Thailand's Rice Problem

[FarangFarang]

Read the first story and then read the government's response.

Exporters: State must sell rice stockpile to compete

Thailand's rice industry will collapse unless the government takes more constructive actions by releasing rice from its huge stockpiles, chief of a local rice exporters association warned.

Korbsook Iamsuri, chief of the Thai Rice Exporters Association, said the government must accept losses from sales due to low global prices and fierce competition. This would mean the government would incur losses by selling some of the 17 million tonnes of paddy it paid to farmers last October at a lower price than what it paid for.

Exporters said the volume is equivalent to 10 million tonnes of milled rice and it will take the government up to two years to sell off that volume.

Weak demand and stiff competition reduced exports of Thai rice in the first six months by 45% year-on-year to only 3.45 tonnes rice.

Although 3.05 million tonnes of rice is expected to be exported in the second half this year, total volume exported would be 6.5 million tonnes, the lowest since 2000, she said at the press briefing Wednesday.

Demand for Thai rice in the second half will come from Iraq, South Africa, Indonesia and Japan. But an ample supply of Indian rice coupled with a depreciation of the rupee this year has boosted India's attractiveness as a rice exporter significantly, she said.

Also, to compete with the subcontinent, Vietnam discounted the price of its rice, driving world market prices even lower.

The pledging plan pays 15,000 baht a tonne of paddy, which translates to US$800 a tonne in cost. But Thai rice is sold at an average $550 a tonne compared with $405 for Vietnamese rice and $420 for Indian rice.

The association has called for the release of rice at market prices, not based on pledging costs.

She said that if the government sells to exporters at a lower cost, we could compete with Vietnam.

"The government should sit and talk and tell the truth to exporters before the Thai rice industry suffers any longer or collapses," she said. "If exporters suffer, it will eventually hurt millers and farmers. If no action is done today [selling rice], farmers might not have have to grow rice next year, thanks to enormous supply but low demand," she said.

Chookiat Ophaswongse, president of Thai Rice Exporters Association said more supply will come to 26 million tonnes of paddy to be harvested in October.

He said the government has no other option but to bear the losses which, he said, could be as much as 10,000 baht a tonne.

Mr Chookiat said the programme has made Thai rice artificially high and reduced its standing with foreign buyers who see Vietnam's rice as more reasonably priced.

http://www.bangkokpost.com/business/economics/304310/exporters-state-must-sell-rice-stockpile-to-compete

Thailand will remain top rice exporter, says govt

Thailand will maintain its position as the world’s largest rice exporter this year, permanent secretary for commerce Yanyong Phuangrach said on Thursday.

Thailand had been ranked the top rice exporter in the world for the last 30 years. In recent years the government had raised the price of paddy from 8,000-9,000 baht a tonne to 11,000 baht, while the export price of white rice rose from US$400-500 per tonne to about US$600, Mr Yanyong said.

Responding to remarks by Thai rice traders that Thailand had dropped to third place as a rice exporter, Mr Yanyong said this was not correct. The country was still the world's largest rice exporter, shipping out as much as 3.7 million tonnes of rice over the past six months.

He admitted the amount of rice exported by India and Vietnam had substantially increased because the two major exporters were focusing on increasing the quantity of their rice exports, while Thailand focused on exporting high quality rice to get higher prices, he said.

The permanent secretary said that in the past six months the government has implemented a policy to raise rice prices with the aim of raising farmers' incomes.

The problem was that whenever the government called for bids for its stockpiled rice, the rice traders had forced down the price. When the government wanted to release rice from its stockpile through government to government deals, the rice traders then complained that it had damaged the rice market, he said.

“Rice exporters have benefitted from their business for years. Now the government wants to increase the incomes of rice farmers by setting high rice mortgage prices.

"From now on, the government will focus on the exporting of high quality rice, not on quantity,” said Mr Yanyong.

Commerce Minister Boonsong Teriyapirom took the same tone, stating he was confident that Thailand will be able to maintain its position as the world’s largest rice exporter.

The government is now in talks on the rice trade with Vietnam and Cambodia, and has confidence it will be able to export at least 8 million tonnes of rice this year, as targeted, he said.

The minister was responding to remarks by Korbsook Iamsuri, chief of the Thai Rice Exporters Association, who said on Wednesday that Thailand's rice industry will collapse unless the government takes a more constructive approach by releasing rice from its huge stockpile accumulated under the rice mortgage scheme.

