BANGKOK: Thailand lost its status as the world’s top rice exporter in 2012 as a controversial scheme to boost farmer incomes saw it overtaken by India and Vietnam, an industry group said on Friday.

Thailand exported 6.9 million tons of rice last year, falling behind India which shipped 9.5 million tons and Vietnam which sold 7.8 million tons overseas, according to the Thai Rice Exporters Association.

Thai exports slumped 35 percent from the 2011 level of about 10.6 million tons, based on the group’s figures.

“We had been the champion since 1980, for 31 years, but we lost the top spot in 2012,”  Chookiat Ophaswongse, the group’s honorary president, told Agence France-Presse.

He said that figures from the rival exporters were based on data from Vietnam’s rice industry and the US Department of Agriculture (USDA).

Prime Minister Yingluck Shinawatra’s more than one-year-old policy to buy rice from farmers for 50 percent more than the market price, while popular with the rural poor, has hit the
competitiveness of Thai exports.

“Now Thai rice is $130 to $150 per ton more expensive than our competitors. That’s why our exports have fallen as no customer can buy from us,” said Chookiat.

“Exporters should change their jobs because they can’t survive. Rice has become a political issue now,” he added.

The kingdom produces about 20 million tons of the grain annually on average, about half of which was sold overseas in the past.

Chookiat estimated that Thailand now has about 12 million tons to 13 million tons of stock in storage and predicted that by the third quarter of 2013 this rice mountain will have grown to about 20 million tons.

While the scheme is putting strains on Thailand’s government finances, it has been welcomed by many farmers, whose support helped sweep Yingluck to a landslide election victory last year.

Her older brother Thaksin Shinawatra, who was ousted as prime minister by royalist generals in a coup in 2006, is hugely popular in rural Thailand thanks to his populist policies while in power.

The government has said that it is confident that it can find buyers for its rice on world markets at a price that will raise the living standards of its farmers. It said that it has signed deals to sell rice directly to other countries.