Foreigners 'Skirting Rules Protecting Rice Businesses'

[webfact]

Foreigners 'skirting rules protecting rice businesses'

Petchanet Pratruangkrai

The Nation

S'pore firms 'exploiting loopholes'; Study: local competitiveness falling

BANGKOK: -- Farmers and traders stand to lose business as they face a serious challenge from many foreign firms, mainly Singaporean, which have set up rice-trading operations and plantations here under Asean seamless trade.

"Although rice farming and trading are limited to Thais under the Foreign Business Act, many foreigners can easily rent or own land for raising rice and conducting a rice-trading business in the Kingdom," a rice trader said yesterday.

At a Commerce Ministry seminar on creating a strategy linking local and global businesses, Thai rice exporters urged the government to protect Thai rice-cultivating areas and the trading business from alien residents by urgently checking the ownership of rice plantations and the certificates for running a trading business.

The source said many Singaporean and some other foreign traders are now taking advantage of a loophole in Thai laws to purchase land suitable for paddy fields and starting up rice-trading houses in Thailand.

Those foreign investors tend to be Singaporeans, as they can easily come here to do business since their country is one of the Asean members, the source said.

The Asean Economic Community has now created challenges for Thai rice farmers and traders. Singaporean investors are exploiting free trade within Asean to deal in the grain, which should be restricted to Thais, he said.

Two years ago, the ministry reported that some foreign investors particularly from the Middle East had tried to purchase paddy fields in Thailand. However, the government, through the Department of Special Investigation and the Business Development Department, has not yet managed to investigate the circumstances.

Korbsook Iamsuri, president of the Thai Rice Exporters Association, said some Thai rice exporters are now not Thai, while some foreign rice exporters want to join the association as members.

She said Asean integration was a two-edged sword for the Thai rice industry, as it has encouraged Thai exporters to expand to other Asean nations, while foreign traders can easily penetrate the market here.

A study by the Thailand Development Research Institute (TDRI) showed that the lack of value-chain development in rice farming and loose cooperation between government agencies and rice traders had left Thai rice production and industry less competitive and less developed than in the past decade.

Rice exports continue to drop

Farmers are making less income and want the government's assistance every year, while Thai rice exports have continued to drop.

The study funded by the Commerce Ministry found that the Thai rice industry is being squeezed by tough competition in the world market and that development of Thai rice production and trading is lagging.

Somchai Jitsuchon, research director of TDRI, said Thailand needs to formulate a clear-cut strategy to develop its rice industry from farming to marketing since Thai rice trading competitiveness has dropped in the past year.

The study showed that the rice sector is handicapped by many problems like low quality grains, unsuitable plantation areas for each kind of rice, slow progress in irrigation systems, lacklustre development of rice breeds and higher costs of production, while yields remain low. Government agencies, including the Agriculture and Commerce ministries, and rice exporters have also fumbled with close cooperation to connect rice production and trading development.

"Amid the sluggish development of Thai rice production and trading, Thai rice has been quoted higher than its rice rivals by US$100 [bt3,200] per tonne because of the highly subsidised price, leading Thailand to lose market share to other countries and destroying opportunities for Thai rice to penetrate new export markets," he said.

The government should consider reviewing its rice pledging policy to reduce the impact from the overly subsidised price on the country's export competitiveness. It should also focus more on Asean free-trade agreements and clearly categorise Thai rice standards in order to serve the requirements of each rice consuming country, he said.

The study also showed that the yield of the main rice crop has plummeted by 17.26 per cent over the past decade to only 326 kilograms per rai this year. Last year, the yield was 394kg, while in 2010 it was 404kg.

Shipments of Thai rice have fallen sharply by 44 per cent year on year from 5.48 million tonnes to 3.04 million tonnes from January 1 to June 8.

Somchai said the government should work with the private sector to urgently solve the problem of declining efficiency in rice production and trading.

He suggested a six-pronged strategy of production development, increased value-added for Thai rice, improved logistics efficiency, new innovations and new technology, review of the government's policies on rice, and alliances for promoting exports and growth in rice farming.

Benjawan Ratanaprayul, director of the Commerce Ministry's Bureau of Trade and Economic Policy, said the government would consider the strategy to strengthen exports of Thai rice and other products.

