Thailand government's Pracha Wiwat plan, which aims at bringing down the costs of down raw material used in the animal feed industry, will help out about 300,000 livestock farmers. But an economist at the Thai Chamber of Commerce has rasied the question as to why other crop farmers will not be recieving similar help.
Aat Pisanwanich of the University of the Thai Chamber of Commerce, says that the reform needs to go beyond the livestock industry as all farmers face high production costs.
"Reducing production costs for farmers is not a new issue. It has been talked about for a long time. Every farmer needs equal assistance. If the government can help across the board, it will bring overall benefits," he said.
Dr Aat is sceptical about the focus on animal feed since the industry is essentially an oligopoly of three to four large producers. Instead, he said the government should effectively enforce the Trade Competition Law and find ways to help small producers compete.
"Necessary measures should include ensuring no price collusion by large manufacturers," he said. "All farmers face the same problem of high production costs. It's not only layer, broiler and pig farmers. The assistance should cover crop farmers as well."
Animal feed costs depended not only on raw materials but also on transport, he added.
Pornsil Patcharintanakul, president of the Thai Feed Mill Association said feed manufacturers wanted the government to eliminate the 2% import tax for soybean meal to reduce costs.Currently, feed makers wanting to import soybeans must buy all domestic soybean production, estimated at about 250,000 tonnes a year, at prices set by the government.
They also need to buy all domestic soybean meal from soybean oil producers at the world price plus a 2% tariff. This measure has been in place for 10 years to protect soybean oil producers.
Thailand imports about 1.2 million tonnes a year of soybeans and 1.8 million tonnes of soybean meal.
Feed manufacturers need to get import licences from the Commerce Ministry every year, and delays in issuing licences also add to costs. said Mr Pornsil.
He said conditions had changed in the past decade and Thailand can no longer produce enough soybeans, so the government should review import tariffs for soybean meal as well as the 15% tariff on fish meal.
Another major raw material is maize, of which local output of 4 million tonnes a year is sufficient for local use. Thailand produces 13 million tonnes of feed.
There are around 50 feed mills in Thailand. Big manufacturers include CP Group, Betagro, Saha Farm, Thai Feed Mill Co and Lee Feed Mill Plc.
