You Will Be Held Responsible For Huge Loss, Pridiyathorn Warns Thai Ministers

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EXCLUSIVE INTERVIEW

You will be held responsible for huge loss, Pridiyathorn warns ministers

By Achara Pongvutitham

The Nation

Former Finance Minister MR Pridiyathorn Devakula has warned Commerce Minister Kittiratt na Ranong and Finance Minister Thirachai Phuvanatnaranubala they would be chiefly held accountable for a potential staggering loss of Bt250 billion to the country if the rice mortgage scheme is implemented.

"I believe that those who have pushed for the rice mortgage scheme are heavyweights within the Pheu Thai Party. Since they can't hold political office, they are using the two ministers as scapegoats for the rice mortgage scheme that quotes the mortgaged rice price at unrealistically high levels," said Pridiyathorn to a group of reporters.

"I am confident that the two ministers have a conscience of good and bad. I do hope that my comments will help you see it more clearly that the big shots within the party are using you to pursue a policy that would create damage to the country."

A banker by career, the outspoken Pridiyathorn served as deputy commerce minister during the Anand government. He was governor of the Bank of Thailand during the Thaksin government. After the 2006 military coup, Pridiyathorn was appointed as deputy prime minister and finance minister in the Surayud government.

The rice mortgage scheme is a key populist policy of the Yingluck government, setting out to guarantee farmers Bt20,000 per tonne for jasmine paddy and Bt15,000 per tonne for white rice.

Although the scheme does not involve the state budget directly, it involves the Bank for Agriculture and Agricultural Cooperatives, amounting to more than Bt400 billion. The scheme will be launched from October 7 till February 29, 2012.

The government plans to extend it for another month to the end of March next year.

Pridiyathorn also sent a direct message to Thirachai, saying that as chairman of the Bank for Agriculture and Agricultural Cooperatives he should be aware of the unrealistically high prices of the mortgaged scheme and the gigantic volume of paddy that involves. This scheme, Pridiyathorn said, was likely to result in a loss to the government of Bt250 billion. The Bank for Agriculture and Agricultural Cooperatives will eventually have to seek compensation from the government to offset the Bt250 billion loss from its involvement in the mortgage scheme.

Pridiyathorn said Thirachai would be vulnerable to criminal charges later if the rice mortgage scheme created losses to the state budget because he was aware the scheme would suffer losses in the first place. "I would like to specifically warn him about this (potential criminal charge)," he said.

He urged the government to ignore the rice mortgage subsidy and to use other means and appropriate prices to avoid a huge loss. It should also ensure that farmers really gain.

Pridiyathorn stressed that he had suffered while closely monitoring the programme and studying 'immoral politicians' pushing a project that would eventually create the country's biggest ever loss. The price mortgage policy would create more corruption when the government had to manage a huge stockpile - a lesson they had learnt many times.

-- The Nation 2011-09-26

[siampolee]

Former Finance Minister MR Pridiyathorn Devakula has warned Commerce Minister Kittiratt na Ranong and Finance Minister Thirachai Phuvanatnaranubala they would be chiefly held accountable for a potential staggering loss of Bt250 billion to the country if the rice mortgage scheme is implemented.

Pridiyathorn stressed that he had suffered while closely monitoring the programme and studying 'immoral politicians' pushing a project that would eventually create the country's biggest ever loss. The price mortgage policy would create more corruption when the government had to manage a huge stockpile - a lesson they had learnt many times.

Indeed the policy is somewhat flawed to say the least,however let'sbe a little more realistic about the cost.

It won't be the politicians who will bear the brunt of the loss as they are cushioned by their safety fence of "investments."

It will be the ordinary people who will finance this inane scam scheme by virtue of high prices for that staple food supply (rice) along with no doubt increased taxation to recoup the financial losses incurred by their elected (?) masters.

Edited September 26, 2011 by siampolee

[MILT]

Former Finance Minister MR Pridiyathorn Devakula has warned Commerce Minister Kittiratt na Ranong and Finance Minister Thirachai Phuvanatnaranubala they would be chiefly held accountable for a potential staggering loss of Bt250 billion to the country if the rice mortgage scheme is implemented.

Pridiyathorn stressed that he had suffered while closely monitoring the programme and studying 'immoral politicians' pushing a project that would eventually create the country's biggest ever loss. The price mortgage policy would create more corruption when the government had to manage a huge stockpile - a lesson they had learnt many times.

Indeed the policy is somewhat flawed to say the least,however let'sbe a little more realistic about the cost.

It won't be the politicians who will bear the brunt of the loss as they are cushioned by their safety fence of "investments."