Besides the rice sector, the study also focused on increasing export opportunities for Thai fruits, garments and tourism, which are the products and service that Thailand has high competency in to increase trading.

-- The Nation 2012-06-15

[BigJohnnyBKK]

First cracks in the ASEAN community showing here, lot's more to come I'm sure.

Improving efficiency means putting farmers out of work and off their small-plot lands, turning them into minimum-wage factory workers.

Probably inevitable but will rock the foundations of Thai society, huge upheavals coming.

[jonclark]

Just out if interest I know that foreigners aren't allowed to farm rice. But what about other agricultural products like vegetables, fruit and livestock. Can that legally be farmed? Or does that required the usually 51 :49 split between Thai and Foreigner??

Edited June 14, 2012 by jonclark

[waza]

SATIRE

Good to see the policies of the PTP government are bearing fruit and the bounty is shared by all the Thai people. Democracy in action, miracle Thailand

[Moruya]

Is this just the usual case of the Thais blaming foreigners for a screwed up rice industry when the blame lies elsewhere?

[talisman01]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

[rkidlad]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

It's easier just to not start your own profitable business and blame foreigners who do.

[mike123ca]

Trade is a two way street.

Let Thai farmers choose who whom they sell their rice. Why should Thai rice exporters have a monopoly.

If you can't work and trade to Thailand, then Thailand will start losing foreign markets.

Reminds me of the story of a Thai middleman who bought cattle. He complained that Thai farmers

were selling to the Vietnamese for a much higher price. He felt that farmers should not be able to

sell to foreigners at a higher price.

[daninthai]

Oh! That's why there is inflation. Got it.

Thais have absolutely no sense of cooperation. Multilateral deals need to be honoured, but they want to make deals with other countries, then refuse to honour any part of the deal that they consider negative. As if Thailand has special rights in the international community.

Either they join the coming ASEAN community, or they give up now and become isolationist fools.

[Javabear]

Just out if interest I know that foreigners aren't allowed to farm rice. But what about other agricultural products like vegetables, fruit and livestock. Can that legally be farmed? Or does that required the usually 51 :49 split between Thai and Foreigner??

I think all agriculture is a restricted business.

[Javabear]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

Singaporeans tend to have quite a bit more money than the average Thai rice farmer.

[Thai at Heart]

Just out if interest I know that foreigners aren't allowed to farm rice. But what about other agricultural products like vegetables, fruit and livestock. Can that legally be farmed? Or does that required the usually 51 :49 split between Thai and Foreigner??

I think all agriculture is a restricted business.

Joint ventures for processing are allowed, there are many many large ones.

Meanwhile elsewhere in Asean,

THAI-JAPAN JV

Toyota Tsusho, the trading arm of Japan's Toyota Motor Corporation, has teamed up with Thailand's Huay Chuan Rice Co and Uthai Produce to cash in on Cambodia's growing rice industry. The Thai-Japan joint venture is looking to lease 60,000 rai (9,600 hectares) in Battambang province, which borders Thailand on the west, for plantation. In addition, the investment comprises a rice mill and processing plant for export with an investment of $100 million (Bt3 billion).

Scream if someone steps on your toes at home, but do as you can elsewhere.

Edited June 15, 2012 by Thai at Heart

[Unkomoncents]

She said Asean integration was a two-edged sword for the Thai rice industry, as it has encouraged Thai exporters to expand to other Asean nations, while foreign traders can easily penetrate the market here.

Unsurprisingly, you can almost hear the tone of shock in this statement, as though she's truly surprised by this development, given the nature of the impending AEC. Of course they'll be clamoring to root out the foreigners now, rather than focus on why Thais are not competitive in their own markets.

[apetley]

I was thinking about why yields are so far down on previous years.

Where we live every last paddy seems to have been put to use since pledging was introduced. People seem to think they will be making money no matter what so little incentive to put in the effort by some who may be new to rice farming.

Sent from my GT-I9003 using Thaivisa Connect App

[IMA_FARANG]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

You missed the real point there.

It's not that Thais are not profiting from the Rice business....the point is that Thai Rice FARMERS are not profiting.

