Paddy Subsidy A One-Year Trial In Thailand

[webfact]

RICE-PLEDGING

Paddy subsidy a one-year trial

By PETCHANET PRATRUANGKRAI

THE NATION

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

There are now plans to begin the pledging scheme on October 7. Its first effect will be to jack up domestic prices for rice by about 25 per cent and lift the export price for white rice to more than US$750 or $800 (Bt22,486 or Bt23,993) per tonne, increasing the burden on rice consumers both locally and overseas.

At a meeting with farmers, millers, exporters and related government agencies yesterday, the commerce minister said the pledging project would be on trial for a year, to see whether it would drive up rice prices.

"If the market does not respond, the government will encourage farmers to reduce farmland [planted to rice] and shift to growing other economic crops," Kittiratt said.

The National Rice Policy Committee will soon meet to decide whether to implement the pledging scheme on October 7. There has been pressure from farmers for the launch of the programme before its original schedule in November.

Under the government's plan, there will be no limit on the volume of rice qualifying for the pledging scheme. The country's main harvest, which usually occurs in November, is expected to produce 8 million tonnes of paddy, or unhusked, rice. The pledging price will be Bt20,000 per tonne for paddy jasmine rice and Bt15,000 for paddy white rice.

Thai Rice Exporters' Association honorary president Vichai Sriprasert said it was very difficult to figure out how overseas buyers would respond to a sharp increase in the price of Thai rice. If they fail to respond, the government will face huge problems stocking large amounts of rice, as exports will fall substantially.

Export prices for Thai rice will surge continuously when the pledging scheme is operating, to more than $700 or $800 per tonne for white rice.

Vichai said consumers and buyers were not the only ones facing a higher burden. Exporters will be in trouble simply for being in the business.

He said the government must ensure that its rice-releasing procedure was transparent and fair, so every trader could join in the bidding.

Thai Rice Packers' Association president Somkiat Makcayathorn said domestic prices would increase by 25 per cent immediately after the pledging scheme began.

The price of jasmine rice will be Bt40 to Bt50 higher per five-kilogram pack, above the present price of Bt180 to Bt200, while the retail price of white rice will increase by Bt20 to Bt30 per pack from Bt120 to Bt130.

However, he said if exports were seriously damaged by the scheme's reintroduction, domestic prices might not rise significantly because of low demand from exporters.

Thai Rice Exporters' Association president Korbsook Iamsuri said rice prices would increase gradually in response to the hiking of prices in Thailand.

She worried that some rice-importing countries would shift to purchase their rice from other countries, as Thai prices would be too high compared with other staples.

Korbsook said small exporters would be the first to suffer from the higher rice prices as they would be unable to purchase rice from the market by competing with the government.

She urged the government to provide soft loans and create new marketing and promotion plans to ensure the growth of Thai rice exports.

Thai Rice Millers' Association vice president Banjong Tangjitwattanakul said the pledging scheme would drive the export price of white rice to $750 a tonne, while the price of jasmine rice would reach $1,200 to $1,300 a tonne.

The export price of 100-per-cent white rice is currently quoted at $563 a tonne, and that for jasmine rice is $1,092 a tonne.

-- The Nation 2011-09-02

[whybother]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

[apetley]

An unsustainable policy and I think that the penny has finally dropped hence the backtracking.

In our area there has been a phenomenal incraese in the amount of rice planted as all the farmers are under the impression that they are all going to get substantially more for their product.

Sadly I think many will be disappointed.

[siampolee]

Wonderful policy from the P.T.P. to actually increase the cost of the basic staple food of the people.

Look out North Korea brother no.1, his family and his acolytes are going to be competing with you to establish a despotic family tyranny regime.

Was Pol Pot such a powerful influence upon Thaksin one is inclined to ask?

Edited September 2, 2011 by siampolee

[backtonormal]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

[whybother]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

I hear what you're saying, but it doesn't seem like it would affect the rice barons. They will get the same profits if the market price increases.

If you're suggesting that they will need to reduce their margins to compete on the export market, will that mean that Thais will pay more for rice than their neighbors?

[Buchholz]

An unsustainable policy and I think that the penny has finally dropped hence the backtracking.

In our area there has been a phenomenal incraese in the amount of rice planted as all the farmers are under the impression that they are all going to get substantially more for their product.

Sadly I think many will be disappointed.

Throw yet another Pheu Thai Party policy on the trash heap.

I think quite a lot will be disappointed as each promise falls by the wayside, one by one by one.

.