It will be the ordinary people who will finance this inane scam scheme by virtue of high prices for that staple food supply (rice) along with no doubt increased taxation to recoup the financial losses incurred by their elected (?) masters.

They have been warned. All of the PTP policies should be studied and scrutinized to at the least, not bring Thailand down past the recovery point.

[Siam Simon]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

[waza]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Sounds more like he is giving legal advice to government ministers.

[Thai at Heart]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because he is a pooyai, and pooyais, no issue how successful or not, will be heard. This guy wasn't that bad, Sondhi can't stand him because he refused to right off all his bad debt, so in my book the guy can't be all bad.

[Bakseedaa]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

[TallGuyJohninBKK]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Yep, this surely means he's "incompetent" and ill-suited for offering advice on economic policies.... See below...

He was governor of the Bank of Thailand during the Thaksin government.

[Siam Simon]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

Nobody is ever right on the button with their forecast until after the event. This guy has a recent track record of utterly miserable failure. The fact that he is even being quoted on economics is laughable. Oh..... wait a minute.....it's a Nation article.

[Siam Simon]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Yep, this surely means he's "incompetent" and ill-suited for offering advice on economic policies.... See below...

He was governor of the Bank of Thailand during the Thaksin government.

Which just goes to show that running a bank doesn't qualify someone to run a country's economy. A bit like a career diplomat making a complete hash of being foreign minister.

[whybother]

Which just goes to show that running a bank doesn't qualify someone to run a country's economy. A bit like a career diplomat making a complete hash of being foreign minister.

I would have thought that stepping up to Foreign Minister from being a career diplomat would make sense. I'm not saying that Kasit didn't make a complete hash of things, but did he screw up anything else besides Cambodia?

[Soupdragon]

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

I suspected this sort of thing could happen but never had any evidence. Surely if Thailands rice production suddenly peaks to impossible levels questions will be asked or has it already been worked out how to get the imported rice into the system.

[Nickymaster]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

Spot on! I am happy to see that there are people who can see through these games!

[hammered]

I would have thought to so precisely predict a loss that the future price of rice will need to be known.

Im sure nobody remembers the said gentleman being finance minister in the disastrous military installed Sarayud government.

[Thai at Heart]

Which just goes to show that running a bank doesn't qualify someone to run a country's economy. A bit like a career diplomat making a complete hash of being foreign minister.

I would have thought that stepping up to Foreign Minister from being a career diplomat would make sense. I'm not saying that Kasit didn't make a complete hash of things, but did he screw up anything else besides Cambodia?

Well on the basis that Cambodia and Thaksin were about the only 2 things he had to deal with during his time as FM, I would say he was a resounding 0 for 2.

[hammered]

Which just goes to show that running a bank doesn't qualify someone to run a country's economy. A bit like a career diplomat making a complete hash of being foreign minister.

I would have thought that stepping up to Foreign Minister from being a career diplomat would make sense. I'm not saying that Kasit didn't make a complete hash of things, but did he screw up anything else besides Cambodia?

Well on the basis that Cambodia and Thaksin were about the only 2 things he had to deal with during his time as FM, I would say he was a resounding 0 for 2.

Dont go forgetting that UN body that Thailand decided to kind of leave before the election intervened

Still Kasit did provide plenty of amusement with his utter ineptness and it looks like his successor may be about to delight us by continuing in the same frame although he has a way to go to achieve a Kasitesque nirvana of disaster.

[Thai at Heart]

Which just goes to show that running a bank doesn't qualify someone to run a country's economy. A bit like a career diplomat making a complete hash of being foreign minister.

I would have thought that stepping up to Foreign Minister from being a career diplomat would make sense. I'm not saying that Kasit didn't make a complete hash of things, but did he screw up anything else besides Cambodia?

Well on the basis that Cambodia and Thaksin were about the only 2 things he had to deal with during his time as FM, I would say he was a resounding 0 for 2.

Dont go forgetting that UN body that Thailand decided to kind of leave before the election intervened

Still Kasit did provide plenty of amusement with his utter ineptness and it looks like his successor may be about to delight us by continuing in the same frame although he has a way to go to achieve a Kasitesque nirvana of disaster.

Oh yes, that too.

Problem is that the moment Thailand gets into conversation with Cambodia, some kind of red mist descends. I lived in Greece for a while, and it was similar to how they reacted to discussing issues with Turkey. History colours the reaction so much, that logical government discussion goes completely out the window. I won't bother to point out that Greece's ability to white wash it's own domestic issues with nationalistic rhetoric has led it to the brink of financial disaster. They even had a secret discretionary military budget (does this sound familiar?)They thought it was enough to be superior to Turkey, much in the same way that governments in Thailand see their reference point for success to be superior/more successful than Cambodia, Vietnam, Laos and Burma, as though that is an achievement.

