The impending lawsuit could at least prod the government into reconsidering its capital-intensive scheme, said Nipon Poapongsakorn, president of the TDRI.
Mr Nipon made his comments after a group of lecturers from the National Institute of Development Administration (Nida) and Thammasat University petitioned the court yesterday to suspend or terminate the scheme, reasoning that it violated the constitution and has cost the state at least 98 billion baht.
The real purpose of the petition was to push for a review of the scheme to prevent further losses which would be caused from the next round of rice pledging, said Adis Israngkura, Nida's dean of the School of Development Economics.
Signing in support of the petition were more than 50 Nida lecturers, 27 Thammasat University academics, and 42 other people who were either students or members of the public who disagreed with the scheme.
Mr Adis claimed the implementation of the pledging scheme was a breach of Section 84 of the constitution which promotes a free and fair economic system and prohibits the government from competing in business with private operators without a sound reason.
The rice pledging has also caused rice quality to deteriorate, he said.
By agreeing to accept rice of mixed quality for pledging, the scheme has undermined the market mechanism in controlling standards. Farmers would focus more on boosting the volume of their rice to raise their income and would no longer have any incentive to improve quality, said Mr Adis.
Another factor leading rice quality to decline was that it was stored for longer periods, he said.
The rice pledging scheme has also affected the country's rice industry. The scheme has pushed up rice prices, undermining Thailand's ability to compete with other rice exporters globally.
Mr Adis said Thai rice exports have so far tumbled by 46% because of the scheme.
The government-to-government sale of pledged rice products at considerably lower prices was tantamount to wasting taxpayers' money to subsidise the sale of cheaper rice to consumers in other countries, he said.
"We're not aiming to terminate the scheme but to seek an adjustment to the ceiling of rice pledging prices that should not exceed a range of 9,000 to 10,000 baht per tonne," said Mr Adis.
"And the the maximum volume of rice to be pledged per household should be limited to only 25 tonnes."
Mr Nipon said the TDRI agreed with any schemes that would help raise farmers' incomes.
"There is nothing wrong with the rice pledging scheme in general but the way the government pledges 'every single grain of paddy' and offers hefty guaranteed prices 35-40% higher than the market price is truly wrong," Mr Nipon said.
The academic said he would not mind if the government went ahead with pledging but farmers should benefit more from the money allocated from the scheme.
According to the TDRI, 63% of 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, most of them in the Northeast.
The government's pledging scheme offers farmers up to 15,000 baht per tonne for white rice paddy and 20,000 baht per tonne for jasmine Hom Mali.
The TDRI estimated that losses for the first year of the programme could reach more than 100 billion baht, based on current global prices and including storage and maintenance costs.
About 2 million farmers out of a total of 3.8 million farm households have applied for the mortgages, most of whom own large plots and enjoy substantial production scale.
Small-scale or subsistence rice farmers hardly benefit from the scheme, according to the research.
"We don't mind if the government tweaks the scheme by offering the pledging price at just 10% above the market price and creates a mechanism allowing small-scale farmers who have to keep their produce in barns gain access to money in the scheme."
Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said the association is gathering information on whether it would be able to file a petition about the effects of the scheme.
He said that exporters may have to wait to see the performance of rice exports for the entire year before taking any action.
However, he pointed out that there is little evidence to support the claim that the pledging scheme has reduced the country's competitiveness in rice exports.
Korbsook Iamsuri said yesterday that Thailand's rice exports by the private sector may stand at 6 million to 6.5 million tonnes, compared with 10.65 million tonnes shipped in 2011.
The figures exclude government-to-government sales. The Commerce Ministry said earlier it has sold more than 7.3 million tonnes to six countries.
But Mr Chookiat was sceptical about the figures especially as he claimed there has been no shipment activity at ports.
"We're talking about shipments of millions of tonnes of rice to be exported. There should be some movement. But many ports are deadly quiet. This is impossible,"he said.