The government plans to pay 15,000 baht per ton ($498) for unmilled white rice and 20,000 baht for Hom Mali fragrant rice, as much as 47 percent above current market rates, according to Bloomberg News calculations based on data from the Thai Rice Mills Association. Purchases are due to start on Oct. 7.

Thailand's effort to raise farm incomes may fuel price gains across a region that the USDA estimates accounts for 87 percent of global rice consumption. Thailand has been the world's largest exporter since 1981, according to the USDA.

"We're not talking about pushing up the price three, four, or fivefold so that people will switch to consume bread or other grains," Kittiratt said. "I'm confident the price we're offering is reasonable. I'll not be happy if the price surges higher than what we suggest."

Competing suppliers may also take the opportunity to raise prices, Abah Ofon, an analyst at Standard Chartered Plc, said in an interview with Bloomberg Television today.

Eoin Treacy's view Populist politicians will always promise the people what they want, particularly those who vote for them. With such a large Thai farming population and many of them supporting the Shinawatras, agriculture prices are likely to become a more contentious issue.

An effective price hike by the world's largest exporter cannot but have an impact on rice prices. Inclement growing conditions elsewhere and rising per capita calorie consumption across Asia are additional bullish considerations.

Rough rice prices broke out of a two-year base in July and continue to advance steadily. They have held a progression of higher reaction lows since March and a sustained move below $17 would now be required to question medium-term uptrend consistency.

Corn prices have paused below the psychological 800¢ level. Yesterday's small upside key reversal was countermanded today. A clear upward dynamic sustained for more than a couple of days will be required to suggest demand is returning to dominance. Over the medium-term a sustained move below 700¢ would be required to question upside potential.

Soybeans did not hold last week's upward break and have returned to test the 1400¢ region. A clear upward dynamic is now required to confirm a return to demand dominance.

Wheat prices have been largely rangebound for much of the last year and have exhibited a progression of lower rally highs since February. A sustained move above 800¢ will be required to break the 7-month downtrend and suggest demand is returning to medium-term dominance.