Government vows to sell rice stocks

The Finance Ministry put the brakes on the planned credit guarantee for the Bank for Agriculture and Agricultural Cooperatives (BAAC) to finance the rice-pledging scheme.

It fears the move could lead to the dissolution of the Pheu Thai Party, a source at the ministry said.

An electoral regulation prohibits the government from using state human and financial resources, both directly and indirectly, ahead of a snap election, the source said.

He said the credit guarantee for the BAAC could be viewed as a breach.

Caretaker Prime Minister Yingluck Shinawatra dissolved the House on Monday and called a general election for Feb 2, following a mass rally of anti-government protesters.

If the credit guarantee to the state-owned bank is crucial, the ministry will ask the cabinet and the Election Commission to consider it first, the source said.

The Public Debt Management Office recently provided a credit guarantee for the BAAC's bonds, but only 37 billion baht of 75 billion offered were sold as investors had several concerns.

Farmers who pledged rice to the government for the main crop are facing late payments from the BAAC as the bank refused to use its own liquidity to fund the programme without the National Rice Policy Committee's approval to widen the 500-billion-baht outstanding spending limit.

Another way to resume payments is for the Commerce Ministry to accelerate its rice sales.

BAAC executive vice-president Supat Eauchai said the bank will coordinate with related government agencies to seek measures to help 4 million farmers awaiting payments.

The caretaker government remains committed to selling rice stocks including new grain available from the 2013/14 harvest to prevent a glut.

The government is still responsible for selling state rice stocks, including the planned disposal of 500,000 to 1 million tonnes through the Agricultural Futures Exchange of Thailand, said Niwatthamrong Bunsongphaisan, caretaker commerce minister, after the National Rice Policy Committee's meeting yesterday.

The ministry needs to discuss with the Council of State whether a caretaker minister can approve rice auction sales. The contracts the minister already signed will still be valid and delivery should be honoured as usual.

Mr Niwatthamrong said negotiations to sell the government's rice stocks on a government-to-government basis with potential buyers such as Indonesia and Malaysia must be postponed.

The Foreign Trade Department reports the government sold 7-8 million tonnes of rice over the last two years through G-to-G contracts.

The government remains adamant its rice stock is 10 million tonnes, although industry sources estimate the amount is closer to 16-17 million tonnes.

The government has spent up to 680 billion baht in four harvest seasons over the last two years, but has sold only 135 billion worth of rice. It has allocated a further 270 billion baht to finance the 2013-14 main crop.

Buying started on Oct 1, and some 6.16 million tonnes of paddy were pledged as of last Thursday.

The rice committee was planning to convene a meeting to approve a temporary increase in the 500-billion-baht outstanding spending ceiling, allowing the BAAC to pay farmers who pledged their rice under the current main crop, running from Oct 1 to Feb 28.

The government already exceeded the limit for the scheme, so its payment to farmers has been delayed, upsetting some farmers who threatened to rally to accelerate payment.

But without a House of Representatives, the acting government has no mandate to temporarily raise the spending ceiling for the scheme.

The cabinet previously set a deadline to decide the outstanding spending limit for the end of this year.

