"By its own calculations, the Agricul-ture Department wants to charge us Bt118 million for the delay. That's huge. Our efforts so far to fulfil our side of the bargain have not even been taken into account," said Nipon Muyruangsri of the company's advertising and promotion office.

The Agriculture Department awarded a Bt1.44-billion contract to CP Seeds to supply 90 million seedlings to farmers nationwide. The contract ran from 2003 to August 31, 2006. To date, CP Seeds, with six nurseries nationwide, has delivered 75 million seedlings, The remaining 15 million are valued at Bt230 million. The deadline was recently extended to June 30, 2007.

CP Seeds faces a fine of Bt7 million for failure to meet the initial schedule and is obliged to pay compensation, set by the Agriculture Department at Bt830 per rai, on top of the Bt176 per rai to farmers for opportunity lost.

According to Nipon, the compensation is far too high and it is unclear where the Bt830 will go.

"We are ready to pay farmers who have prepared their land for rubber-planting. We have supplied them with maize seedlings to grow on their land while waiting for the rubber seedlings. However, we're not sure how the department comes up with the Bt830 compensation figure. What is the calculation based on?"

He said CP Seeds was willing to send in staff to help the department calculate compensation acceptable to both sides.

He added that the company's legal team was in negotiations with the department and should finalise the issue by the end of this month.

Since taking on this job, CP Seeds has come in for heavy criticism. The contract was awarded while former prime minister Thaksin Shinawatra was in office and a member of the Chearavanont family, the founder of Charoen Pokphand Group, was in the Cabinet. The rubber-seedling project is under investigation by the National Counter Corruption Commis-sion, which is probing allegations that it was designed to benefit CP Seeds.

Achara Deboonme

The Nation