Deputy Prime Minister Somkid Jatusripitak has urged the Commerce and Agriculture and Cooperatives ministries to work with manufacturers to cut fertiliser prices by 30% to support the farm sector.
He also asked the Bank for Agriculture and Agricultural Cooperatives (BACC) to support farmers with loans and suggested that the national oil and gas conglomerate, PTT Plc, join in the production of fertiliser.
Commerce Minister Sontirat Sontijirawong said Prime Minister Prayut Chan-o-cha ordered the two ministries to jointly address the problem of high fertiliser prices.
"Fertiliser makes up 30% of agricultural production cost and affects 30 million farmers nationwide," Mr Sontirat said. "At present, the distribution of fertiliser is rather complex, and even though it is a controlled commodity, farmers are forced to buy fertiliser at a high price."
In addition, Mr Sontirat said farmers mostly purchase fertiliser with loans, resulting in a greater financial burden for them.
Accordingly, the Agriculture and Cooperatives Ministry is urging agricultural cooperatives to produce customised and tailor-made fertiliser themselves, with one producer per district, adding to about 700 producers across the nation. Such fertiliser could be sold and distributed by 30,000 sellers across the nation, with the ministry also serving as one of the distribution channels.
Mr Sontirat said that once the agricultural cooperatives produce fertiliser themselves, farmers can buy fertiliser for 50% cheaper.
He said the government will ask for cooperation from the Small and Medium Enterprise Development Bank of Thailand (SME Bank) to issue loans for fertiliser at low interest rates for farmers in agricultural cooperatives.
"Thong Fah Pracha Rat shops are being told to launch loans for when the farmers buy fertiliser from them, but the two ministries are designing a process for this measure to seek new fertiliser shops and fertiliser producers," Mr Sontirat said. "The Commerce Ministry will report to the mobile cabinet meeting on Tuesday in Nong Khai, and this scheme is expected to see results within 1-2 months."
At present, the value of the local fertiliser market stands at 98 billion baht. Once prices are cut by 30%, farmers can reduce their costs and expenses by roughly 30 billion baht.
Mr Sontirat said PTT has accepted an invitation to join the scheme by conducting a feasibility study for fertiliser production.
"PTT can be the major fertiliser producer in the future and launch fertiliser products with affordable prices for farmers," he said.