However, Kasit hardly helped talking about washing feet in blood etc. He really was a laugh a minute and achieved absolutely zilch in terms of what maybe expected of a foreign minister.

It is similar when anyone wants to debate foreigners owning land in Thailand. It is impossible to have a reasoned parliamentary debate of the pros and cons. Cambodia under the dems was an issue incapable of reasonable grown up discussion, because one party was coming from a false sense of superiority.

Edited September 26, 2011 by Thai at Heart

[animatic]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Sounds more like he is giving legal advice to government ministers.

He was under the THAKSIN government,

and is one of the few voices of reason that Thaksin ever put in office.

He eventually left, because he likely saw the writing on the wall,

ie not going to be allowed to do his job un-molested by interests.

Your knee jerk response was predictable.

He was one of the few actually balanced minds in finance,

and is a regular op-ed contributor of arguably always logical thoughts.

Just because he had one short term posting in an opposing government doesn't mean he was bad, but that the interests he had to deal with were not possible to reconcile. I think it's quite interesting he was picked in the 1st place after being Bank of Thailand Gov under Thalkisn, and then becoming FinMin under Suyarad.

He was enough of a centrist AND competent enough, to be given a post for logical reasons, and he clearly never intended a long term stay under Suyard. But someone needed to do it amidst the chaos politically.

And he was light years away from the cipher who was doing it under Samak and Somchai and 'completely missed the world financial crisis', while K, Devakula and K. Korn were commenting on it in Op-Eds ACCURATELY, and the PPP FinMin dithered and did NADA..

Edited September 26, 2011 by animatic

[aussiebebe]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

The rice mortgage scheme was implemented under Samak, Pridiyathorn is only warning that recent history will repeat itself. It's hard to pin the blame directly on anyone; the Thai electorate knew the policy clearly before the election; the policy was transparent.

[KKvampire]

of course the PT Financial ministers are not competent to deal with the country's finances but hey,, the masses dont seem to care , they would vote for them again. Thailand basket case in few years =Prediction, Crazy to have investments in the country

[Lite Beer]

Pridiyathorn warns against rice pledging scheme

By Achara Pongvutitham

Vietnam, the world's second-biggest rice exporter, could topple Thailand from its perch and become No 1 if the Yingluck government goes ahead with the rice-pledging scheme, former finance minister MR Pridiyathorn Devakula warned.

"Losing the No 1 position also means losing foreign-exchange earnings," Pridiyathorn said while pointing out that the unrealistically high price of Thai rice will make exports difficult.

Pridiyathorn warned that the government would face big trouble - corruption in its huge rice stockpile, and loss of budget spending to subsidise the programme. In addition, the government will monopolise the rice market and that would damage the market mechanism and the rice export business.

Thailand has experienced under the many governments who have implemented the rice-pledging scheme that it leads to loss of bargaining power to importers, loss of export opportunities amid rising market prices, degradation of quality and corruption among politicians, officials, rice millers and exporters, he said. The rice-pledging policy has also made the country shoulder its biggest loss ever. The Bank for Agriculture and Agricultural Cooperatives, which will facilitate implementation of the programme, would be spending an estimated Bt400 billion while the government would subsidise a projected loss of Bt250 billion.

Pulling out supplies from the market when prices are rising, and when other rice-exporting countries have plentiful production, is not the right way to implement the programme, Pridiyathorn said. These factors will not push up the world prices much and eventually Vietnam will be the biggest beneficiary thanks to its competitive prices.

"If the government stops the rice-pledging scheme, it can stay in power for longer," Pridiyathorn predicted.

In principle, the pledging price should be quoted at 80 per cent of market price to enable farmers to have working capital when prices are low. However, it will also encourage them to withdraw their rice and take benefit when rice prices increase. As a result, the government has a lower rice volume than targeted amount joining in the project and able to maintain its export champion in terms volume and value for decades.

Since 2004, under the Thaksin government, the rice-pledging scheme has been implemented at unrealistically high prices, prompting farmers to burden the government with their produce, Pridiyathorn said.

Due to the high prices, the total rice volume under the scheme was sharply increased from 2.38 million tonnes of paddy rice (main crop) in 2003-04 to 5.29 million tonnes in 2004-05. However, the targeted volume was set at the same level of 9 million tonnes.

drop In export volumes

The country's export volume significantly dropped from 10.11 million tonnes of rice in 2003-04 to 7.28 million tonnes in 2004-05, paving the way for Vietnam to increase its export volume from 4.30 million tonnes to 5.17 million tonnes in the same period.

