Crop Policy Leads To Failure And Long-Term Damage: Thai Opinion

[webfact]

EDITORIAL

Crop policy leads to failure and long-term damage

The Nation

BANGKOK: -- Price subsidies on farm produce are reducing Thailand's competitiveness and harming agriculture; it's time to reverse them before it's too late

The government of Prime Minister Yingluck Shinawatra must urgently revise its price-pledging scheme for agricultural products. Although the policy might be able to shore up some farm prices in the short term, it is the wrong kind of incentive to strengthen the position and wellbeing of the nation's farmers.

The government has, since October last year, spent more than Bt300 billion for pledging programmes on rice, cassava, garlic and red onions. The programme has, however, resulted in depressed rice prices instead of shoring them up.

A small group of people has benefited from this populist policy. But the majority has not. The evidence is in a recent series of rallies held by farmers asking for the government to provide them with even more subsidies. Apparently, the policy is not creating a multiplier effect in benefiting a majority of farmers.

If the government does not remedy this situation, it will not only squander a massive budget, but also, in the longer run, entirely wreck the already reduced competitiveness of Thai farmers.

This populist subsidy programme has never been economically sensible because it is simply not sustainable. Politicians are prone to implement this kind of rice policy because it can lure rural voters who believe that a large amount of handout money will bring benefits to farmers.

However, the latest price levels on farm products subject to the pledging programmes have shown that the policy is a failure. For instance, some traders have smuggled cassava from neighbouring countries to sell here, thus taking advantage of the false price set by the Thai government. The Thai Tapioca Traders Association says that more than 300,000 tonnes of cassava have so far been smuggled in from Cambodia. According to the association, the market price of tapioca chips from Cambodia is Bt6 per kilogram, and Bt1.70 to Bt1.80 for fresh cassava, while the price of tapioca chips in the Kingdom is above Bt8 per kilo, with the pledging price for fresh cassava currently at Bt2.80.

The situation with garlic is no better. Garlic growers have complained that they are suffering as the price of the crop has fallen to Bt7 to Bt9 per kilogram, less than the production cost of Bt10 a kilo. Last year, garlic traded at Bt30 to Bt40 per kilo. Farmers say the government has implemented the pledging project inefficiently, without regard for total production.

The government allocated only Bt70 million for garlic pledging, but this year production has exceeded 46 million kilos. If the government had to accept the pledge price for all garlic, it would need to raise its budget for this product to Bt1.6 billion if it wanted to shore up the price for the entire crop.

Meanwhile, the government will have to raise the budget for red-onion pledging from the original target of Bt1.2 billion because the situation is worse than originally expected.

All of this is solid evidence that the crop pledging programmes have failed to serve the purpose of raising the standard of living of farmers. Even worse, as seen in the recent rallies, farmers are calling for even more support in spite of the massive sum of money spent on them already.

These pledging schemes do not increase farmers' competitiveness. In fact, the depressed prices of crops this year is mainly because farmers are placing higher priority on quantity produced instead of the quality of their produce. They have simply increased the amount of produce grown in the hope of cashing in from the pledging programme.

The pledging programme, meanwhile, could damage the overall reputation of Thai rice as a premium product. Farmers now churn out low-quality rice to receive the uniform subsidy price of Bt15,000 per tonne. The programme only pushes up the cost of local rice production, meaning that Thai rice is now facing strong competition from cheaper rice producers such as Vietnam and India. Burma will also become a main competitor soon, should it aim to export rice.

This is mismanagement on a massive scale that is resulting in depressed prices, smuggling and possible long-term damage to the agricultural sector. All these problems are the result of short-sighted policies. A future in which Thailand has to import these same agricultural products may not be the joke it once was.

-- The Nation 2012-03-17

[moe666]

Trying to control the price of anything has show to be a deadend endeavor no matter what country has tried to do it.

[hanuman2543]

"... entirely wreck the already reduced competitiveness of Thai farmers." The what??? It is well known, that the Thai farmer can not even compete with his counterpart in Cambodia, and that is not because of subsidies.

Edited March 17, 2012 by hanuman2543

[whybother]

"... entirely wreck the already reduced competitiveness of Thai farmers." The what??? It is well known, that the Thai farmer can not even compete with his counterpart in Cambodia, and that is not because of subsidies.

That's why it says "already reduced competitiveness".