The profits, as common in Thailand, are going to the middle-men....who purchase the Rice from the farmers as low as possible and sell the Rice at a government subsidised price for a good profit.

These "Rice Growers" as the article calls them, are usually wealthy non-landowners who do not live in Rural areas but Urban areas, and whose main concern is maximising their profit....and let the Rice farmers in the Paddy fields go hang themselves for all the growers care.

Just as long as they get thieir new Mercedes, their Mia Noi(s), and their fancy house(s).

Now the Growers are in reality complaining that competition from "outsiders" is cutting into their unearned and excessive profits....and their Mia Noi time also.

My response to that is....tough Toliet squat guys.

For far to long the middle-men have been exploiting the farmers without giving the actual farmers their honest share.

So if Asean, and more competition it brings, causes problems for those growers....I call that a good thing.

To be fair, there are some fair and honest middle-men, So I don't want to say all of them are explointing th farmers in the paddy fields.

But for those who do I have no stmpathy,

[Thai at Heart]

She said Asean integration was a two-edged sword for the Thai rice industry, as it has encouraged Thai exporters to expand to other Asean nations, while foreign traders can easily penetrate the market here.

Unsurprisingly, you can almost hear the tone of shock in this statement, as though she's truly surprised by this development, given the nature of the impending AEC. Of course they'll be clamoring to root out the foreigners now, rather than focus on why Thais are not competitive in their own markets.

Having the cake and eat it comes to mind. Competition. "Gad zooks, didn't we pay enough already to keep those pesky foreigners off our turf".

[Pseudolus]

Dear Thailand

Instead of sitting on the sidelines grumbling about how the evil farangs are setting up businesses that are better run than your own, more profitable and productive, and better placed to compete on the global markets, how about doing the following;

• Learn from them and embrace competition
  
• Cease to stop working every day at 11am and sitting on your pick up drinking whiskey all day and do somework
  
• Embrace new techniques and machinery; just because you have done something for 2000 years does not mean it is the only way to do it
  
• Stop being pratts about international firms - you can compete with them but instead you prefer the lazy option of bribing the government to exclude them.
  

Yep, thats about right. In the mean time we can all look forward to a crack down on all farangs in Thailand. Thanks. tossers.

[Moruya]

Dear Thailand

Instead of sitting on the sidelines grumbling about how the evil farangs are setting up businesses that are better run than your own, more profitable and productive, and better placed to compete on the global markets, how about doing the following;

• Learn from them and embrace competition
  
• Cease to stop working every day at 11am and sitting on your pick up drinking whiskey all day and do somework
  
• Embrace new techniques and machinery; just because you have done something for 2000 years does not mean it is the only way to do it
  
• Stop being pratts about international firms - you can compete with them but instead you prefer the lazy option of bribing the government to exclude them.
  

Yep, thats about right. In the mean time we can all look forward to a crack down on all farangs in Thailand. Thanks. tossers.

Whilst I can understand some of what you are saying, feel for the farmer.

The vast majority cannot afford a pickup

In fact the vast majority cannot afford to drink much.

Rice farming is not a 9-5 type of job. You do what you need to do.

Farmers farm rice because its the only thing they know.

Education is basic, minimal.

They don't have the money to buy machinery

In short they are stuck in a rut.

How much help is the government giving them? F#% all in reality

Are there any government policies to modernise farming? Improve education? Sweet Fanny Adams

[clockman]

As per usual, blame somebody else. They cannot see beyond a quick profit today. Sell there birthwright for a mess of potage. Big problems 2015 and they just do not have what it takes to compete!

[Thai at Heart]

Dear Thailand

Instead of sitting on the sidelines grumbling about how the evil farangs are setting up businesses that are better run than your own, more profitable and productive, and better placed to compete on the global markets, how about doing the following;

• Learn from them and embrace competition
  
• Cease to stop working every day at 11am and sitting on your pick up drinking whiskey all day and do somework
  
• Embrace new techniques and machinery; just because you have done something for 2000 years does not mean it is the only way to do it
  
• Stop being pratts about international firms - you can compete with them but instead you prefer the lazy option of bribing the government to exclude them.
  

