Thai Commerce Ministry Seeks Bt260 Bn To Bolster Rice Pledging

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Commerce Ministry seeks Bt260 bn to bolster rice pledging

PETCHANET PRATRUANGKRAI

THE NATION

BANGKOK: -- The Commerce Ministry plans to ask the Cabinet for Bt260 billion to subsidise the rice pledging project for the October crop.

However, the ministry is confident that the pledging scheme will not run a huge loss because it will earn a return from selling 4 million to 5 million tonnes under government-to-government contracts this year.

Commerce Minister Boonsong Teriyaphirom said the G2G deals were expected to reach at least 4 million tonnes, pushing the country's total exports up to between 8.5 million and 9 million tonnes this year.

The government will maintain the scheme at the same pledging price in the following year to continue driving up the rice price in the market.

The pledging price for paddy white rice is Bt15,000 a tonne, higher than the market quotes of Bt10,000-Bt11,000, and for jasmine rice is Bt20,000, versus Bt14,000 in the market.

Spending on the pledging scheme should remain at this year's level of Bt260 billion because the same quantity of 31 million to 32 million tonnes of paddy is expected from the main and second crops.

The ministry has not spent huge sums on the rice subsidy and created huge losses, Boonsong said. Some revenue from the G2G deals will soon be remitted to the Bank for Agriculture and Agricultural Cooperatives.

"Thailand should be able to supply 4 million to 5 million tonnes of rice under the G2G contracts to many trading partners. For instance, about 2 million tonnes to China, 1 million tonnes to Indonesia, 1 million tonnes over two years to Bangladesh and 250,000 tonnes to Ivory Coast."

The government will send a mission to the United Arab Emirates and Bahrain next month to strengthen cooperation on supplying rice to them and other Gulf Cooperation Council (GCC) countries.

Thailand should be able to ensure food security for the GCC by shipping them 1 million tonnes of rice each year. The strategy to guarantee a rice supply to the group should also help prevent the perceived problem of foreign investors buying up land in Thailand to raise rice.

The GCC comprises Saudi Arabia, Kuwait, Oman, the UAE, Qatar and Bahrain.

The Philippines, Africa and the Middle East are other potential customers for G2G rice sales.

According to the ministry's report, the government has already spent about Bt200 billion for the rice pledging scheme and Bt60 billion for subsidising rubber, cassava and red onions.

The government plans to continue the cassava pledging scheme in the upcoming harvest season, but it will not stock cassava as tapioca chips or starch any longer as they have not made much money for the government.

To ensure a high return and reduce in inventory holding costs, the government plans to supply all pledged cassava to ethanol producers next year.

The ministry has reported about 6.7 million tonnes of cassava as entering the pledging scheme this year. The government is negotiating with China to release those stocks soon.

-- The Nation 2012-08-14

[Ricardo]

I wonder what price the government is getting, for this government-to-government trading, are they recovering the (significantly above world-markets) price they paid the millers or are they incurring a loss ? And define "huge loss" in "the pledging scheme will not run at a huge loss" ?

The more they dance round the issue, the more the suspicion exists, that they are actually making a loss !

And if the cash will soon be passed to the BAAC, it is presumably currently sitting in the government's bank-account, why did they not pass it on as it was received from overseas ? Obviously not because the government has any cashflow-problem, so why hang-on to the money ?

Please forgive me for being a little cynical, but as always there is a need, for the cleansing-light of publicity and transparency !

No doubt, if pressed, some functionary will be volunteered to stick his/her head above the parapet, and claim 'commercial confidentiality' !

P.S. just to add, there should of course be equally-clear accounting, for subsidy-schemes run under previous governments, so that the taxpayers can see the cost of this sort of policy. No double standards !

Edited August 14, 2012 by Ricardo

[OzMick]

5 million tonnes @ B10,000 = B50 billion back on a B260 billion investment - not a huge loss. Where's Darrell Eastlake when we need him?

[cloudhopper]

"The government will maintain the scheme at the same pledging price in the following year to continue driving up the rice price in the market."

What a brilliant strategy to feed the kingdom.

[Ricardo]

If the current-scheme isn't running at a huge loss, then the government can surely use the proceeds from the current-sales, to finance the scheme again for the next crop, as in a revolving-fund ?

So why is a new B260-billion now required ?

Where did all the previous money go ?

Something does not add-up here, on the face of it.

[thaicbr]

Its always talk.talk.talk about government to government rice deals but as far as I'm aware NONE actually as done deals. No rice has actually been sold to date. I might be wrong though.

sent from my Wellcom A90+

[asiawatcher]

Great deal, let's put more money into the scam so we can skim more. <deleted> are these idiots thinking?

[MunterHunter]

Any of the PTP members come under any heat recently? Perhaps they need the extra money to cover bribes? Juyswonderin...

[jerrysteve]

My guess the crooks have already hedge their positions, the same as any hedge fund would to against future market prices.

[Pib]

As politicians know, votes cost money. But fortunately for the ruling party politicians it's only the taxpayer's money in the rice pledging scheme, so these politicians don't have to spend any of their own money. Life is good in PTP ruling party land. But the Democrats would have probably only been a little less free with the taxpayer's money.

[AleG]

"The government will maintain the scheme at the same pledging price in the following year to continue driving up the rice price in the market."