Share your thoughts

Discussion 1 : 12/12/2013 at 02:26 PM
Senseless protests... crippling the government's work... now farmers cant get paid as parliament shut down.. Why does Thais wanna see Thais suffer. Stop disrupting the country and let the country function normally.
Discussion 2 : 12/12/2013 at 01:13 PM
where do you think the money comes from to pay for the rice scheme ? certainly not from the profits from the scheme because that is a state secret the money is part funded from taxes collected from the middle class you criticise the real question you should be asking isw here has all the money gone and if the scheme is such a success why is the bank administrating the scheme out of cash?
Discussion 3 : 12/12/2013 at 12:29 PM
What nonsense. If the Rice Scheme had of been properly implemented and administered the protests wouldn't have had any effect on the rice farmers. The problem is the scheme itself and the poor handling of it by the government. FYI, my in-laws from Isaan are rice farmers, and they marched along side myself and others in the protests.
Discussion 4 : 12/12/2013 at 12:28 PM
You are assuming they actually keep track ?
Discussion 5 : 12/12/2013 at 11:55 AM
Seriously? How long do you think would it take for this scam to implode all by itself? The country is already bankrupt. When the government tried to reduce the 'purchase' price the farmers threatened to come to Bangkok and make a mess. Now the government has to borrow more money to appease to keep it going because they're too scared to lose their support. The only difference from the rice scheme and vote buying is that they use tax payers' money.
Discussion 6 : 12/12/2013 at 11:53 AM
You can see where this one is heading. It's not our fault you have not been paid it's all the fault of the protesters and the Dems . Vote for us again and we will pay you that might even save Thaksin a few baht out of the vote buying fund.
Discussion 7 : 12/12/2013 at 10:19 AM
Huge stock up will make the price lower. A heavy load on the govt.
Discussion 8 : 12/12/2013 at 09:58 AM
At least the rice scam madness can be stopped for a while, until the next red government will be elected in February. The snap election slogan of PTP could be “ If you do not vote for us, your money has gone”
Discussion 9 : 12/12/2013 at 09:56 AM
They can blame the protests for all this mess now,easy way out of it for the PT.
Discussion 10 : 12/12/2013 at 09:50 AM
the first vote-buying measure for the coming election: Dear farmers, sorry we couldn't pay you in time because of these nasty Dems and their protests.
Discussion 11 : 12/12/2013 at 09:44 AM
Anytime the 'government' or whatever it is now vows anything, you know it basically a crock.
Discussion 12 : 12/12/2013 at 09:39 AM
It can only be seen as a breach if it was always in fact a vote buying exercise, and guess what, it always was and still is.
Discussion 13 : 12/12/2013 at 09:20 AM
The rice scheme was always going to make apparent losses. Look at it a different way, the bigger the loss the more good it's doing and the apparent loss is actually not a loss at all. Thailand and the rice industry is actually looking healthy and well placed in the global market. Only on the local level poor are still suffering and it's partly to do with the constant political fighting that drags the country down. Think about that the next time you walk past a beggar on the street in Bangkok and give nothing because beggars don't pay taxes.
Discussion 14 : 12/12/2013 at 09:00 AM
Blaming the fail Rice Scheme on people who protest on the streets? Are the protesters running the country? passing the laws and policies? That is a pathetic statement.
Discussion 15 : 12/12/2013 at 08:57 AM
Because until now nobody thought there was any problem with the rice-scheme, correct? It was running perfectly like planned, correct? Nobody was losing any money, correct? Yeah, just blame the opposition and the people in Bangkok for anything! By the way, who is paying for all the rice-scam losses again?
Discussion 16 : 12/12/2013 at 08:54 AM
Remember under PT rules white lies are acceptable.
Discussion 17 : 12/12/2013 at 08:23 AM
The government has been vowing to sell or lying that they already sold the rice stocks for three years. Why should anything be different now ... oh that's right no infrastructure money to divert to cover ice scam losses.
Discussion 18 : 12/12/2013 at 08:17 AM
"The government remains adamant its rice stock is 10 million tonnes, although industry sources estimate the amount is closer to 16-17 million tonnes". Does this mean that 6 to 7 million tons of rice has gone missing or has been sold and monies not been put into proper accounts? How does one lose 6-7 million tons of anything? When will there be a public audit as it was purchased with tax payers monies?
Discussion 19 : 12/12/2013 at 08:14 AM
The rice farmers don`t need money they have been overpaid for 2 years already meanwhile the country will be broke ! When you vote red the bottom line will be RED !
Discussion 20 : 12/12/2013 at 08:07 AM
As we get closer to the election reports will be issued that all the rice stock pile has been sold and all the money returned. I wonder where they are going to hid it. Maybe just put in under the ground. Gone like magic.
Discussion 21 : 12/12/2013 at 05:57 AM
As we can see here, the government has gone way over it's head. The rice scheme is a total failure.

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