Ms Korbsook said the government must accept losses from sales due to low global prices and fierce competition. This meant the government would incur losses by selling some of the 17 million tonnes of paddy it bought from farmers last October at below the price it paid for the grain.

This stockpile is equivalent to 10 million tonnes of milled rice, and it will take the government up to two years to sell off that amount.

Weak demand and stiff competition had reduced exports of Thai rice in the first six months by 45 per cent year-on-year to only 3.45 tonnes rice.

Ms Korbsook projected that rice exports in the second half of the year would stand at around three million tonnes.

Mr Boonsong admitted that rice exports over the first half of the year had substantially dropped, but that was not an issue because monthly rice exports were still at a high level.

On the criticism by several academics that the government’s rice mortgage scheme had failed, Mr Boonsong said the academics should be more open-minded and ask the farmers themselves whether they were satisfied with the programme.

He cited a recent survey by the University of the Thai Chamber of Commerce which showed that most rice farmers were happy with the rice pledging programme.

Mr Boonsong insisted that the government would not review the programme and would continue it for the betterment of rice farmers.

The mortgage price of paddy would still be set at 15,000 baht a tonne and 20,000 baht per tonne for hom mali (jasmine) paddy, he said.

There would be a meeting of the National Rice Policy Committee on Friday and the Commerce Ministry plans to propose that a total budget of about 200 billion baht be allocated for the rice mortgage scheme, which would start for the next harvest on Oct 1, 2012 and continue through February 2013, he said.

http://www.bangkokpost.com/news/local/304421/thailand-to-remain-top-rice-exporter

So who would you believe, the rice growers or the government?

[whitelotus]

Read the first story and then read the government's response.

http://www.bangkokpost.com/business/economics/304310/exporters-state-must-sell-rice-stockpile-to-compete

http://www.bangkokpost.com/news/local/304421/thailand-to-remain-top-rice-exporter

So who would you believe, the rice growers or the government?

never listen nor believe wat bullshit government say!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[FarangFarang]

never listen nor believe wat bullshit government say!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I just love how they ignore Economics 101. There are many problems with rice production in Thailand. The first is the insistence that Thai Jasmine rice is better. Even if it is (and that's disputable), what kind of premium will people pay for rice? If I go to the store and see one bag of rice for $5 and another for $15, guess which one I'm going to buy?

And many of Thailand's (former) buyers were countries like Iraq and the Philippines. Do you think they're going to care whether they get the sweet Jasmine rice or the regular rice? They're thinking about it as how much can they buy to feed their families. They're not gourmet cooks competing in a cooking competition.

[CiaranM]

Read the first story and then read the government's response.

http://www.bangkokpost.com/business/economics/304310/exporters-state-must-sell-rice-stockpile-to-compete

http://www.bangkokpost.com/news/local/304421/thailand-to-remain-top-rice-exporter

So who would you believe, the rice growers or the government?

well actually i think the rice growers and the government appear to be happy enough with the high price for thai rice !!

it's the rice exporters who r complaining as they can't ******* sell the rice !!! surprise surprise !!!

[FarangFarang]

well actually i think the rice growers and the government appear to be happy enough with the high price for thai rice !!

it's the rice exporters who r complaining as they can't fucking sell the rice !!! surprise surprise !!!

True. I should have said exporters.

It's crazy how stupid they are. Who couldn't figure this out?

Buy rice at above market rates + ? = Profit

[FarangFarang]

More estimates that Thailand will fall behind Vietnam and India in rice exports.

http://www.bangkokpost.com/business/economics/304502/us-report-puts-thai-rice-edge-in-doubt

[whitelotus]

well actually i think the rice growers and the government appear to be happy enough with the high price for thai rice !!

it's the rice exporters who r complaining as they can't ******* sell the rice !!! surprise surprise !!!

i think that the the one who get benefit from high price rice is the middle man who purchased rice from farmer and add alot of margin then sell to the exporter who needs to buy as they are forced by order!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

but the f************** government do nothing but only let things go as long as their ppl (the middle man) still get benefit.

Who care about this ******* country fortune!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[Stramash]

i think that the the one who get benefit from high price rice is the middle man who purchased rice from farmer and add alot of margin then sell to the exporter who needs to buy as they are forced by order!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

but the f************** government do nothing but only let things go as long as their ppl (the middle man) still get benefit.