Now, didn't I read just two days ago, regarding the US taking Thailand to the WTO that Thailand was not trying to drive up rice prices with their not-subsidy?

Meanwhile they continue plundering the country without accountability, please remind me again why this gang was the best choice for Thailand?

[OzMick]

Does anybody, anywhere think that selling rice below market prices in G2G sales will NOT affect the market price? Sure, it gets it out of the warehouses, but does nothing to reduce the losses incurred.

[MunterHunter]

Meanwhile they continue plundering the country without accountability, please remind me again why this gang was the best choice for Thailand?

Something to do with cheap copy Chinese tablet pc's, minimum wage in 3 provinces and a charter rewrite

[givenall]

5 million tonnes @ B10,000 = B50 billion back on a B260 billion investment - not a huge loss. Where's Darrell Eastlake when we need him?

When do ever believe any governmental officials about sending money. It is so easy to spend someone else's money anywhere in the world especially over here, Since there is not real checks and balances. as long as everyone gets a share then no one will came against the spending

[moe666]

I am sure GK will come along and give us a perfectly good explanation how this scheme is working and how it will return unbelieveable amounts of money to the Thai People. barf

[SuneeTH]

I am sure GK will come along and give us a perfectly good explanation how this scheme is working and how it will return unbelieveable amounts of money to the Thai People. barf

Same same in Europe.

Ever heard of the BUTTER MOUNTAIN?

[Ricardo]

I am sure GK will come along and give us a perfectly good explanation how this scheme is working and how it will return unbelieveable amounts of money to the Thai People. barf

Same same in Europe.

Ever heard of the BUTTER MOUNTAIN?

Yes, which perhaps is why many farang posters recognise an agricultural-subsidy scam, when they see one ?

[ratcatcher]

If the current-scheme isn't running at a huge loss, then the government can surely use the proceeds from the current-sales, to finance the scheme again for the next crop, as in a revolving-fund ?

So why is a new B260-billion now required ?

Where did all the previous money go ?

Something does not add-up here, on the face of it.

"Something does not add-up here"

Nothing adds up in this country. Creative accounting, just like everywhere else.

[animatic]

If the current-scheme isn't running at a huge loss, then the government can surely use the proceeds from the current-sales, to finance the scheme again for the next crop, as in a revolving-fund ?

So why is a new B260-billion now required ?

Where did all the previous money go ?

Something does not add-up here, on the face of it.

Because they have screwed the pooch, the family pigs, an emaciated kwai,

and most of the chickens, who no longer come home to roost.

Edited August 14, 2012 by animatic

[Soupdragon]

Great deal, let's put more money into the scam so we can skim more. <deleted> are these idiots thinking?

I think you answered your own question.

[Skywalker69]

The ministry has not spent huge sums on the rice subsidy and created huge losses.

0.5 trillion THB.

[ratcatcher]

The ministry has not spent huge sums on the rice subsidy and created huge losses.

0.5 trillion THB.

Chicken feed!

[Robby nz]

According to the ministry's report, the government has already spent about Bt200 billion for the rice pledging scheme and Bt60 billion for subsidising rubber, cassava and red onions.

And red onions?

Anyone notice what happened to the red onions?

Same for the rice I suspect.

Although they should be able to use the sacks of rice instead of sandbags to stop the flooding.

May be part of the big flood protection plan.

[ratcatcher]

"The government will send a mission to the United Arab Emirates and Bahrain next month to strengthen cooperation on supplying rice to them and other Gulf Cooperation Council (GCC) countries.

Thailand should be able to ensure food security for the GCC by shipping them 1 million tonnes of rice each year. The strategy to guarantee a rice supply to the group should also help prevent the perceived problem of foreign investors buying up land in Thailand to raise rice.

The GCC comprises Saudi Arabia, Kuwait, Oman, the UAE, Qatar and Bahrain. "

We wouldn't want the Arabs and their camels to starve would we? Maybe Thailand should trade rice for oil?

They can't eat oil I believe.

[jaltsc]

Great deal, let's put more money into the scam so we can skim more. <deleted> are these idiots thinking?

I think you answered your own question.

I already can hear those giant trucks filled with cheap rice coming over from Vietnam and Cambodia. Hell of lot easier and more profitable than toiling in the rice paddies.

[billd766]

Great deal, let's put more money into the scam so we can skim more. <deleted> are these idiots thinking?

To quote an old ABBA song,

Money, money, money.

,

Give me more money,

It's a rich mans' world (and I am one now).

[spacebass]

Not to mention that it illegal for rich middle eastern citizens to buy land in Thailand !!!!

[tomross46]

I just built a new bed room to keep the money for a wedding, not I need government money to fill it. The tea in Thailand is very good. So is the rice wine.

[belg]

you think they checked if some thai businessmen / millers went to buy up rice from neighboor countries at cheap price and get them into the government program to gain massive corrupt profits? noooooooooooooooo, not in thailand, land of free, hub of corruptions

[bigbamboo]

Let's see.......... they can't sell it at the market price which is already well below the pledging price so they have to dump it on the cheap by selling it in bulk in a government to government deal, thus making an even bigger loss.

Now then, where's that Korn chap, you know the one Thai politician in recent years who seemed to know anything about economics.