[Buchholz]

Wonderful policy from the P.T.P. to actually increase the cost of the basic staple food of the people.

Look out North Korea brother no.1, his family and his acolytes are going to be competing with you to establish a despotic family tyranny regime.

Was Pol Pot such a powerful influence upon Thaksin one is inclined to ask?

Ferdinand Marcos is a more exacting match.

Hugely popular and democratically-elected in the beginning.

Turned despotic dictator.

Stole billions.

Ended up ruling with an iron fist for over 20 years.

.

[Crushdepth]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

Scrapping another key election promise? Thanks for voting, suckers!!!

[scorecard]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

Agree, the share of the rice income is way off balance and certainly unfair, totally true, and disgraceful.

But do you really think this pt government has any intent to forcably make the rich barons share more?

T and his ilk (the rich of Thailand) look after themselves first and have no intention whatever of changing the share ratio.

T may well be very powerful but there are people (rice barons included - deliberately keeping a low profile) who T cannot and would not dare to try to control.

T is not a socialist - what has he really done to, by macro policy and laws regulations coming from that policy, to gain a different sharing of the wealth of Thailand so that more Thai's have a decent quality of life? Nothing!

Is he was a socialist he would have shared his massive windfall with some of the poor, he's made big announcements before about scholarships etc, but in reality nothing whatever has eventuated.

Edited September 2, 2011 by scorecard

[scorecard]

Another pt election promise falling apart before it's even implemented.

[otherstuff1957]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

If they are really serious about this, perhaps they should nationalize the rice wholesaling industry?

While this would be a radical step, there are precedents. After all, rice is Thailand's most strategic export, as well as being of growing importance to the Thai and global economy. If the price is rice is already being manipulated, why not have the government manipulate it for the benefit of all, rather than let a small number of people manipulate it for their own benefit?

[Buchholz]

Another pt election promise falling apart before it's even implemented.

It goes along with the other policy "modification" announced yesterday. It, too, is only slotted for one-year like the rice paddy subsidy.

First-car tax cut program likely to be launched on 1 Oct

BANGKOK, 1 September 2011 (NNT) – The Ministry of Finance expects the policy to reduce tax for first-time car buyers to be implemented on 1 October, sooner than the first-home tax cut policy, of which details are yet to be concluded.

Deputy Finance Minister Boonsong Teriyapirom stated that the Finance Ministry had assigned the Revenue and the Excise Departments to hastily work out conditions of the tax reduction policies for people buying houses and cars for the first time. The policies are to be completed within next week and will be presented to the Cabinet for consideration in the following week.

The Deputy Minister voiced belief that the first-car policy would be implemented first, expectantly on 1 October, adding that it would be in effect for one year.

http://thainews.prd.go.th/en/news.php?id=255409010015

[whybother]

Another pt election promise falling apart before it's even implemented.

It goes along with the other policy "modification" announced yesterday. It, too, is only slotted for one-year like the rice paddy subsidy.

First-car tax cut program likely to be launched on 1 Oct

http://thainews.prd....id=255409010015

The difference being that the "First-car tax cut" is a tax deduction, so it's only for people that pay enough tax to actually get the deduction.

[hanuman2543]

We will see a big rise in smuggling rice from neighbouring countries and the normal farmers will have two choices: accept lower prices from millers or eat their rice themselves. The economic strategies of this government are .

Edited September 2, 2011 by hanuman2543

[hanuman1]

Scanning the headline, I thought this was about an Irishman who had just been arraigned.

Edited September 2, 2011 by hanuman1

[OzMick]

Exactly how are they going to encourage farmer's to reduce rice plantings when by artificially increasing price they are doing exactly the opposite?

As the sole purpose of the scheme is to buy votes, perhaps they could restrict it to card-carrying members of the party.

[lannarebirth]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

Scrapping another key election promise? Thanks for voting, suckers!!!

I think global prices are sufficient this year that the govt may not get hit too hard on this scheme this year. I think they've got some time to figure out how to unwind it.

[Colin Yai]

An unsustainable policy and I think that the penny has finally dropped hence the backtracking.

In our area there has been a phenomenal incraese in the amount of rice planted as all the farmers are under the impression that they are all going to get substantially more for their product.

Sadly I think many will be disappointed.

Throw yet another Pheu Thai Party policy on the trash heap.

I think quite a lot will be disappointed as each promise falls by the wayside, one by one by one.

.

Yeah Buchholz ,I think its called the "domino effect" in lay mans lingo.!

[Colin Yai]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

Scrapping another key election promise? Thanks for voting, suckers!!!