Who care about this ******* country fortune!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

WL For PM!!!!!!!!

[FarangFarang]

f**************

I'm not sure what that word was supposed to be. I don't know a 15 letter word starting with F that fits there :-)

[Stramash]

I'm not sure what that word was supposed to be. I don't know a 15 letter word starting with F that fits there :-)

And I thought you had spent time with Ciaran when drunk! It is so obviously fuuuuuccckkking!!!!

[FarangFarang]

And I thought you had spent time with Ciaran when drunk! It is so obviously fuuuuuccckkking!!!!

Damn, my Ciaran -> English, English -> Ciaran Dictionary only uses 4 u's instead of 5. I'll send them the correction.

[FarangFarang]

[ATTACH=CONFIG]119314[/ATTACH]

Sort of like this?

[FarangFarang]

Rice numbers do not add up

TDRI seeks answers to 3.3m-tonne surplus

A think tank has asked the government to clarify the origins of 3.3 million tonnes of rice sold in the market now on suspicions they were imported.

Nipon Poapongsakorn, president of the Thailand Research and Development Institute (TDRI), said there were inconsistencies in the quantities of rice in the country and urged Prime Minister Yingluck Shinawatra to set up an independent committee to look into them.

Based on his study, as of July 13 this year, milled rice from the pledging programme which started on Oct 7 last year totalled 10.2 million tonnes. Exports and local consumption during the same period were 5.1 million tonnes and 7.4 million tonnes respectively.

Since the government has yet to unload its stock, the combined amount of rice in the country as of July 13 was 22.7 million tonnes. But the country produced only 19.4 million tonnes of rice from the main and second crops.

"The question is where the difference of 3.3 million tonnes came from," said Dr Nipon.

He suspected that about 1 million tonnes of the discrepancy might have been smuggled from neighbouring countries by local traders to take advantage of the high prices offered by the pledging programme.

Another 2.2 million tonnes could have been leaked from the warehouses of millers and traders.

Rumours have it that some brokers have tried to sell rice in the government's new-rice stockpile to exporters while some old rice from similar price-support programmes of previous governments was packed under the Blue Flag brand for domestic consumption and supplied to the Commerce Ministry's low-priced Took Jai shops.

As a result, TDRI wants to verify that 400,000 tonnes of rice has really been packed and sold under the Blue Flag brand as approved by the government.

According to the US Department of Agriculture data for January to mid-July this year, Indonesia imported 1.15 million tonnes of rice, the Philippines 1.5 million tonnes and China 1 million tonnes.

Altogether, the three countries imported 3.65 million tonnes against the combined import projection of 4.25 million tonnes _ Indonesia 1.25 million and China and the Philippines 1.5 million each.

Based on the projection, the countries would need another 600,000 tonnes this year.

The amount is far short of the Thai Commerce Ministry's plan to sell 3 million tonnes under government-to-government deals _ 1.5 million to Indonesia and the rest to the Philippines and China.

Moreover, Dr Nipon pointed out that the Philippines is unlikely to buy rice at the moment because it is harvesting its own paddy while Indonesia is trying to keep the lid on its debt burden.

"If Thailand wants to sell rice we must compete with India and Vietnam, and chances are, buying countries would choose cheaper rice [from India and Vietnam]," he said.

http://www.bangkokpost.com/business/economics/304941/rice-numbers-do-not-add-up

[English_Bob]

This was completely predictable...

Cambodia sells rice at X baht per tonne. Thailand buys rice at more than X baht per tonne.

Only a fool couldn't see that people would buy cheap rice in Cambodia and sell it to the stupidest government in Asia.

[FarangFarang]

This was completely predictable...

Cambodia sells rice at X baht per tonne. Thailand buys rice at more than X baht per tonne.

Only a fool couldn't see that people would buy cheap rice in Cambodia and sell it to the stupidest government in Asia.

The really dangerous part is that this has the potential to become a huge bombshell for Thailand. The government is sitting on millions of tons of rice they purchased at 40% above the market price. With India and Vietnam producing rice like crazy, supply and demand dictate that the price will either stay at today's rates or go down even further (barring any surge in demand).

The Thai government is like a stock trader sitting on huge losses but from an accounting perspective he doesn't have to realize the losses until he sells. This was the same thing that happened in the financial collapse a few years ago. Until they sell, they can keep the rice on the government's books and manipulate it to look like they haven't lost anything.

