- Associated Press - Wednesday, January 13, 2016

BANGKOK (AP) - A retired army general has been appointed to oversee the Thai government’s response to falling rubber prices after the Cabinet promised subsidies for struggling rubber growers.

Prime Minister Prayuth Chan-ocha said Wednesday that retired Army Chief of Staff Chatchalerm Chalermsuk was appointed president of the Rubber Authority of Thailand, which coordinates rubber policy in conjunction with the industry.

The Cabinet on Tuesday agreed the government would buy as much as 200,000 tons of rubber from growers at up to 60 baht ($1.65) per kilogram (2.2 pounds). The current market price of 34 baht ($0.94) per kilogram is a seven-year low. Prayut said it’s likely the payments won’t be far above market prices.

The military government has been a vociferous critic of a rice subsidy program that was introduced by the civilian government it ousted in 2014. Former Prime Minister Yingluck Shinawatra goes on trial Friday on charges related to that program, which accumulated losses of several billion dollars.

Thailand is the world’s biggest exporter of natural rubber, which is tapped from trees and mainly used in tires. But demand has dropped, especially from its largest market, China, where economic growth is slowing.



Thailand’s production of natural rubber last year was about 4.3 million metric tons.

Much of the money for the rubber purchases is expected to come from the budgets of several government ministries. Government agencies have been asked to look for uses for the rubber.

Army Commander Gen. Theerachai Nakawanich said the military will use rubber in road construction in the south of Thailand and to “produce beddings for soldiers in every division throughout the country.”

Rubber farmers, mostly in southern Thailand, had been threatening protests unless the government came up with a solution to their financial problems.

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