[hanuman2543]

"... entirely wreck the already reduced competitiveness of Thai farmers." The what??? It is well known, that the Thai farmer can not even compete with his counterpart in Cambodia, and that is not because of subsidies.

That's why it says "already reduced competitiveness".

My emphasis was more about the "entirely wreck". How can you wreck something that was never there in the first place?

[SICHONSTEVE]

"A small group of people has benefited from this populist policy. But the majority has not"

Which should disqualify it as a populist policy - more "all for one" than "one for all".

On account of the Thai's not being prepared to do anything where they have appeared to have lost face and need to admit they were wrong, then this doesn't augur well for Thailand - especially being that the Democrats were 'screaming from the roof tops' that this was errant policy was going to be "calamitous for Thailand".

[thirteenalpha]

Great job on devaluing the prized Thai Jasmine rice. You would think they have enough money to hire at least one educated economist.

[SICHONSTEVE]

Great job on devaluing the prized Thai Jasmine rice. You would think they have enough money to hire at least one educated economist.

The only problem here is that they are all in the Democrat party!!!

[thirteenalpha]

Great job on devaluing the prized Thai Jasmine rice. You would think they have enough money to hire at least one educated economist.

The only problem here is that they are all in the Democrat party!!!

I don't know how they could call this democracy. It sounds more like an oligarchy.

Subsidize rice for your corporate giant friends while the little guys fight to break even, even if it means sacrificing quality to increase yields. I suppose I shouldn't speak without all of the facts.

Edited March 17, 2012 by thirteenalpha

[WackySomchai]

As long as the fugitive and his cronies benefit from the price-pledging nothing will change. Thaksin thinks, Thailand sinks ...

[SICHONSTEVE]

Great job on devaluing the prized Thai Jasmine rice. You would think they have enough money to hire at least one educated economist.

The only problem here is that they are all in the Democrat party!!!

I don't know how they could call this democracy. It sounds more like an oligarchy.

Subsidize rice for your corporate giant friends while the little guys fight to break even, even if it means sacrificing quality to increase yields. I suppose I shouldn't speak without all of the facts.

Think they've been monitoring the "russian mafia's" way of doing things???

[AleG]

Ah! Crop Policy leads to failure and long-term damage... I thought that was an "a" there.

300 billion every six months, ruining the export market.

It's a pretty good political ploy though, if you don't give a flying f... about the country as a whole. If or when another party takes over the reins and they are facing with stopping this nonsense the PTP, or whatever name they carry then, will be up in the rooftops denouncing the elites robbing the poor oppressed farmers of their hard earned money. So that party would have to either bite the bullet and commit political seppuku for the greater good of the nation or continue circling down the fiscal drain.

[thirteenalpha]

It's a pretty good political ploy though, if you don't give a flying f... about the country as a whole.

I like to think that they do give a flying f... They are just completely ignorant.

[thirteenalpha]

I have always wondered how it only costs me less than 800 baht for a 25 kg bag of Thai Jasmine rice here in the USA. It seems like it should cost at least that much to ship it over here. I know my wife would pay 10 times that amount before she would eat the shitty rice we grow here.

[Heimdallr]

It worked exactly the way the intended it, what's the problem?

[somo]

Sadly the farmers are not even receiving the subidy certainly for cassava.

In my village in Chayapoum the mills that buy from the farmers do not give the 2.80 guaranteed price but surrently just over 2.00/kilo. But they do claim the subsidy (currently about 800 Baht/ton) for themselves from the government as they force the farmers to sign saying they have been paid 2.80/kilo. As they are in debt to the mills they can do nothing but go along with it.

Disgusting how wealthy Thais treat their poorer fellows.

[bigbamboo]

Ah! Crop Policy leads to failure and long-term damage... I thought that was an "a" there.

300 billion every six months, ruining the export market.

It's a pretty good political ploy though, if you don't give a flying f... about the country as a whole. If or when another party takes over the reins and they are facing with stopping this nonsense the PTP, or whatever name they carry then, will be up in the rooftops denouncing the elites robbing the poor oppressed farmers of their hard earned money. So that party would have to either bite the bullet and commit political seppuku for the greater good of the nation or continue circling down the fiscal drain.

Haha!...... you beat me to it!

[lannarebirth]

Sadly the farmers are not even receiving the subidy certainly for cassava.

In my village in Chayapoum the mills that buy from the farmers do not give the 2.80 guaranteed price but surrently just over 2.00/kilo. But they do claim the subsidy (currently about 800 Baht/ton) for themselves from the government as they force the farmers to sign saying they have been paid 2.80/kilo. As they are in debt to the mills they can do nothing but go along with it.

