Speaking after a meeting with officials from the BOT and the NESBD, Finance Minister Thirachai Phuvanatnaranubala revealed that the central bank had calculated the economic damage resulting from floods at 60 billion THB, accounting for 0.6 percent of the GDP. The NESDB had forecast the loss to be 80-90 billion THB, affecting the GDP by 0.8-0.9 percent.

The agricultural sector is predicted to suffer 40 billion THB in loss. The industrial sector is likely to bear 48 billion THB in damage. Saha Rattana Nakorn Industrail Estate and Rojana Industrial Park in Ayutthaya have been hardest hit.

The Finance Minister said that the government would continue with its financial policy and would cut bureaucratic red tape to speed up budgetary approvals for flood rehabilitation process. As for 2012, the budget distribution will center on repair work of public facilities and other relief measures.

Meanwhile, Deputy PM and Commerce Minister Kittirat Na Ranong has asked the NESDB to study the impact of floods on the GDP. The issue will be discussed at the cabinet meeting on Tuesday.

Agriculture Department Director-General Jirakorn Kosaisevi said stringent measures have been used to inspect microbes as well as pests in vegetables prior to exportation. He hence expressed his confidence that Thai crops are free from the toxic E. coli.

Mr Jirakorn added that the exports of vegetables could be made as usual; however, the Good Manufacturing Practice (GMP) system of every farm nationwide would be reviewed to ensure safety of Thai vegetables.

The director-general pointed out that thousands of European people have been infected with enterohaemorrhagic E. coli (EHEC) bacteria because they usually eat fresh vegetables and salads without well-cooking. He noted that the E. coli strain that was found in vegetables was mostly contaminated with organic fertilizers.

Twenty-one people have reportedly died in Germany, and one in Sweden. Many patients have developed haemolytic-uraemic syndrome (HUS) after the infections, which can be fatal.

Germany is identified as the epicenter of the E. coli spread while cucumbers imported from Spain are blamed as the source of the problem. However, a clarification of the contamination’s origin is not expected in the short term.

Commerce Minister Pornthiva Nakasai indicated that the first import of 30,000 tons of palm oil from Malaysia had not been able to entirely compensate for the country’s shortage. She then suggested that the second batch of 120,000 tons recently approved by the National Palm Oil Policy Committee would need to be acquired within February, citing the public’s rapid consumption of the first lot.

As the incoming lot will be halved into two deliveries, the Ministry is now expediting the arrival of the first portion before the country completely runs out of palm oil expectedly on 20 February. Ms Pornthiva assured that the shortage situation is being monitored closely.

The price of palm oil in the world market presently stands at 1,300 USD per ton. However, no conclusion has been reached on whether the price of the imported palm oil would be the same as the global price and whether the product would still be distributed to consumers at the rate of 47 THB per bottle.

The Ministry of Commerce reported that the palm oil price still continues on the uptrend while the shortage problem is worsening, possibly forcing the price of bottled palm oil to undergo another rise after its first adjustment by 9 THB per bottle early this month.

The price of palm fruits has jumped from 7 THB per kilogram to 10-15 THB, resulting in an increase in the price of semi-purified palm oil from 46 THB per kilogram to 50-60 THB, higher than the ceiling set by the Commerce Ministry. The soaring palm fruit price is attributed to the flood problem late last year, which brought about shortage of the produce and premature harvest among farmers.

Thailand’s reliance on imported palm oil is also faced with obstacles as the global price is moving upward in line with the crude palm oil and para rubber prices. After factoring in the costs of transportation and management during the importing process, the price of bottled palm oil would stand at over 50 THB per bottle, as opposed to 47 THB at present.

In addition, the number of oil palm fruits in the country has been on a continual slump. It was recorded at 49,000 tons in December last year, lower than the target of 75,800 tons, while the figure in January has dropped further to 40,000 tons.

Speaking in a special lecture entitled “Thailand’s Readiness for Food Security Crisis”, Mr Theera said Thailand, as a food producer, had very good security in food as it could produce sufficient food for both domestic consumption and export.

