B240bn approved for rice pledging scheme

The cabinet on Tuesday approved a total budget of 240 billion baht for a new round of rice price pledging, destined for the 15 million tonnes harvest due to begin this month, permanent secretary for commerce Watcharee Wimuktayon said.

The period for the new round of pledging runs from Oct 1, 2012 to Sept 15, 2013. Mortgaged rice prices were set at 15,000 baht a tonne for unmilled white rice paddy and 20,000 baht per tonne for Hom Mali (Jasmine) paddy, she said.

Mrs Watcharee said the cabinet had not discussed the pledging scheme for the second crop, which would be harvested in March next year. The government had a six-month window to reconsider the scheme.

She said the allocation of the 240 billion baht budget was based on the premise the government would receive about 40 billion baht from its current rice release.

It was expected that by the end of this year cash returns would be about 100 billion baht and, therefore, the Bank for Agriculture and Agricultural Cooperatives would not have to raise loans to cover the entire 240 billion baht, she added.

Meanwhile, the main opposition Democrat Party said it does not believe there is only four million tonnes of  rice remaining in the government stockpile.

Democrat MP for Phitsanulok Warong Dejkitwikrom said on Tuesday that Commerce Minister Boonsong Teriyapirom had not made public the true facts on the state of the rice stockpile.

There should be about 14 million tonnes of milled rice remaining in the stockpile, not four million tonnes as the minister had claimed, he said.

Mr Warong called on Mr Boonsong to clarify exactly where the rice went, and at what prices.

The opposition MP said he believed the stocked rice was secretly sold to close aides of politicians and that the rice would be mortgaged to the government’s pledging scheme again, to reap a second payment.

Mr Warong said the permanent secretary for commerce’s remark that the rice price pledging scheme was  constitutional and that it was a just and fair scheme to help poor rice farmers  was just not true.

Only large farmers would benefit from this scheme, not the small ones. He had visited farmers in Sukhothai and they complained bitterly that they were not paid the declared mortgage prices. Many of them had still not  received the money, he said.

He defended the right of academics at the National Institute of Development Administration (Nida) to petition the Constitution Court to issue an injunction halting the scheme. The Democrat MP said these academics were directly affected by the government’s budget spending on this programme. Therefore, they had the constitutional right to take action.

Story continues below.

Members of the Farmers Network and the June 24 for Democracy group on Tuesday rallied in front of the Nida  building compound in opposition to the 146 academics, led by Adis Israngkul na Ayutthaya, who petitioned the Constitution Court seeking a ruling on the constitutionality of the pledging scheme.

They issued a statement saying that they opposed the move, that they are poor farmers who have no money to hire academics to help protect their interests. They were not like the members of the Rice Traders Association,  who were among the country’s richest people.

The statement said the academics admitted that they had never asked poor farmers for opinions about the scheme. This was an admission that they listened only to the other side and that the academics moved to protect only the rice traders.

It stated that the academics had no legitimacy to petition the court because they had failed to make any  wide study of the impacts and benefits of the pledging scheme, particularly on farmers, who were the poorest group of people in the country.

The benefits of farmers in developed nations were well protected and they had high incomes, but some Thai academics had failed to stand side by side with Thai farmers, who were the underdogs, the statement said.

Many reporters had interviewed farmers and reported that the farmers confirmed that they benefitted from the rice scheme, the statement said. Rice traders and rice milers stood to lose from this policy. It questioned whether the academics had taken this into account.

The statement asked the academics whether they saw themselves as opponents of the government, which gained a landslide victory in the general election. The academics had never moved against any government formed by the military camp.

The farmers' statement asked whether the movement by the academics was aimed at giving the justice system more power over the government elected by the majority of the people.

Songchai Wimolphattranont, a representative of the June 24 for Democracy group, said the academics were attempting to use the charter to minimise the authority of the government.

“If there is any problem with the government’s policy, the parliamentary system should be used to address and settle it,” he said.

