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Thai import tax hits Lao sweetcorn growers
Thailand has infringed the Asean Trade in Goods Agreement after the government slapped an import tax on sweetcorn, deterring Thai traders from buying the crop from Laos.
Now more than 200,000 tonnes of sweetcorn lies in storage in Xayaboury province after the Thai Trade Department imposed a 73 percent tax on sweetcorn imports outside of fixed quotas last month, Foreign Trade Policy Department Director General Mr Bounsom Phommavihane told Vientiane Times yesterday.
There is no mention of this tax in the Asean agreement. Trading irregularities have affected Lao farmers since 2008, when the Thai government suspended all sweetcorn imports, he said.
The agreement states that if a country wants to make a change to its import rules, it must inform the other parties at least one month beforehand, said Mr Bounsom.
This issue will be discussed at the Coordinating Committee for Implementation of Asean next month after the Lao government reported the problem to the Thai government.
The Thai import tax is intended to reserve the market for domestic farmers, but will be suspended from March 1 to June 30, Mr Bounsom said.
This means Xayaboury farmers and traders have to wait until March 1 before they can export the crop to Thailand.
Some of the sweetcorn in storage has been sold to Vietnam and China, but high transport costs drive up the price and deter some potential purchasers.
The provincial industry and commerce sector has asked the Lao government and other provinces to suggest alternative markets, said Xayaboury provincial Industry and Commerce Department Director Mr Somdy Souksavath.
Sweetcorn imported into Thailand within set quotas is subject to a 19 percent tax.
About 60,000 tonnes of the Xayaboury crop had been sold to Thailand before the tax was imposed, he said.
The sudden imposition of the tax by the Thai government is a serious issue for the provincial authorities.
Thailand is still buying Job’s tear, cassava and beans from the province without imposing any import duty, said Mr Somdy.
Xayaboury authorities are asking domestic and overseas companies to buy the sweetcorn, which is at risk of going mouldy while in storage.
Some farmers and traders have stored the crop in insubstantial warehouses and if it rains in the next few weeks most of it will be damaged, Mr Somdy said. Xayaboury province and Thailand have a long relationship in commerce, tourism and services, especially trade. Mr Somdy said he hoped Thailand would honour its promise to lift the import tax from March to June.
Agricultural exports from Xayaboury province to Thailand totalled over US$26 million in fiscal year 2009-10, of which sweetcorn accounted for about US$25 million.
Mr Somdy said Thailand was Xayaboury province’s largest market for agricultural exports followed by Vietnam and China.
Vientiane Times
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