But when they are eventually forced to take the loss . . . ouch. You could see the baht get hammered, investment ratings get dropped, etc, etc.

[English_Bob]

It's more urgent than that... What's going to happen next year?

India and Vietnam carry on producing plenty. Global demand is matched by supply and where will they put the surplus in Thailand? The warehouses are already full from this year's cock up.

Thais produce more than they consume.

If they can't export it, store it or eat it... what the hell will they do with it?

I can foresee a situation where the government is paying them not ​to grow rice!

[CiaranM]

"If Thailand wants to sell rice we must compete with India and Vietnam, and chances are, buying countries would choose cheaper rice [from India and Vietnam]," he said.

http://www.bangkokpost.com/business/economics/304941/rice-numbers-do-not-add-up

no **** Sherlock !!!

[FarangFarang]

It's more urgent than that... What's going to happen next year?

India and Vietnam carry on producing plenty. Global demand is matched by supply and where will they put the surplus in Thailand? The warehouses are already full from this year's cock up.

Thais produce more than they consume.

If they can't export it, store it or eat it... what the hell will they do with it?

I can foresee a situation where the government is paying them not ​to grow rice!

True. I remember seeing Thailand bragging about becoming the next Middle East during the rice shortage a few years back. I couldn't help but laughing that someone so senior in the Thai government could be so clueless about basic economics. And I predicted back then that instead of sky-high rice prices like the government official was predicting that in a few years rice would be cheaper.

Of course everyone was going to start producing more rice. Whenever there's a shortage people respond. And that's doubly so when Thailand helped manufacture the rice shortage with the middlemen holding supply from the market so they could make a killing driving the price up. All rice dependent countries immediately started growing rice. They didn't want to get caught without their basic food staple again.

Now Thailand is sitting on millions of tons of rice they purchased at 40% above the market rate and India and Vietnam are cranking out more and more rice every year driving the price down even further. Not exactly the Middle East situation Mr. Chucklehead was predicting unless he was talking about Palestine or Syria.

[CiaranM]

It's more urgent than that... What's going to happen next year?

India and Vietnam carry on producing plenty. Global demand is matched by supply and where will they put the surplus in Thailand? The warehouses are already full from this year's cock up.

Thais produce more than they consume.

If they can't export it, store it or eat it... what the hell will they do with it?

I can foresee a situation where the government is paying them not ​to grow rice!

next year maybe ???

although the thai government isn't the first to buy up produce at over the market rate and then get lumbered with stuff they couldn't sell ... the EU wine lakes and butter mountains spring to mind !!

[FarangFarang]

next year maybe ???

although the thai government isn't the first to buy up produce at over the market rate and then get lumbered with stuff they couldn't sell ... the EU wine lakes and butter mountains spring to mind !!

The US has had the same thing with subsidies. We used to pour milk into the gutters because the farmers overproduced, the government agreed to buy no matter how much, and that kept the price high so the farmers could keep overproducing.

[FarangFarang]

Rice scheme is 'pro-rich'

The government rice pledging programme is rife with corruption and inefficiency, putting the entire industry at risk unless changes are made, local economists and rice experts said.

One of the most important economic policies of the Yingluck Shinawatra government, the programme represents a guarantee by the state to purchase unlimited amounts of rice from local farmers at prices as much as 50% higher than market value.

But economists said the programme, which has cost the state more than 200 billion baht to date, is one of the worst-designed and costliest policies enacted by the Yingluck government as it nears the end of its first year in office.

Ammar Siamwalla, honorary economist at the Thailand Development Research Institute (TDRI), said the rice pledging scheme was "pro-rich and anti-poor", with high pledging prices raising the cost of living for the entire public.

"The policy is biased in favour of farmers who can produce more rice compared with those who produce less," he said yesterday. "The policy has also added to the hardship faced by the poor who must purchase rice for their own consumption."

According to the TDRI, 63% of the funds spent on the pledging programme went to merchants and millers, with the rest going to farmers. Only 5% of funds spent went to poor farmers.

The pledging scheme offers farmers prices of up to 15,000 baht per tonne for white rice paddy and 20,000 baht per tonne for jasmine Hom Mali rice.

The TDRI estimates losses for the first year of the programme have reached more than 100 billion baht, based on current global prices and including storage and maintenance costs.