During the Samak Sundaravej government in 2008-09, not only was the pledging price fixed higher than 100 per cent, the Cabinet also approved additional subsidy of Bt2,000 per tonne. This caused Thailand's total exports to drop again to 8.52 million tonnes while Vietnam boosted its exports to 5.95 million tonnes.

Pridiyathorn added that the government had shouldered a combined loss of Bt26.49 billion from the pledging scheme between 2005-06.

Even during the Democrat-led government, the pledging price was quoted higher than market price at Bt2,000 per tonne before its income-guarantee scheme was implemented. The scheme aimed to pay for the price difference between market price and the government's reference price. With a huge stockpile of 5.32 million tonnes and the high pledging price, it caused government losses of Bt33.33 billion.

Pridiyathorn believes that the total volume of paddy rice under the mortgage scheme this year will reach 27 million tonnes, accounting for 90 per cent of the country's projected production, which is expected to be 32 million tonnes.

"For sure, farmers will leave their rice stocks as a government burden," Pridiyathorn said, adding that it would create a loss of Bt135 billion. The figure has been calculated from the difference between market price and pledging price of Bt5,000 per tonne.

This would mount the government stockpile leading to sluggish exports, as exporters would not have rice supplies to sell overseas.

Pridiyathorn questioned how the government planned to release the huge stockpile. Government-to-government deals are not an easy way, he said. In cases of open bidding, it will lead to corruption as in the past, with politicians and exporters sharing the spoils.

-- The Nation 2011-09-26

[hammered]

"If the government stops the rice-pledging scheme, it can stay in power for longer," Pridiyathorn predicted.

An interesting comment. Surely the government have a four year tenure should they chose to not go for an early election and it is unlikely this policy is going to see the rural masses who voted for it descend upon the capital pitchforks in hand, so what can he mean assuming of course it isnt just big man talking stuff?

Edited September 26, 2011 by hammered

[OzMick]

One of the more interesting facets of the scheme is that thai rice that is being stockpiled now (estimates in the millions of tonnes because thailand has virtually withdrawn from the world market - hence price increases) will attract the subsidy. When fuel tax was decreased, every petrol station had their stocks assessed so that excess tax could be refunded.

Not once have I heard any suggestion that currently held rice stocks should be declared. Not one baht of the subsidy that will be paid on the rice in miller's and exporter's storage will go to the farmers. And isn't that the stated intent of the scheme?

In fact, it is a payout to those fat cats who supported PTP; farmers are merely the facade of political correctness.

The concept of minister's criminal liability for their actions is interesting. This government may end up with a record for the number of MPs convicted after they lose office. That said, they can't be far off the record at the moment.

[Thai at Heart]

"Losing the No 1 position also means losing foreign-exchange earnings," Pridiyathorn said while pointing out that the unrealistically high price of Thai rice will make exports difficult.

I would think that he didn't actually say this, because I would hope that the former finance minister understands price elasticity.

[backtonormal]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

i think you will find that the millowners/exporters of rice are one of the power bases of the old feudal system that keep the poor poor and as such PT is trying to destroy this network not profit from it. if you want to write something correct, find out the owners of the two companies who between them account for 60% of Thailands rice exports. It is likely these people are being targeted by the PT.

[OzMick]

"Losing the No 1 position also means losing foreign-exchange earnings," Pridiyathorn said while pointing out that the unrealistically high price of Thai rice will make exports difficult.

I would think that he didn't actually say this, because I would hope that the former finance minister understands price elasticity.

Are you suggesting that the loss in tonnage might be more than made up by the increased price per tonne, so as to actually be revenue positive for Thailand?

Although rice is a staple food stock, there are plenty of suppliers, and alternatives like wheat and corn. I don't think anybody expects Thailand to actually gain from this scheme.

Most advantage will flow to millers, exporters, and other system rorters with a small flow on to some lucky farmers (most likely the wealthier ones), with the cost paid by the taxpayer and some of the poorest people in the world who will find their cost of food increasing markedly.