Yep, thats about right. In the mean time we can all look forward to a crack down on all farangs in Thailand. Thanks. tossers.

Whilst I can understand some of what you are saying, feel for the farmer.

The vast majority cannot afford a pickup

In fact the vast majority cannot afford to drink much.

Rice farming is not a 9-5 type of job. You do what you need to do.

Farmers farm rice because its the only thing they know.

Education is basic, minimal.

They don't have the money to buy machinery

In short they are stuck in a rut.

How much help is the government giving them? F#% all in reality

Are there any government policies to modernise farming? Improve education? Sweet Fanny Adams

Well, this has all happened with the system 99.9% in the hands of Thai buyers. Presumably, if there was more competition from buyers in the market, the financial well being of the farmers may improve?

[Moruya]

Dear Thailand

Instead of sitting on the sidelines grumbling about how the evil farangs are setting up businesses that are better run than your own, more profitable and productive, and better placed to compete on the global markets, how about doing the following;

• Learn from them and embrace competition
  
• Cease to stop working every day at 11am and sitting on your pick up drinking whiskey all day and do somework
  
• Embrace new techniques and machinery; just because you have done something for 2000 years does not mean it is the only way to do it
  
• Stop being pratts about international firms - you can compete with them but instead you prefer the lazy option of bribing the government to exclude them.
  

Yep, thats about right. In the mean time we can all look forward to a crack down on all farangs in Thailand. Thanks. tossers.

Whilst I can understand some of what you are saying, feel for the farmer.

The vast majority cannot afford a pickup

In fact the vast majority cannot afford to drink much.

Rice farming is not a 9-5 type of job. You do what you need to do.

Farmers farm rice because its the only thing they know.

Education is basic, minimal.

They don't have the money to buy machinery

In short they are stuck in a rut.

How much help is the government giving them? F#% all in reality

Are there any government policies to modernise farming? Improve education? Sweet Fanny Adams

Well, this has all happened with the system 99.9% in the hands of Thai buyers. Presumably, if there was more competition from buyers in the market, the financial well being of the farmers may improve?

I don't know what model would work best for them but certainly the politicians haven't improved anything.

Communism? Failed everywhere else.

Cooperatives? Probably but would need to be overseen by someone that was not corrupt.

The current small-holding model will just give them more of the same

Who could make this happen? People from the village head to the provincial governor to PM Yingluck herself.

Who will make it happen..............

They should put it all in the hands of the Australians!!

[Thai at Heart]

I don't know what model would work best for them but certainly the politicians haven't improved anything.

Communism? Failed everywhere else.

Cooperatives? Probably but would need to be overseen by someone that was not corrupt.

The current small-holding model will just give them more of the same

Who could make this happen? People from the village head to the provincial governor to PM Yingluck herself.

Who will make it happen..............

They should put it all in the hands of the Australians!!

Well, it is pretty obvious that the buying market is a very tight oligopoly. The prices offered to the farmers have been rigged for many many years. Now, that doesn't mean that the pledging/subsidy system is the right way either.

The be all and end all of the system should not be to allow the buyers/exporters and middle men to collude to manipulate the price as low as possible. The biggest issue with allowing foreign buyers into the market would probably be, were they to offer 1 baht/kg more than the local buyers, it probably wouldn't be very good for their longevity.

[OzMick]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

Singaporeans tend to have quite a bit more money than the average Thai rice farmer.

Most likely the result of running a profitable business

[Jaivin2011]

First we have Thai Chinese controlling every aspect of the economy and ensuring thatthe non-thai chinese will remain prro and be their slaves and now we have the Singaporean Chinese coming in and trying to take control of things. When will the masses everr wake up and do something to reclaim whats actually theirs and get rid of all these Hakkas and Teochews etc.

[w11guy]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

Singaporeans tend to have quite a bit more money than the average Thai rice farmer.

The article isn't about rich vs poor; it's about Thai vs foreigner. There are rich Thais and there's no reason they can't compete with the foreigners. The fact is that Thais aren't used to competition. They expect the government to protect everything, which is why it is such a poor country. Productivity, even in everyday tasks, is shockingly low.