Dr Ammar said the price guarantee programme of the Abhisit Vejjajiva government was more efficient in ensuring funds went directly to farmers. The programme, developed with the TDRI, would pay farmers the difference in crop market prices and regularly-adjusted benchmark prices.

"The insurance programme avoided government intervention in the market, and helped farmers regardless of how much they produced," Dr Ammar said.

But Kittiratt Na-Ranong, the finance minister and a deputy prime minister, said the government is committed to maintaining the pledging scheme.

He added that the Abhisit government incurred losses of 50 billion baht from its insurance programme.

"I don't think it's right. Why would we want to export rice at low prices simply to increase volumes? Thai farmers would suffer. I would rather keep prices high, even though it will cost the government," Mr Kittiratt said.

But TDRI president Nipon Poapongsakorn said the pledging programme must be "fine tuned".

While policies to help raise crop prices were well-intentioned, high prices should go together with high quality, he said. The pledging prices, as much as 50% over market value, encourages farmers to raise production without concern for quality.

Dr Nipon said hopes that the policy would raise global rice prices have proven false, as the government is unable to influence world supply or demand.

"If rice prices are high, who can force the more than 400 million rice farmers around the world to reduce their plantings?" Dr Nipon said.

Thailand is one of the world's largest rice exporters but ranks far behind China, India, Indonesia and Vietnam in terms of total production.

Exports this year fell 45% in the first half from the same period the year prior to 3.45 million tonnes, with export values down 34% to 71.4 billion baht.

Dr Nipon said the pledging scheme has the potential for corruption, with funds channelled away from farmers to surveyors, rice mills and middlemen.

Vietnam and other rice-exporters are benefitting from the higher prices of Thai rice. "Thai taxpayers are helping the exporters of other countries," said Dr Nipon.

Somporn Isvilanonda, a researcher from the Knowledge Network Institute of Thailand, agreed. The government must sell rice for at least US$800 (25,000 baht) a tonne to justify the pledge price of 15,000 baht a tonne, he said.

But white rice is currently priced at just $575 a tonne, and Vietnam currently sells its rice at just $450 a tonne.

Mr Somporn said the government should invest in educating farmers on how to reduce production costs and fund more agricultural research.

"But the Agriculture Ministry only devotes 1.3 billion baht per year to agricultural research," he said.

Even farmers have complained about the pledging scheme. Prasit Boonchoei, chairman of the Thai Farmers Association, said that with so much rice now in storage for the state, rice mills are able to negotiate lower prices with farmers for new paddy pledges.

Farmers are forced to accept lower prices or risk losses due to spoilage, he said. Rules against the cross-provincial sale of paddy also limits options.

Mr Prasit said 75% to 80% of all rice farmers who rent land are also facing rising rental costs.

Kiat Sittheeamorn, a Democrat MP, noted that the government has committed vast amounts of funds to help only a small segment of the population.

More than 200 billion baht has been spent buying rice from just 1.7 million farm households, out of 5.6 million rice-farming households nationwide.

Mr Kiat called for investigations into allegations that the high pledging prices have resulted in around 2-3 million tonnes of imported rice being sold to the government under the programme.

http://www.bangkokpost.com/news/local/306543/rice-scheme-is-pro-rich

[FarangFarang]

This whole rice scheme debacle keeps getting crazier and crazier

Kittiratt admits rice scheme tainted

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has admitted that corruption is rife in the government's rice price mortgage scheme, as a Democrat MP slams the policy and demands accountability for the huge debt being incurred.

"The corruption in the rice scheme has been brought up by the opposition to attack the government, but the government has never said that the scheme is free of corruption," Mr Kittirat said on Friday.

"It's a good thing that police have arrested people for allegedly taking advantage of the rice pledging programme in the Northeast but I believe corruption is still widespread in this programme."

The government has assigned Deputy Prime Minister Chalerm Yubamrung to help suppress graft in the scheme, he said.

The minister also rejected suggestions the pledging scheme violates the regulations of the World Trade Organisation.

Many academics have criticised the government's rice pledging scheme, saying it would cost up to one billion baht in damage to the industry. They said it would hurt Thai rice exporters, affect rice quality and fuel corruption.

At a dinner hosted by the Federation of Thai Capital Market Organisations on Thursday, Democrat Party core member and former finance minister Korn Chatijkavanij said the Pheu Thai-led government's rice price pledging scheme for farmers is plagued with corruption and has caused serious damage to the country.