The minister however admitted that there were still some risks due to several unreliable factors. They include climate volatility, domestic production affected by trade liberalization, changes in land use, higher oil price which has led to increasing demand for agricultural produce in energy production, lack of technology development and low earnings of farmers.

The minister said measures had been prepared to strengthen food security, including formulation of agro-related strategies based on qualitative and quantitative research, and permission for imports to substitute agricultural products in shortage.

Mr Theera added that foreign investment would be encouraged while the agriculture sector of the country should be restructured in order to control the domestic production and ensure the national food security.

Intellectual Property Director-General Patchima Thanasanti on Wednesday said that Thailand applied for PGI registration, becoming the Asia nation to enter the European process.

Britain, France, Italy, the Netherlands and Belgium opposed Thailand’s bid for PGI registration of “Khao Hom Mali Thung Kula Rong-Hai”, commonly known as jasmine rice, saying “Hom Mali or jasmine rice” is also grown in other countries, but they asked that Thailand should register only the name “Kula Rong-Hai.”

Khao Hom Mali Thung Kula Rong-Hai is the Thai rice produced in the Thung Kula Rong-Hai area, covering Thailand’s five core northeastern provinces including Roi Et, Mahasarakam, Surin, Yasothon and Si Sa Ket.

Ms Patchama said the department will reapply using the full name to the EU, based on the fact that “Hom Mali” is in the Thai language and in Thailand, Thung Kula Rong-hai is not the specific name of jasmine rice, so the whole phase “Hom Mali Thung Kula Rong-Hai” must be kept as the full name for the PGI registration to signify this kind of rice product clearly.

Hom Mali Thung Kula Rong-Hai’s certification mark approved by more than 50 countries will be demonstrated to the EU to confirm that Thailand has used this name for a long time, she said.

The department will hire an international lawyer to fight for the reapplication of the PGI registration and will seek cooperation from the embassies of the five EU member countries in
Thailand to support the registration of Hom Mali Thong Kula Rong-Hai rice.

Deputy Commerce Minister Alongkorn Ponlaboot will clarify the issue during his visit to the EU countries in March and will invite representatives from the five opposing countries to listen to his explanation.

If Thailand succeeds in registering PGI, the logo will be labelled on rice packages, which can be sold at higher prices, she added

According to Agriculture and Cooperatives Minister Theera Wongsamut, the agricultural goods price index for December last year was at 171.69, an increase of 22.74% year-on-year and 4.06% month-on-month. The price index for the whole year stood at 156.72, rising 23.83% year-on-year.

The price index for the whole 2010 had been in high level since the beginning of the year and had been soaring further from June 2010 onwards. Prices of many agricultural crops in general had been climbing up for seven consecutive months.

Major produces with increasing prices were maize for animal feed, tapioca, oil palm, para rubber, pineapple, coconut and livestock products. Off-season rice was the only crop with declining price during the period due to oversupply.

As for January 2011, it is estimated that the price index will increase further because of the rising oil palm and para rubber prices following higher fuel demand during winter among countries in the western hemisphere.

Under the rice price guarantee scheme, farmers are required to register and sign a lowest-price guarantee contract with a branch of the Bank for Agriculture and Agricultural Cooperatives in their area. During the price guarantee period, if the market prices of rice are lower than the guaranteed prices, farmers participating in the scheme will receive the price differentials. On the contrary, if the market prices are higher than the guaranteed prices, the farmers will be allowed to sell their produce in the market as usual. In other words, the rice price guarantee scheme is similar to typical insurances—an insurance buyer will be compensated if problems arise. But if there are no problems, the insurance buyer’s premium will be considered as hedging costs. Such costs can in a way prevent the farmers from dishonestly reporting their rice stocks to the government.

