Rice scheme officials risk court

Officials who implement the government's controversial rice pledging scheme could be damaging the country and risk being taken to court, a senior economist from the Thailand Development and Research Institute (TDRI) has warned.

Published: 10/10/2012 at 12:00 AM
Writer: Post Reporters

Nipon Puapongsakorn, former president of the TDRI and now a distinguished fellow at the institute, compared the case to that of the former governor of the Bank of Thailand, Rerngchai Marakanond, who was fined 185.95 billion baht in 2005 for approving currency transactions that led to the loss of billions of baht in national reserves before the 1997 economic crisis.

The Appeal Court overturned the lower court ruling last year, though the central bank has since lodged an appeal with the Supreme Court.

Mr Nipon's warning came as the Constitution Court is today due to consider a petition by academics and students from Thammasat University and the National Institute of Development Administration (Nida) calling on the government to halt the controversial pledging programme.

The petition claims the rice pledging scheme is a breach of the constitution as it causes market distortions and disrupts normal trading practices.

Mr Nipon said the pledging scheme has wasted taxpayer money and destroyed the market price mechanism.

The government plans to spend as much as 405 billion baht for the 2012-13 harvest season to cover 34 million tonnes of paddy.

Prime Minister Yingluck Shinawatra insisted that the programme is meant to help farmers.

Mr Nipon, however, argued that the rice pledging scheme provides no benefits to poor farmers at all.

"In fact, this policy has already caused poor, landless farmers to shoulder higher costs of production because farmland owners have doubled the rents [due to high mortgage prices]," he said.

Since the pledged prices offered by the government are higher than market prices, farmers are unlikely to redeem their rice. The pledged rice thus becomes a commodity that rice millers or politicians can make profit from without being held to account.

These practices have led to corruption in the scheme and destroyed the rice trading mechanism, Mr Nipon said.

"We are destroying our own market. Politicians are duty-bound to help the people, not to help any particular groups," he said.

Mr Nipon also took aim at the government's failure to provide information about its claimed exports of pledged rice in government-to-government (G-to-G) deals.

Commerce Minister Boonsong Teriyapirom earlier announced that the ministry received purchase orders for 7.3 million tonnes of milled rice from China, Bangladesh, Indonesia and Ivory Coast under G-to-G agreements.

Rice traders, however, questioned if such deals exist, as there has been no shipping activity or export records.

Chukiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, said the G-to-G export figures from early this year have not even reached one million tonnes.

"China has imported 1.5 million tonnes of white rice, but from India, where the rice is about US$100 cheaper than ours," Mr Chukiat said.

Commerce Minister Boonsong, however, said he was unable to reveal details of the G-to-G deals, saying it could affect foreign relations. He said export records have not shown up because the rice has not yet been exported.

Prime Minister Yingluck Shinawatra yesterday insisted G-to-G rice agreements had been reached with several Asean countries. She said there are six such agreements with about 8 million tonnes of pledged rice sold.

She said the rice pledging scheme will conclude by the end of next year and she will then disclose the full figures.