Share your thoughts

Discussion 1 : 03/10/2012 at 06:11 AM
Discussion 10 brilliant : "there's another 100 billion baht lost to corruption as with the first time." Should there is any concrete evidence establishing a corruption being involved in the rice pledge scheme, dems or PADs had already filed a complaint to NACC or DSI for investigation a long time ago. Don't jump to your presumption so soon before getting the facts.
Discussion 2 : 03/10/2012 at 06:08 AM
Englishjon : I understand that your reply is that you don't know, and your understanding of the EU subsidy system is wrong, it is in place to ensure minimum prices for farmers as they else would go out of business ... and since EU emphasize that agriculture is essential to the community then they are willing to pay the price and that is where the comparison comes in , Rice farming is essential to Thailand and is willing to pay for this. There has always been a stockpile of rice and Thailand is obliged to have a stockpile in case the harvest should fail, and latest it has also an obligation to ASEAN to keep a certain stockpile. EU holds stockpiles of a lot of different products (meat as well as farm products) as well, and so do other regions that farm....farming cannot be run like a JIT car factory. Englishbob : Ok I see your answer, I believe in the free market as well , however basically the whole world is embracing subsidies for farming, because they think or decided it makes sense, and that seem to be the case for Thailand as well. The success of the government you can follow in the news daily.
Discussion 3 : 03/10/2012 at 02:01 AM
Khun Jwatch #7, all economic development models I know call for transferring labor from low-paying farming sector into higher-paying industrial one. The Europeans, the Americans, the Japanese, the South Koreans, the Malaysians, and etc, all are successful in improving the standard of living for their people using this proven development model. For example, prior to WWII, 95% of US population was in farming, today only 5% remain farmers, but their farming output is greater than ever through modern farming methods. A nation full of farmers can't prosper, no matter how hard we try. It's just the economic fact of life!
Discussion 4 : 02/10/2012 at 11:20 PM
Can some explain how this all works 1) The government buys rice above market rate and store it (laudable thing giving the poor rice farmer more money if he actually receives it but that’s another issue) 2) The government now has a stoke pile of rice it’s paid over the odds for 3) Where does the government now sell this rice for a profit? Now if the price paid is less than the international price then its export for profit if not why would other countries pay more for rice when they can get it elsewhere cheaper? Q wouldn’t it be better policy to start the farmers growing products with higher market prices and are exportable (I know that’s a bit simplistic assuming the land can support diversified crops)
Discussion 5 : 02/10/2012 at 10:44 PM
Its bad enough that taxpayers have to pay for the governemnt to buy the rice crop at twice what its worth putting the county in debt more and more .Couldnt they at least give the rice to poor countries in Africa instead of letting it rot in a warehouse because they dont want the public to see .
Discussion 6 : 02/10/2012 at 10:25 PM
englishbob D9 What you and I consider successful government policies is besides the point, it is what Thai voters think that is important. At Asian Correspondent, Bangkok Pundit has a detailed report and analysis of the latest Suan Dusit poll which shows that respondents give the government a rating of about 6 out of ten, they single out as "outstanding", drug suppression - international affairs - wages - pensions - electricity and water discounts. That would probably be the reason why Forbes magazine last week described Yingluck's government as "surprisingly popular".
Discussion 7 : 02/10/2012 at 09:46 PM
The figures do not add up neither do the two opposing statements one say the farmers are not happy and have not had payment the other is the total opposite.It would be very easy to find the truth about payment. The situation ref the amount of rice Kicking about is not that difficult either.To see some accounts must be every tax payers entitlement they have put up the money.If the government has nothing to hide the accounts should not pose a problem.If the do not produce accounts for scrutiny then there is only one conclusion you can come to!
Discussion 8 : 02/10/2012 at 09:30 PM
The only thing that is transparent in Thailand is a Thai's skin. This country is going backwards at an incredibly fast pace. Soon it will be no better than Laos, Cambodia or Burma. Hey Dubai, Wake Up.
Discussion 9 : 02/10/2012 at 09:17 PM
Disc#4: khunbj I suggest you get back onto google and read a little more about the EU common agricultural policy. Then come back and tell us in what way it compares to this farce created by PT as a way to siphon off taxpayers money to their middle-management buffalo herders in the North East. For a start, the EU grants go directly to farmers instead of being creamed off at the expense of the poor like with the rice scheme. Second the policy is aimed at promoting the growth of crops which would be otherwise uneconomical for the farmers compared to the basic crops like wheat. I look forward to your comparisons.
Discussion 10 : 02/10/2012 at 09:00 PM
Well, there's another 100 billion baht lost to corruption as with the first time. This is sickening. bystander is completely correct - if the tax payers are going to foot this bill, they should demand information on every aspect of this "scheme".
Discussion 11 : 02/10/2012 at 08:19 PM
Disc4 KhunBJ - I HAVE answered your question. I told you that EU subsidies under CAP are set for many different and complicated reasons... And I don't agree with any of them. Subsidies adversely effect market forces and cause hardship elsewhere. And this government? As far as I can see, it has achieved nothing in 14 months. Correct me if I'm wrong by naming three PT policies that have been successful.
Discussion 12 : 02/10/2012 at 08:13 PM
"He had visited farmers in Sukhothai and they complained bitterly that they were not paid the declared mortgage prices." According to the two large surveys conducted by the University of the Thai Chamber of Commerce in July and August, 98.7% of farmers received the money within 10 days.
Discussion 13 : 02/10/2012 at 08:11 PM
Why are you guys against this? This is the best policy ever...my tax money is really being put to good use. So what if it bankrupts the country?
Discussion 14 : 02/10/2012 at 08:02 PM
How many mass transit lines and upgraded railways could be built for this money, projects that would bring huge benefits to Thailand?
Discussion 15 : 02/10/2012 at 07:30 PM
TRANSPARENCY, people, TRANSPARENCY! Graft people graft !
Discussion 16 : 02/10/2012 at 07:06 PM
As far as I remember then Thailand makes 22 mill ton rice, own consumption is 10 mill tons and exports around 8 mill ton, that makes a stockpile of 4 mill tons .... BP please investigate the numbers instead on just reporting no's that people from all sides seem to be making up, of course it is possible to find out what the stock pile is, a bit of investigation is all it takes. @englishbob , wish that one day you will accept that everybody do not share your views and try to use a bit of common sense instead of constantly defending everything that attacks the government .......and do not forget that you do not have monopoly on the truth....you still owe me an explanation on why the UK farmers need 200 bn THB/year from the EU to stay in business, why don't they just improve productivity ?.
Discussion 17 : 02/10/2012 at 06:27 PM
Would it be too much to ask for a monthly report be published that showed: 1. How much rice is in storage and where. 2. How much has been sold from where and to whom and for what price. 3. How much has bee mortgaged by whom and to where. TRANSPARENCY, people, TRANSPARENCY!
Discussion 18 : 02/10/2012 at 06:15 PM
Looking forward to hear the academics answers to the farmers legitimate questions , please get their answers BP.
Discussion 19 : 02/10/2012 at 06:14 PM
I wish I was surprised by the simplistic, naive and threatening language of the farmers association. But I'm not. The ONLY people defending this ridiculous scheme are PT MPs, middlemen and farmers - ie people who are reaping financial benefits from it. The scheme dissuades farmers from improving productivity or forming co-operatives since there is no incentive to do so - why work harder when being overpaid is guaranteed? To drag allegiance to Peua Thai or Military Govts into the fray is a warning that Red Shirt Guards will be watching NIDA from now on.

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