BANGKOK, Oct 9: Five major rice exporting nations agreed on Wednesday to set up a price-regulating mechanism to be known as the Council on Rice Trade Cooperation (CRTC) after a meeting in the Thai capital.

Thai Prime Minister Thaksin Shinawatra said ahead of the talks between ministers from China, India, Pakistan, Thailand and Vietnam that they were likely to agree to establish a secretariat to set floor prices.

But after two-hour discussions the five agreed only to charge the CRTC with the “maintenance of prices at remunerative levels to protect the interests of farmers,” according to the official minutes of the meeting.

“It’s about having a price for rice that’s above the cost of production, it’s not necessarily about setting a price floor,” a commerce ministry official told AFP.

The CRTC, which is to be based in Bangkok initially, is also charged with promoting dialogue to “enhance mutual trust and foster partnership among the five countries in rice trade in order to promote price stability.”

It will meet at least once a year at the ministerial level to “set clear directions and guidelines for rice trade cooperation,” the statement said.

Pakistani Minister for Commerce Abdul Razak Dawwood said he was “very happy” at the Thai government’s initiative to set up the CRTC.

“We support them and hope that the outcome will be positive... we want to basically stabilize prices,” he told AFP.

“The main objective of this exercise is to protect our farmers. I look upon our farmers as decent, hard-working people who over the years have increased production and productivity and yet they aren’t getting the benefits from their hard work.”

Thailand is the world’s leading rice exporter, while India is set to edge Vietnam out of the number two spot this year, according to the UN’s Food and Agriculture Organization forecast in June.

China and Pakistan are the world’s two other major exporters, with China being the world’s largest rice producer.

Thaksin had said that he hoped the secretariat would set minimum price levels so that “each country would then not sell at prices below those.”

The premier said the floor prices would match 1997 levels, and noted that current rice prices were now 30 per cent lower.—AFP