[OzMick]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because , this time the man is right on the button with his forecast... The Big guys behind this scheme will make millions and millions, the ordinary farmers will make nothing. it has been tried before with huge corruption involved, but huge payouts to the mill owners. These Big guys care nothing for Thailand or the Thai peoples.. All they care about is to line their own pockets till bursting... But they and associates, backed many of these PTP MPs and now want their payback.. In Vietnam right now , hundreds and hundreds of tons of cheap rice is waiting to be brought into Thailand , you cannot DNA rice, this will all be claimed as Thai rice and the guaranteed moneys paid to those crooks and cheats.. This plan has been in the pipeline for a long time now... It involves huge amounts of taxpayers hard earned moneys going to these cheats and crooks... I was recently in Da Nang and visited 4 huge storage units full to the roof with cheap rice, we were trying to buy this rice for aid in Pakistan, the owners told me it was already sold to Thai mill owners, why would Thailand be importing rice..? They will triple their moneys on this deal... Thank you Yinluck... so much for a stand against corruption.. and the band played on...!!! Amazing Thailand.

i think you will find that the millowners/exporters of rice are one of the power bases of the old feudal system that keep the poor poor and as such PT is trying to destroy this network not profit from it. if you want to write something correct, find out the owners of the two companies who between them account for 60% of Thailands rice exports. It is likely these people are being targeted by the PT.

And that's why they are changing from the Democrat's scheme which paid directly to the farmer?

[Crushdepth]

This guy was an incompetent finance minister under the 2006 coup-appointed government. Why on earth is he offering macro-financial advice to the current government?

Because they are even more incompetent.

[Thai at Heart]

"Losing the No 1 position also means losing foreign-exchange earnings," Pridiyathorn said while pointing out that the unrealistically high price of Thai rice will make exports difficult.

I would think that he didn't actually say this, because I would hope that the former finance minister understands price elasticity.

Are you suggesting that the loss in tonnage might be more than made up by the increased price per tonne, so as to actually be revenue positive for Thailand?

Although rice is a staple food stock, there are plenty of suppliers, and alternatives like wheat and corn. I don't think anybody expects Thailand to actually gain from this scheme.

Most advantage will flow to millers, exporters, and other system rorters with a small flow on to some lucky farmers (most likely the wealthier ones), with the cost paid by the taxpayer and some of the poorest people in the world who will find their cost of food increasing markedly.

Why not. The total demand for exported rice in the world is held in the hand of very few producers. Do you think that Vietnam is going to hold its prices stable, or increase in line with Thailand to exploit the increase in Thai prices. It isn't as simple to say that price for Thai rice goes up, so the volume of exports will reduce proportionately. I would imagine that most rice importing countries expect to stay precisely that way, and not switch to corn or wheat because the people don't eat it, pure and simple.

There will be some drop in total exports, but to say that the total value will surely go down is not proven yet. We have seen Thai exports increasing for the last few years, despite the Thai baht continuing to rise and rise. The world has a finite amount of suppliers who can produce reliable volumes of high quality rice, Thailand being one of few.

World market in 2010

· The world's rice cultivation area for crop year 2009/10 was about 156.1 million hectares, down 1.7 million hectares compared with 2008/09. Total world rice production for 2009/10 reached 660.2 million tons, down 10.3 million tons from 2008/09. World demand for rice was about 435.2 million tons, which was similar to 2008/09. Rice exports reached 29.9 million tons, up 0.7 million tons (2.40%) compared with 2008/09. Except for the crop year 2006/07, this has been the highest level of rice exports of the world in recent years. World’s ending rice stocks for 2009/10 was about 95.3 million tons, up 3.6 million tons (3.93%) over 2008/09.

· According to AGROINFO, for 2009/10 crop year, Thailand was the largest rice exporter in the world, with approximately 8.5 million tons, followed by Vietnam with 6.5 million tons. Meanwhile, the Philippines remained the biggest importer of rice in the world, with approximately 2.6 million tons, of which imports from Vietnam accounted for 75%.

http://agro.gov.vn/news/coffee_sugar_rice_vegetable_meat_food_fisheries_21281_Vietnam-rice-industry-in-2010-and-outlook-for-2011.htm

So Thailand has a quarter of the total rice export business, and yet the rice trading business makes up only 29mnt of an industry that makes up 660mnt. I think we may surprisingly see that Thai rice exports withstand this price hike quite well.

[blackout]

Former Finance Minister MR Pridiyathorn Devakula has warned Commerce Minister Kittiratt na Ranong and Finance Minister Thirachai Phuvanatnaranubala they would be chiefly held accountable for a potential staggering loss of Bt250 billion to the country if the rice mortgage scheme is implemented.

i am not sure about that, held someone respond for damage he/she have done on the land of (fake) smile can easily be done base on ... money.

those bankrupted the country and start the asian financial crises has never been held respond for anything. When democrat was a government, the democrat didn’t do a thing. When thaksin came back as a PM, sure he wasn't punish himself and his friends!

Whoever taking control of the country as a government, thais in general won’t do a thing. Money is everything here who really care about the country?