The rice price guarantee scheme is also less complicated than the rice mortgage scheme and it gives fixed rice prices the farmers will sell their produce at. The rice price guarantee scheme also rids the government of the necessity to use warehouses to store rice or to process the produce as common in the mortgage scheme. It can therefore be concluded that the rice price guarantee is an effective method to prevent corruption and distortion of the market mechanism and at the same time assure the farmers that they will sell their produce at reasonable prices.

However, the rice price guarantee scheme may cost the government dearly if the market prices are much lower than the guaranteed prices. The scheme also requires clear and easy methods to inspect farmer registration and the government needs to be able to clarify details of the scheme to farmers to prevent misunderstandings.

President of the Horticulture Association of Thailand Dr. Anant Dalodom warned that flaws of the rice price guarantee scheme might cause damages to the agricultural sector although it seemingly had more pros than the rice mortgage scheme. He suggested that the government should clearly set the guaranteed prices and premiums paid by the farmers with the government subsidizing the premiums at the early stage of the scheme.

The rice price guarantee scheme can effectively assist farmers and indirectly expand the nation’s rice plantations as it was designed to increase farmers’ profits from rice sales.

The companies involved – DSM, Unilever, Pepsico, Amway and Interflour – committed themselves to re-invigorating the private sector’s contribution to tackling hidden hunger. They agreed to expand their ongoing collaboration with all stakeholders and called for the alignment of global projects and programmes towards the elimination of hidden hunger.

The firms urged all those public bodies tasked with addressing hunger and members of civil society who care about this issue, to join with them to raise the profile of the problem of hidden hunger which is “not high enough on the Government agenda, the development agenda, nor on the media’s agenda”.

Hidden hunger
The commitment was announced at the Micronutrient Forum 2009 in Beijing, which brings together all of the actors involved in addressing the problem of micronutrient deficiency which affects two billion people worldwide. Often called ‘hidden hunger’, micronutrient deficiency describes a pernicious condition where people seem healthy because they get each day enough calories to live – but in reality their poor diet means they are missing out on key minerals and vitamins that, particularly for the young, have extremely serious health consequences.

Nutritional scientists now understand that a lack of key vitamins and minerals causes both physical and mental under-development, meaning stunted growth, learning difficulties and much higher propensity to suffer chronic diseases like cancer, stroke and diabetes – and, arguably counter-intuitively, a much higher chance that the sufferer will end up obese in later life. Inevitably, the poor suffer most: hidden hunger presents not just an appalling social cost, but also huge economic costs due to lost economic production and soaring health costs in countries that can least afford either.

The declaration highlights that no one sector – neither public, nor private – will be able to solve this problem alone. Public agencies’ commitment to deliver food to the world’s poorest needs to be allied with the innovation and R&D of food and nutrition companies, who understand how to create food and food supplements that can meet these crucial needs. Moreover both need to come together to raise the profile of what is in danger of becoming a forgotten issue amidst concern about the world’s financial systems.

“It is time for the world to wake up and address this silent disaster,” Stephan Tanda, Board Member at DSM – the world’s largest supplier of vitamins and minerals, said on behalf of the signatories. “It is easy to forget in a time of global economic crisis that a crisis unfolds every day for those who cannot eat well enough to stay healthy. None of us are doing enough to draw attention to the plight of hundreds of millions, whose hunger problems today cause pain for them now and for the Governments of their countries today and tomorrow.”

“That is why I am proud to commit my company to this fight and to this declaration today. We must continue the R&D and innovations we are already undertaking, especially in these tough economic times. But we must also drive the oxygen of publicity into a campaign to persuade Governments, the media and wider society, mostly in the West, to look up and see the reality of life with hidden hunger for so many of our fellow human beings.”

The Chairman of the Micronutrient Forum, Professor Al Sommer from John Hopkins University, was excited to see such prominent companies outline a more valuable commitment to the issue.

“I am delighted to see the private sector is increasing its commitment to the eradication of hidden hunger,” he said. “We welcome the greater involvement of the private sector, not just in creating accessible, affordable and acceptable food products, but also in helping us draw attention to the calamity of this forgotten Millennium Goal.”