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Discussion 1 : 10/10/2012 at 09:35 PM: Discussion 19 - FYI the CC dropped the case. If the AG had of got it initially it would have had the same fate. It's about protocol not about the PTP.
Discussion 2 : 10/10/2012 at 08:37 PM: I'm sure the petition will be refiled with the necessary legal corrections and procedure. Thank God this wasn't the reds that had filed the petition as there would now be death threats, burned effigies and riots. Perhaps reds can take note that when a legal ruling doesn't go your way there are legal ways to deal with it and then the immature red way.
Discussion 3 : 10/10/2012 at 04:52 PM: bluebkk D17 The present AG was appointed by the Democrat government, did they pick the wrong man?
Discussion 4 : 10/10/2012 at 02:57 PM: Let us face facts some of the big growing organisations must be doing very nicely thank you from the scheme and we know some millers are but the little guy who the scheme was supposed to help appears to be loosing out. Among all this the government just plows on regardless.
Discussion 5 : 10/10/2012 at 02:46 PM: When you don't get a verdict of your liking, the same old accusations will always surfaced. Blame the AG, DSI and possibly now the CC to be bias. Throw in vote buying if speaking about election. Then it's the Reds that ran in front of the bullets. Never rationale and always spinning.
Discussion 6 : 10/10/2012 at 12:57 PM: D10@ricefield - enligthen me - where does it say that all petitions to the Constitutional court must go through the A-G office?
Discussion 7 : 10/10/2012 at 12:56 PM: I think the Court won't overstep its legal bound here. Sure, the rice pledging scheme is anti-free market, disrupting price mechanism, and most likely resulting in heavy financial losses for the taxpayers, however, in Democracy, the Majority rules within the Rules of Law. So, what the Court can do is to make sure that all necessary legal procedures are followed with no irregularities (corruptions). Only, after the heavy financial loss materializes as predicted, enough of those in the majority will be persuaded that the scheme is a really bad idea, and would not support it again in the future. If you want Democracy, this is IT!
Discussion 8 : 10/10/2012 at 12:25 PM: ricefield, Your concern for the Constitutional Court's workload is admirable. Any thoughts on the suspected massive graft in the rice pledging scheme and how it doesn't benefit farmers while causing damage to the country?
Discussion 9 : 10/10/2012 at 12:11 PM: ricey, pls quit trying to convince us that the AG will ever take this PT government to court!!! That's the reason anyone taking action against PT has to go directly to the CC.
Discussion 10 : 10/10/2012 at 11:58 AM: D15 - Because the PTP have already admitted that telling white lies is OK when beneficial. So no one will believe the words that come out of their mouths if it is not backed up by facts & figures. Ultimately how difficult is it for the PTP to produce numbers and dates of shipments, how difficult is it for them to produce copies of the agreements if shipping is future dated, how difficult is it to show the math (x tons sold x y baht per ton = z; z - scheme payments = loss or profit)? The mere fact that they refuse to release facts & figures leads one to only one conclusion ... more white lies.
Discussion 11 : 10/10/2012 at 11:40 AM: Discussion 16....Every right minded , law abiding,Thai citizen can clearly see AG, as well as DSI are 100 % " Married to this PT/UDD Government" and honestly...who would have 1 % trust in that lethal combination????
Discussion 12 : 10/10/2012 at 09:33 AM: Disc 10 _ No, all petitions to the Constitutional Court have gone through the Attorney general's office for assessment until the CC decided otherwise about a month ago. This will lead to a flood of improper petitions raising the workload of the CC. The AG would have returned the petition the first time from this group because it was not in the proper form and the CC wouldn't have had to wade through it and then return it as being unsuitable.
Discussion 13 : 10/10/2012 at 09:09 AM: It seems to me that a ton of rice let alone a million tons, is not able to be teleported. Rather it needs loaders, trucks, cranes, ships etc., all of these are manned and operated by people. Now unless all these people are involved in some vast conspiracy of silence then it seems to me any half competent journalist could soon find out what rice has moved, and how much and where to. So why all the demand for documentary proof, after all you can fake a document but you can't easily fake a truckload of rice.
Discussion 14 : 10/10/2012 at 08:35 AM: D12 well said, what a way to vote buy with gov money and who in there right mined would pay more for something than you can sell it for
Discussion 15 : 10/10/2012 at 08:09 AM: Eric - "I also wonder why this group of academics did not made any noise when the Demo rice insurance scheme also wasted tax payers money." There's tons of substantiation of graft in this scheme, can you provide links substantiating the graft under the Dems, please.
Discussion 16 : 10/10/2012 at 07:48 AM: D8@mittrapaap. There have been a number of suggestions, including by these academics. For example to limit the number of tonnes that can be pledged to 25 tonnes per farmer (so you target the bottom of the food chain) and to bring the pledge price much nearer to the market price to avoid distortions. I think if you did both the damage from this scheme would be reduced. BTW if this scheme truly helped farmers there is no way it will stop at the end of two years, as the PM suggests, when another election is in sight. If it was truly effective in raising farmer's incomes PT would not risk the voter backlash of stopping
Discussion 17 : 10/10/2012 at 07:35 AM: For anti government posters, don't place your hope too high that the CC will accept the case. CC only have jurisdiction over the constitutionality of Parliment acts and this rice scheme is not a parliamentary act but a cabinet decision. Moreover there is no precedent and the plaintiffs (farmers) do not want the academics to represent them. The case is weak. I also wonder why this group of academics did not made any noise when the Demo rice insurance scheme also wasted tax payers money.
Discussion 18 : 10/10/2012 at 07:34 AM: D3@ricefield I believe the A-G issue only relates to S68 which is to do with preventing the overthrow of the Constitution. S.212 allows for direct submission to the Court - there is no mention of the need to proceed via A-G office. I believe it is this section which covers the plaintiffs application in this case
Discussion 19 : 10/10/2012 at 07:19 AM: Hey, what do academics know about rice farming will be the cry from red shirts. Well, my answer is, what do farmers know about economics(or this government for that matter). A true, accurate, transparent accounting of the money is the minimum needed, but not a year after the fact. What a shame, or sham, or both.
Discussion 20 : 10/10/2012 at 07:18 AM: While I see only different groups blaming the scheme and attacking it (which I fully understand), I see nobody coming up with an alternative showing how it could be done better. Or do the newspapers just not report about that part?
Discussion 21 : 10/10/2012 at 06:54 AM: It looks like the 'poor', the 'disadvantaged' etc will continue to be bullied and even the law are against them.
Discussion 22 : 10/10/2012 at 06:40 AM: Once again, our red members would rather discuss if the "I" has been dotted and the "T" crossed as opposed to the incorrigible behavior in question.
Discussion 23 : 10/10/2012 at 06:08 AM: "She said the rice pledging scheme will conclude by the end of next year and she will then disclose the full figures." That is a little bit to late now, is it not. The damage will have already be done. My question is : What do you have to hide? If the numbers work out everybody will support the scheme and be happy. The government is not supposed to play games of poker or cat and mouse. The actions of the government should be transparent.
Discussion 24 : 10/10/2012 at 05:40 AM: As I commented yesterday 'you reap what you sow' If you can't stop those who implement the scheme from rorting it what hope have you got.
Discussion 25 : 10/10/2012 at 05:22 AM: This is a primer example of the Constitutional court allowing one group to circumvent the Attorney General's department, and now everyone is circumventing the proper channel for submitting a petition to the Constitutional Court.
Discussion 26 : 10/10/2012 at 05:03 AM: Just as Kittirat believed he had the right to lie to the parliament and the people of Thailand about export figures these government representatives will tell whatever "white lies" they need to to justify and protect this little earner. What a gem, those at the top of the food chain will stuff their wallets while the poor farmers believe they are being looked after by the patrone and pass on their gratitude as they struggle to exist on peanuts. The bar for duplicity has been lowered so that even the fattest pigs can scramble over.
Discussion 27 : 10/10/2012 at 02:32 AM: Excellent article! I can't wait to read the comments from "the usual PTP/UDD suspects" on this one. Let me guess...Khun Nipon is not our father? He doesn't know what his talking about? He's a democrat? It's a conspiracy?

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