Article Sources : Cane and Sugar Industry in Thailand 1998 - 99 ë Office of the Cane and Sugar Board
Net Revenue Sharing System 70 : 30
(A New Cane Payment System) The net revenue sharing system was first introduced in 1982/1983 crop year. This new sugarcane payment system would do away with the arguments and bargaining between growers and millers at the beginning of the season which used to be common in former times. Now sugarcane is sold and crushed to produce sugar, net proceeds from sugar sold in the domestic market and exported are shared between the cane growers and the millers. In principle, there will now be no need for the cane growers and millers to fight or quarrel with each other, for under the new sharing system, both will share in the proceeds at the end of the season. The proceeds are shared with 70% going to the cane grower and 30% to the millers. The formula of the 70:30 sharing system is as follows: Pc
=
Where Pc R1 R2 Qc Net proceeds
= = = = =
0.7 (R1+R2) Qc stands for sugarcane price per metric ton net proceeds from domestic sale net proceeds from export total sugarcane quantity crushed in each season Gross proceeds minus sale expense and taxes
Under the sharing system, the determination of sugarcane price is divided into two stages:
1. Preliminary cane price At the beginning of the season, forecast of revenues from domestic sale and export and sugarcane quantity will be made. Calculation of preliminary from forecasted figures will be made accordingly. The provisional cane price is to be announced in early December each year.
2. Final cane price
109 √ “ ¬ ß “ π ª √ – ®Ì “ ªï 2
5
4
9
∫√‘ …— ∑ πÈ” µ“≈¢Õπ·°à π ®”°— ¥ (¡À“™π)
At the end of the following September when proceeds from domestic sale and export, as well as sugarcane quantity crushed in the season become known, calculation of final cane price will be made. The final cane price will be announced in October each year. In 1984, the Cane and Sugar Act of 1984 was passed by the Parliament. This Act was considered the most important foundation of the sharing system ensuring a fair distribution of benefits to all parties corned. A Cane and Sugar stabilization Fund was also established in accordance with the Cane and Sugar Act of 1984 with an aim to help support and stabilize cane and sugar production and prices as well as the sugar industry as a whole. At present, there is no ground to produce a massive amount of cane and sugar for price will inevitably drop. If cane production is controlled, cane prices can be stabilized and fair returns can also be ensured.