who took about 600 farmers to the Ministry of Commerce on the outskirts of Bangkok to put forward their demand. Some 3,000 farmers had gathered at the site and blocked a road, according to Prasit Booncheuy, president of the Thai Rice Farmers Association.
The demand from the growers represents a further challenge for Prime Minister Yingluck Shinawatra, who’s faced months of anti-government protests in Southeast Asia’s second-largest economy. The rice-buying program has been undermined as payments to growers haven’t been made and China canceled a deal to buy more than 1 million tons. Selling the grain may take five years and would hurt prices, the Thai Rice Exporters Association said.
“We’re coming to get our money back,” Ravee said by phone today on his way to the ministry, which is in charge of making sales from the rice stockpile. “If the government doesn’t return our money, we will take back our rice.”
Yingluck’s administration began buying from growers at above-market prices in 2011, spending almost 689 billion baht ($21 billion) over the past two years. Thai reserves are forecast to increase to 14.7 million tons in 2014 from 5.6 million tons in 2011, according to the U.S. Department of Agriculture. While the program will run until the end of this month, the government is seeking to borrow 130 billion baht for harvests in the current crop year that began in October.
“We want the Ministry of Commerce to speed up rice sales,” said Prasit, who leads a group from the central provinces. “The government should allow us to check the quality and volume of the grain in state warehouses to ensure that the program has been implemented under a transparent basis.”
--With assistance from Anuchit Nguyen in Bangkok. Editors: Jake Lloyd-Smith, Alexander Kwiatkowski