BANGKOK POST 21/6/2004- Despite an earlier plan to expand areas used forgrowing rubber by a million rai, the Agriculture Ministry yesterdayannounced a scheme to increase oil palm cultivation from two to 10 millionrai within 25 years. This would involve areas of land that are currentlybeing used to produce rubber.

The ministry recently spent 1.4 billion baht buying 90 million seedlingsunder its plan to increase the country's rubber cultivation area. Whilethe plan is still far from being completed, Agriculture Minister SomsakThepsuthin yesterday called on farmers to switch from rubber to oil palmcultivation. The short-term aim over five years would be to increase thearea of palm-producing plantations to 3.6 million rai.

The minister said rubber farmers willing to switch to oil palm cultivationwould be paid 6,800 baht a rai. The ministry's move was made in responseto Prime Minister Thaksin Shinawatra's calls to increase the country'spalm oil output for the production of bio-diesel fuel.

Mr Somsak claimed the Energy Ministry had asked for an urgent increase inpalm oil production so as to meet imminent rising demand for bio-dieselfuel.

Rising investment costs had already forced planters to turn about 30,000rai of rubber-growing areas in the South per year into oil palmplantations, Mr Somsak said.

"Planting palm trees is more profitable than rubber production, which ismore labour intensive and commands lower prices," he said.

The minister added that sugarcane plantations should also be replaced withoil palm trees because there was already an oversupply of sugarcane inThailand.

On the question of whether the ministry's heavy promotion of palm oilcould lead to a surplus that could send its price tumbling, Mr Somsaksaid, "the ministry's only task is to increase oil palm cultivation asmuch as possible. Other government agencies, particularly the EnergyMinistry, must bear the responsibility for product management and oil palmprice stabilisation".