I think global prices are sufficient this year that the govt may not get hit too hard on this scheme this year. I think they've got some time to figure out how to unwind it.

"Too late" was the cry , the Genie is well and truly out of the bottle , they are now committed , the outcome of this extreme folly will finish up with Embarrassing excuses by PTP and tears all round for the consumer!.

[Colin Yai]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

If they are really serious about this, perhaps they should nationalize the rice wholesaling industry?

While this would be a radical step, there are precedents. After all, rice is Thailand's most strategic export, as well as being of growing importance to the Thai and global economy. If the price is rice is already being manipulated, why not have the government manipulate it for the benefit of all, rather than let a small number of people manipulate it for their own benefit?

Great idea, nationalize the rice industry with the Shinawatra "family" in charge of its running , I am sure everything will run like clockwork being that Thaksin is a man of the people for the people.

[GazR]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

The Abhisit government's policy of making support payments directly to farmers instead of to rich middlemen was shown to be far superior in a Bangkok Post comparison a few months ago.

Probably the best we can hope for is the reintroduction/continuation of Abhisit's policy following some cosmetic changes and rebranding by the current government.

[webfact]

Rice Pledging Scheme to Kick Off in October

The Commerce Ministry is set to kick off its rice pledging scheme on October 7.

Deputy Prime Minister and Commerce Minister Kittirat Na Ranong spent over two hours working on creating a better understanding of the rice pledging scheme for in-season paddy among representatives of the Thai Rice Farmers Association, the Thai Rice Millers Association, packaged rice producers, and rice exporters.

Chairman of the Thai Rice Millers Association Chanchai Raksatananon said the Commerce Ministry will start buying rice from farmers on October 7, with no amount limit.

The scheme will be launched much sooner than expected.

Under the scheme, the government will purchase jasmine rice at 20,000 baht a ton and white rice at 15,000 baht per ton.

Chanchai noted that rice farmers are now in the process of harvesting their crops while ensuring the readiness of rice millers nationwide.

The meeting also allowed rice pledging to be done among nearby provinces.

The Thai Rice Millers Association chairman added that more details about the scheme are expected next week after the meeting of the National Rice Policy Committee chaired by Prime Minister Yingluck Shinawatra.

In the meantime, Sumet Laomoraporn, CP Intertrade's managing director, admitted that the scheme lead packaged rice producers to increase their product prices to reflect their higher production costs.

He said rice prices in the market have already gone up even before the scheme takes effect.

Sumet expects the total production for this year's off-season rice, which will enter the market in a couple of months, will stand at 3.5 million tons.

However, he believes the scheme will help farmers earn more income and will reduce social inequality.

Meanwhile, Thai Rice Packers Association President Somkiat Makayatorn said the government's pledging scheme will result in higher prices for packaged rice, especially for jasmine rice, the price of which is expected to increase by 40 baht per package, or about 25 per cent for a five-kilogram package.

The production cost of white rice of a 5-kilogram package is also forecast to rise 40 to 50 percent, or 20 to 30 baht per kilogram.

The new prices are expected to take effect in October.

Earlier, directing manager of the Bank for Agriculture and Agricultural Cooperatives or BAAC, Luck Wajananawat disclosed that the bank's executive board agreed with the Commerce Ministry's idea to raise funds of about 290 billion baht through three measures to run the rice pledging scheme.

The first measure is to use 90 billion baht allocated by the BAAC. This money is expected to buy 5 to 6 million tons of rice.

The second measure is to assign the Public Debt Management Office to seek lending sources to provide 100 billion baht in loans.

The third measure is to consider the possibility of issuing five-to-six-year government bonds to refinance its debts borrowed from the BAAC.

-- Tan Network 2011-09-02

[thaicbr]

The new government's populist rice-pledging scheme will be a short-lived subsidy lasting only one year if it fails to influence market prices for rice, Deputy Prime Minister and Commerce Minister Kittiratt Na-Ranong said yesterday.

In the case of an unsatisfactory price outcome, the government will seriously consider reducing the area planted with rice as an alternative mechanism to increase prices.

Am I reading this right?

The government are trying to force the price of rice to increase?

No wonder they want increase wages. No one's going to be able to afford to eat.

The government is trying to squeeze the 30 or so rice families who have kept most of the nations farmers poor for decades. There is enough profit margin in the price the exporter buys and then sells for. The mark up for the farmer will not effect the Thai rice price greatly, the rice families who export all the rice will have to reduce their profit to compete. Previously these families retained their profit margins by reducing, at will, the price to the farmer. It is likely the rice barons also own all the mills and do all the exporting. These rice families are big part of the reason that all Thai farmer are poor.