Disgusting how wealthy Thais treat their poorer fellows.

Yeah it's all those mill owners that supply transport to get those poor farmers to Bangkok for the Red Shirt demonstrations.

[spiritrace]

We had to start charging for the Jasmine rice in our restaurant here inthe US. Lot less orders for Jasmine rice now. There is a limit to how much people are willing to pay. We might have to start using the Louisana rice grown here in the US if this continues. Funny how if someone farts in one part of the world we can smell it on the other side of the world........

[bigbamboo]

We had to start charging for the Jasmine rice in our restaurant here inthe US. Lot less orders for Jasmine rice now. There is a limit to how much people are willing to pay. We might have to start using the Louisana rice grown here in the US if this continues. Funny how if someone farts in one part of the world we can smell it on the other side of the world........

Is that what it is? I thought it was the drains here.

[lungmi]

Remark from the country side.

We have an agricultural cooperative (manager studied in Denmark)

10000 Baht per ton is guarantee. Rice mill included.

The members of the cooperation can use the agricultural machines

with a small tax.

[FangFerang]

As long as the fugitive and his cronies benefit from the price-pledging nothing will change. Thaksin thinks, Thailand sinks ...

Yeah, right. Thaksin caused malaria. Thaksin caused unfair pricing policies in Thailand. Thaksin caused my anus to wrinklle.

Sure. Thalkin even caused the flood. And, I think, he made cancer too. What an evil demon he is! More than human and less than humane, The country would be perfect now if only Thaksin had never been born.

Edited March 17, 2012 by FangFerang

[lungmi]

As long as the fugitive and his cronies benefit from the price-pledging nothing will change. Thaksin thinks, Thailand sinks ...

Yeah, right. Thaksin caused malaria. Thaksin caused unfair pricing policies in Thailand. Thaksin caused my anus to wrinklle.

Sure. Thalkin even caused the flood. And, I think, he made cancer too. What an evil demon he is! More than human and less than humane, The country would be perfect now if only Thaksin had never been born.

Right, I agree, the flood didn't came from him, the flood management yes, For cancer he has to take of himself. You say it:The country would be perfect now if only Thaksin had never been born.

I agree, but may be you use irony I don't understand?

[Heimdallr]

Yeah, right. Thaksin caused malaria. Thaksin caused unfair pricing policies in Thailand. Thaksin caused my anus to wrinklle.

Sure. Thalkin even caused the flood. And, I think, he made cancer too. What an evil demon he is! More than human and less than humane, The country would be perfect now if only Thaksin had never been born.

Now that we can finally agree, the reconciliation can at last take place.

[Roadman]

As long as the fugitive and his cronies benefit from the price-pledging nothing will change. Thaksin thinks, Thailand sinks ...

Yeah, right. Thaksin caused malaria. Thaksin caused unfair pricing policies in Thailand. Thaksin caused my anus to wrinklle.

Sure. Thalkin even caused the flood. And, I think, he made cancer too. What an evil demon he is! More than human and less than humane, The country would be perfect now if only Thaksin had never been born.

Perhaps you should not have let Thaksin near your anus. He does f>>> up a lot of things.

[rakman]

Trying to control the price of anything has show to be a deadend endeavor no matter what country has tried to do it.

+1

[MaiChai]

We had to start charging for the Jasmine rice in our restaurant here inthe US. Lot less orders for Jasmine rice now. There is a limit to how much people are willing to pay. We might have to start using the Louisana rice grown here in the US if this continues. Funny how if someone farts in one part of the world we can smell it on the other side of the world........

When there is a business opportunity, someone will step in. I watched a NHK program on Cambodia this week. In previous times the Cambodians sold their rice to the Thais, who then sold it on as Thai rice. Now they are branding, marketing and selling their own rice for export. Then there is the Vietnamese and the Indians. I am sure the Americans could grow fragrant rice, with much greater automation?

Personally I prefer basmati rice to Thai fragrant rice (and its cheaper too); hey, what do I know I am a dumb farang!

I would add, has anyone seen those huge rice storage facilities that are poping up all over the countryside? Obvious the rice is being bought, but doesn't have buyers so its being stored?

Edited March 17, 2012 by MaiChai

[waza]

sad situation, The PTP use public money to subsadise profits for themselves and their friends and pass the bill on to the future generations to pay.