Mr Kittiratt rejected Mr Korn's criticism, saying the rice price guarantee scheme introduced during the Democrat-led government only helped farmers sell their paddy at market price, whereas Pheu Thai's scheme has enabled farmers to earn more by selling at above the market benchmark price.

Mr Kittiratt said he was ready to go on any stage to debate with any academic and counter their criticism.

Meanwhile, Democrat Party list MP Kiat Sittheeamorn said on Friday the paddy mortgage programme could cause over 100 billion baht in damage to the fiscal budget, with just 9,000 out of the 20,000 baht per tonne spent by the government actually reaching farmers.

He said the government could eventually spend as much as 400 billion baht per year to keep afloat its policy of pledging to buy every single grain of paddy, and stands to suffer an annual 150 billion baht loss.

Even then, it would fail to meet the desired outcome as the scheme had failed to push up the market price to 15,000 baht per tonne for ordinary white paddy and 20,000 baht per tonne for Hom Mali paddy.

"The government's whole premise for this project has been proven wrong and it will cause significant damage to the national budget.

"The government has ended up stockpiling all paddy production, but failing to push up the market price of rice. The situation is a self-fulfilling prophecy as the more paddy the government stores, the farther the price tends to fall," Mr Kiat said.

The world market price of rice was depressed. India had stockpiled 30 million tonnes of rice and the Thai government's stockpile had increased rapidly because of the pledging project. This would plunge the government into loss-making if it unloads the stockpile, the opposition MP said.

Domestic sellers of packed rice had to increase prices because paddy that they bought to process was more expensive than the world market price. This meant Thais had to pay more for the rice they eat, but farmers' incomes had hardly increased at all, he said.

Mr Kiat said the scheme also caused Thailand to lose its position as the world's top rice exporter to India and Vietnam, because of the state’s price intervention. Pledging to buy rice at a price much higher than the market price was a populist policy which had caused Thai exporters to lose price competitiveness.

According to the Thai Rice Exporters Association, Thai traders exported 330,000 tonnes of rice in the period July 1 to 23 -- 56 per cent less that July in 2011, when they exported 769,000 tonnes. In the first seven months of this year, the country exported 3.7 million tonnes of rice compared to 7.1 million tonnes last year.

"Thailand has been criticised in the the media worldwide. The rice pledging scheme has allowed only one fifth of the money spent by the government to reach the farmers.

"The Yingluck-government cannot remain silent on this. It must answer the question - whose pockets are being lined by the other four-fifths of the money?" Mr Kiat said.

"The large stocks of rice that the government has acquired will prove problematic. The government had to hire private firms to improve the quality of paddy kept in the warehouses.

"Whenever governments sell paddy from warehouses, there have always been suspicions and criticism about lack of transparency, collusion and fraud. All of these have put the state at a disadvantage and dampened the country’s export potential."

The Democrat lawmaker said the government now had outside the budget borrowing of more than 200 billion baht through the Bank for Agriculture and Agricultural Cooperatives (BAAC) and the Government Savings Bank (GSB), but this money was being spent to help just 1.7 million out of a total 5.6 million rice farm households.

"The government should seriously consider if it wants the BAAC and GSB to continue shouldering the burden deriving from this project, and who will be accountable for the incurred damage. It cannot claim that this is state policy and that, therefore, no one needs to take responsibility," Mr Kiat said.

[CiaranM]

Kittiratt admits rice scheme tainted

Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has admitted that corruption is rife in the government's rice price mortgage scheme, as a Democrat MP slams the policy and demands accountability for the huge debt being incurred.

"The corruption in the rice scheme has been brought up by the opposition to attack the government, but the government has never said that the scheme is free of corruption," Mr Kittirat said on Friday.

"It's a good thing that police have arrested people for allegedly taking advantage of the rice pledging programme in the Northeast but I believe corruption is still widespread in this programme."

u couldn't ******* make it up !!!

[CiaranM]

Mr Kittiratt rejected Mr Korn's criticism, saying the rice price guarantee scheme introduced during the Democrat-led government only helped farmers sell their paddy at market price, whereas Pheu Thai's scheme has enabled farmers to earn more by selling at above the market benchmark price.

Mr Kittiratt said he was ready to go on any stage to debate with any academic and counter their criticism.

and he says this like it's a good thing ... just where the **** do they find these half wits ??