[Bagwan]

Dear Thailand

Instead of sitting on the sidelines grumbling about how the evil farangs are setting up businesses that are better run than your own, more profitable and productive, and better placed to compete on the global markets, how about doing the following;

• Learn from them and embrace competition
  
• Cease to stop working every day at 11am and sitting on your pick up drinking whiskey all day and do somework
  
• Embrace new techniques and machinery; just because you have done something for 2000 years does not mean it is the only way to do it
  
• Stop being pratts about international firms - you can compete with them but instead you prefer the lazy option of bribing the government to exclude them.
  

Yep, thats about right. In the mean time we can all look forward to a crack down on all farangs in Thailand. Thanks. tossers.

Whilst I can understand some of what you are saying, feel for the farmer.

The vast majority cannot afford a pickup

In fact the vast majority cannot afford to drink much.

Rice farming is not a 9-5 type of job. You do what you need to do.

Farmers farm rice because its the only thing they know.

Education is basic, minimal.

They don't have the money to buy machinery

In short they are stuck in a rut.

How much help is the government giving them? F#% all in reality

Are there any government policies to modernise farming? Improve education? Sweet Fanny Adams

Well, this has all happened with the system 99.9% in the hands of Thai buyers. Presumably, if there was more competition from buyers in the market, the financial well being of the farmers may improve?

I don't know what model would work best for them but certainly the politicians haven't improved anything.

Communism? Failed everywhere else.

Cooperatives? Probably but would need to be overseen by someone that was not corrupt.

The current small-holding model will just give them more of the same

Who could make this happen? People from the village head to the provincial governor to PM Yingluck herself.

Who will make it happen..............

They should put it all in the hands of the Australians!!

Grief! What an idea? You've been here too long. Many Aussies have their hands full already - their todger in one hand and a bottle of the amber fluid in the other. I originally wrote glass but thought that bottle was more appropriate. Aussies are far too butch to be civilised enough to drink out of a glass.

[Time Traveller]

You can't have a country with 30 million farmers making a living, period..All the much vaunted "sufficiency economy" theory has given this country is to ensure a large supply of peasants who can barely scrape by with minimal income.

[NanLaew]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

It's one of those pesky loopholes left by pesky Thai legislators that the pesky foreigners are using.

For foreigners, there's always the loophole available whereas the Thai has the backhander at his/her disposal.

[NanLaew]

You can't have a country with 30 million farmers making a living, period..All the much vaunted "sufficiency economy" theory has given this country is to ensure a large supply of peasants who can barely scrape by with minimal income.

Yes but it's a 'business model' that serves another purpose quite well. How much longer though is the debatable issue.

[MobileContent]

If Singaporeans can start a rice business and make a profit why cannot Thais do the same ?

You missed the real point there.

It's not that Thais are not profiting from the Rice business....the point is that Thai Rice FARMERS are not profiting.

The profits, as common in Thailand, are going to the middle-men....who purchase the Rice from the farmers as low as possible and sell the Rice at a government subsidised price for a good profit.

These "Rice Growers" as the article calls them, are usually wealthy non-landowners who do not live in Rural areas but Urban areas, and whose main concern is maximising their profit....and let the Rice farmers in the Paddy fields go hang themselves for all the growers care.

Just as long as they get thieir new Mercedes, their Mia Noi(s), and their fancy house(s).

Now the Growers are in reality complaining that competition from "outsiders" is cutting into their unearned and excessive profits....and their Mia Noi time also.

My response to that is....tough Toliet squat guys.

For far to long the middle-men have been exploiting the farmers without giving the actual farmers their honest share.

So if Asean, and more competition it brings, causes problems for those growers....I call that a good thing.

To be fair, there are some fair and honest middle-men, So I don't want to say all of them are explointing th farmers in the paddy fields.

But for those who do I have no stmpathy,

I fully agree with you. I am seeing it all over Udon and Sakon Nakhon. When the smaller paddy farmers need money they bring 4 sacks of rice at 25KG each and sell it for 200 Baht each. When I ask them why they do it all they say that's the price the large Thai Rice mills are paying and they keep hearing their rice is not of good quality. For the normal farmer it does't make sense to farm for export. They storage the rice for their own consumption, specially if they only have 10 - 15 rai's of paddy rice and have a large family to support.