Do you have the names of these 'rice families'?

[swifty5x5]

Do you have the names of these 'rice families'?

Mr. and Mrs. Rice and the little Rices.

[peterdk]

Rice Pledging Scheme to Kick Off in October

The Commerce Ministry is set to kick off its rice pledging scheme on October 7.

Deputy Prime Minister and Commerce Minister Kittirat Na Ranong spent over two hours working on creating a better understanding of the rice pledging scheme for in-season paddy among representatives of the Thai Rice Farmers Association, the Thai Rice Millers Association, packaged rice producers, and rice exporters.

Chairman of the Thai Rice Millers Association Chanchai Raksatananon said the Commerce Ministry will start buying rice from farmers on October 7, with no amount limit.

The scheme will be launched much sooner than expected.

Under the scheme, the government will purchase jasmine rice at 20,000 baht a ton and white rice at 15,000 baht per ton.

Chanchai noted that rice farmers are now in the process of harvesting their crops while ensuring the readiness of rice millers nationwide.

The meeting also allowed rice pledging to be done among nearby provinces.

The Thai Rice Millers Association chairman added that more details about the scheme are expected next week after the meeting of the National Rice Policy Committee chaired by Prime Minister Yingluck Shinawatra.

In the meantime, Sumet Laomoraporn, CP Intertrade's managing director, admitted that the scheme lead packaged rice producers to increase their product prices to reflect their higher production costs.

He said rice prices in the market have already gone up even before the scheme takes effect.

Sumet expects the total production for this year's off-season rice, which will enter the market in a couple of months, will stand at 3.5 million tons.

However, he believes the scheme will help farmers earn more income and will reduce social inequality.

Meanwhile, Thai Rice Packers Association President Somkiat Makayatorn said the government's pledging scheme will result in higher prices for packaged rice, especially for jasmine rice, the price of which is expected to increase by 40 baht per package, or about 25 per cent for a five-kilogram package.

The production cost of white rice of a 5-kilogram package is also forecast to rise 40 to 50 percent, or 20 to 30 baht per kilogram.

The new prices are expected to take effect in October.

Earlier, directing manager of the Bank for Agriculture and Agricultural Cooperatives or BAAC, Luck Wajananawat disclosed that the bank's executive board agreed with the Commerce Ministry's idea to raise funds of about 290 billion baht through three measures to run the rice pledging scheme.

The first measure is to use 90 billion baht allocated by the BAAC. This money is expected to buy 5 to 6 million tons of rice.

The second measure is to assign the Public Debt Management Office to seek lending sources to provide 100 billion baht in loans.

The third measure is to consider the possibility of issuing five-to-six-year government bonds to refinance its debts borrowed from the BAAC.

-- Tan Network 2011-09-02

A fourth measure could be to sell some of the rice purchased !

Edited September 2, 2011 by peterdk

[peterdk]

290 billion baht ~ 10 billion dollars US.

Do I read it correctly as they expect to loose that amount of money - by paying the farmers a higher price ?

Would it not make sense to raise the export price accordingly and have no loss ?

I'd imagine it can be done - a few phone calls to the organization of Rice Exporting Countries (OREC)

And Thailand already sits on a nifty 33% or so of the total rice exported anyway.

So Thailand would easily be able to affect the worldwide price, just by not exporting unless they get what price they want.

And prices would go up automatically as demand suddenly was a lot higher than supply.

But arguably holding the world hostage for food - unless the world pays up - well that could be a political minefield that the current government may not want to set foot in.

[Crushdepth]

And not an apologist in sight...

[edwinchester]

And not an apologist in sight...

Next to impossible to defend the indefensible.

[GazR]

290 billion baht ~ 10 billion dollars US.

Do I read it correctly as they expect to loose that amount of money - by paying the farmers a higher price ?

Would it not make sense to raise the export price accordingly and have no loss ?

I'd imagine it can be done - a few phone calls to the organization of Rice Exporting Countries (OREC)

And Thailand already sits on a nifty 33% or so of the total rice exported anyway.

So Thailand would easily be able to affect the worldwide price, just by not exporting unless they get what price they want.

And prices would go up automatically as demand suddenly was a lot higher than supply.

But arguably holding the world hostage for food - unless the world pays up - well that could be a political minefield that the current government may not want to set foot in.

Fearless Prediction: If Big Brother continues on this course, it will all end in tears for Little Sister.