[FarangFarang]

Huge losses loom in govt rice sell-off

Mills overloaded with pledge scheme stocks

Thailand could face tens of billions of baht in losses as the government moves to sell off some of its rice stocks to India and China with warehouses and silos across the country overloaded with rice purchased under the state pledging scheme.

Commerce Minister Boonsong Teriyapirom said the government estimates it will sell 4-5 million tonnes of rice in government-to-government deals this year, up from an earlier estimate of 3 million tonnes.

The ministry recently completed sales of 2 million tonnes of rice to China and 1 million tonnes to Indonesia, at prices "on par with market prices", Mr Boonsong said.

Authorities are negotiating with countries such as Bangladesh, the Philippines and nations in Africa and the Middle East to sell additional rice from state stocks, he added.

Cash received from the government sales would in turn be used to repay debt owed by the government to the Bank for Agriculture and Agricultural Co-operatives, the state bank responsible for managing the rice pledging scheme.

According to the Thai Rice Exporters Association, rice in the global market was quoted at US$564 per tonne for 5% white rice, and $580 per tonne for 100% grade B rice.

But analysts estimate the government must sell rice for at least $800 per tonne simply to recoup the costs paid to farmers under the pledging programme.

The programme, a cornerstone of the Yingluck Shinawatra government's rural development policy, offers farmers prices of up to 15,000 baht per tonne for white rice paddy and 20,000 baht per tonne for jasmine Hom Mali rice.

The pledging prices, set as much as 40% to 50% over previous market rates, has made the government essentially the sole buyer of rice in the country, with inventories at local mills and silos all but overloaded with rice pledged to the scheme and awaiting sale.

Economists have estimated that taxpayers' losses could reach 100 billion baht this year alone out of the 260 billion baht in funds committed to the pledging programme. Critics argue that the scheme offers little benefit to poor farmers, but instead rewards rice mills and large-scale farmers while also raising costs for consumers and taxpayers.

Allegations of corruption have also dogged the project, including claims that rice is being smuggled from neighbouring countries to be sold into the government programme.

Members of a House standing committee on economic development, chaired by Democrat MP for Bangkok Chanin Rungsaeng, yesterday visited mills in Ayutthaya and discovered a number of irregularities in the programme, including the transfer of rights from farmers to middlemen to benefit from the high pledging prices.

Mr Chanin said the committee would ask rice mill operators, farmers and other participants in the rice pledging programme to give testimony before the committee about the irregularities.

"The government can't just say that these are operational problems. Policy and operations go hand in hand," Mr Chanin said.

"If the policies are not well-designed from the start, it's no different than leaving the door open for thieves to enter your house."

Monitoring systems and CCTV cameras all failed to track lorries shipping rice pledged to the programme or else lacked past records to allow for audits.

A total of 26 mills in Ayutthaya have accepted pledges of 627,678 tonnes of rice, or nearly all of the 662,421 tonnes produced within the province over the past year to Aug 6.

Warong Dejkitvikrom, a Democrat MP for Phitsanulok, said regulations call for rice mills participating in the pledging programme to have CCTV cameras installed to help record rice shipments to the mills.

Documents must also track the time and licence plates of lorries delivering rice to ensure shipments are made.

"Following the inspection of all three mills, no review could be made, with each alleging 'technical problems' in their recording systems," Mr Warong said.

He said farmers have also reported that the mills paid farmers 500 baht to 1,000 baht each to transfer their pledging rights to the mills, showing that the government's pledging policy was rife with loopholes and possible corruption.

But Somsak Ekpinijpitaya, executive chairman of the Srithepmongkol Mill, one of the three mills visited by the MPs, insisted state regulations do not require 24-hour video monitoring.

He said it was unfair to say the entire system was corrupt, and suggested the House panel visit local farmers to judge the effectiveness of the programme.

Finance Minister Kittiratt Na-Ranong acknowledged that areas for improvement remained.

"I have never said that the rice pledging programme was free from corruption," he said.

"If we didn't think there were problems, then the government wouldn't have needed to set up a panel to review any complaints."

Deputy Prime Minister Chalerm Yubamrung is currently overseeing an investigation by the Department of Special Investigation into corruption allegations in the pledging programme.

http://www.bangkokpost.com/news/local/307115/huge-losses-loom-in-govt-rice-sell-off