End Distortion Of Rice Trade: Abhisit Tells Govt

[webfact]

End distortion of rice trade: Abhisit tells govt

NAKARIN SRILERT

THE NATION

BANGKOK: -- Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Last year, the rice-pledging scheme cost Bt270 billion to operate. Between Bt30 billion and Bt40 billion of the amount went on administrative expenses and warehouse rental fees, which were of no benefit for farmers, he said, adding that these costs were however equivalent to what was spent during the entire year of his own administration's farm-income insurance programme.

He said the annual cost of the rice-pledging scheme was extremely high. Although the government insists that the amount spent during the first year was working capital, according to academics, a loss from 2011-2012 season rice sales of no less than Bt100 billion to Bt150 billion may well have been made.

The government could, therefore, instead provide a direct subsidy for farmers, as it would cost much less to run such a programme, Abhisit said, adding that the money would go to farmers directly, and not to rice millers or those renting out warehouses.

"The government needs to raise farmers' incomes, and it may need to subsidise farmers directly in order to do so. Foreign countries also do this; that is, give money to the target group. Farmers would then have more money, and the system would not destroy the market mechanism and not be against WTO [World Trade Organisation] rules," said the ex-PM.

The government could attach conditions to such a subsidy, he said. For example, the subsidy level would be raised if farmers increased productivity and crop quality in each round of rice growing. He reasoned that such a mechanism would develop farmers' skills.

Under the rice-pledging scheme, however, farmers speed up the cultivation of rice over a shorter period, often leading to lower-quality output, which may not be what the market demands.

NEGATIVE RESULTS

Several sectors have pointed to negative results from the rice-pledging project. Initially, a short-term impact could come from the administrative part of the programme, as the government might not be able to manage the large amount of rice in the 2012-2013 production year, Abhisit said.

After that, the Bank for Agriculture and Agricultural Cooperatives could confront a project liquidity problem, as there could be insufficient money from rice sales.

Finally, farmers may receive delayed payments under the pledging scheme. Some have already complained about the delayed issuance of pledging documents, he said.

In the long term, Thailand's overseas rice markets could be lost if the pledging programme continued, he said, pointing out that several Asean countries have already seen the scheme as providing them with an opportunity to sell more rice and search for other markets where prices are lower than those offered by Thailand.

Importantly, the Kingdom could lose markets where there is a focus on high-quality rice, he added.

"The government may think that having a large amount of rice in its hands means it can determine world prices. Actually, it's not like that, as there are a number of factors involved in setting the world's rice prices. Global prices are always on the move. It is also difficult for Thailand to set rice prices in Asean," Abhisit said.

As to the recent unclear official explanation of government-to-government sales, he said it was possible that the administration might not be able to sell much rice under such contracts, as the prime minister had previously said G2G export figures would be released by the end of this year.

The government has now said, however, that the figures will be disclosed when the project ends and the total amount of rice is delivered by the end of next year.

In principle, G2G sales could be disclosed after a contract is signed, Abhisit asserted, adding that the government may have to disclose the locations and amount of rice exported.

"If there is an attempt to stock rice in exchange for foreign participation in the government's future investment projects, such as water-resources management or high-speed trains, it may have to clarify the matter. As rice quality can lessen as time passes, we need to ask those countries why they are willing to take the rice [later].

The only way is that we may have to sell the rice at very low prices," he said.

-- The Nation 2012-10-17

[rubl]

I guess k. Abhisit doesn't believe in the 'trickle down economics' ?

[LuckyLew]

" Between Bt30 billion and Bt40 billion of the amount went on administrative expenses and warehouse rental fees"

Too late now, you cannot take the pigs away from the trough once they have started to feed

[asiawatcher]

It does not take a statement from Abhisit to point out the stupidity of this scam. But because he did it is officially politicised.

But how stupid (arrogant) is this Govt to have opened a door to hungry competitors, by increasing the sale price thinking somehow Thai rice is in global demand, when there are plenty of others selling at more than USD100 a tonne less. Food id food and price dictates sales. These competitors are now scrambling taking out the market due to Thailand's arrogance, and yet Thailand is still throwing Billions of Baht at it, money that could perhaps be used for the nurses?

Either way this has to be the most ridiculous, most damaging scam, in Thai Govt policy history.

[Thai at Heart]

It does not take a statement from Abhisit to point out the stupidity of this scam. But because he did it is officially politicised.

But how stupid (arrogant) is this Govt to have opened a door to hungry competitors, by increasing the sale price thinking somehow Thai rice is in global demand, when there are plenty of others selling at more than USD100 a tonne less. Food id food and price dictates sales. These competitors are now scrambling taking out the market due to Thailand's arrogance, and yet Thailand is still throwing Billions of Baht at it, money that could perhaps be used for the nurses?

Either way this has to be the most ridiculous, most damaging scam, in Thai Govt policy history.

It is the fact that "rice" is just a staple, and with the size of the worlds crops, and Thailand's exports representing a piddling amount of global total, it would appear to have been proven that you can't hold the world to ransom on "quality" in such a commoditised product. No country wants to have to import rice. They treat importing rice as a necessity not a premium quality purchase and thus, they are cherry picking from the other suppliers at lower prices, knowing that at some point Thailand's glut will have to come to market way below the price which they paid.

It actually mirrors quite closely, how many domestic markets for all sorts of products operate in Thailand. Limit competition and supply, and charge what you want because you can. Unfortunately, the GLOBAL rice market doesn't get pushed around that easily. Now, if a large rice crop failed somewhere in the world it could push prices up feasibly, but they are peeing up a waterfall right now in terms of limiting supply in the global market.

[givenall]

" Between Bt30 billion and Bt40 billion of the amount went on administrative expenses and warehouse rental fees"

Too late now, you cannot take the pigs away from the trough once they have started to feed

No hope for Thai people, as long as rich are in charge of the treasury. they will suck it dry before spend the money for the good of the Thailand

[Thrilla]

I guess k. Abhisit doesn't believe in the 'trickle down economics' ?

Because he - and everybody else that's cognizant - knows that it 'trickles up' the food chain to the usual suspects.

Here's a recently taken photo of them

.

[TackyToo]

" Between Bt30 billion and Bt40 billion of the amount went on administrative expenses and warehouse rental fees"

Too late now, you cannot take the pigs away from the trough once they have started to feed

No hope for Thai people, as long as rich are in charge of the treasury. they will suck it dry before spend the money for the good of the Thailand

We all know the solution: get rid of the middle men, once and for all!

[khunken]

" Between Bt30 billion and Bt40 billion of the amount went on administrative expenses and warehouse rental fees"

Too late now, you cannot take the pigs away from the trough once they have started to feed

No hope for Thai people, as long as rich are in charge of the treasury. they will suck it dry before spend the money for the good of the Thailand

We all know the solution: get rid of the middle men, once and for all!

Yes, and we know who designed the scheme to allow the rake-offs.

[Puccini]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

[belg]

give farangs the right to buy on his name: 1 rai of land to put on his own house... with this money, distribute it to farmers, to be able to buy 10 rai of farmland they get get for free...

[Noistar]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

I'm sure there is.

The issue is probably the priorities his Government attached to the policies he introduced.

The present ruling party have placed an enormous amount of emphasis, and PUBLIC money on this scheme, so it is right for a democratically elected Opposition to ask questions of the Government- IMHO.

Can always compare chalk and cheese but doesn't actually progress matters. Whatever happened in the previous Government has no relevance to the smoke and mirrors surrounding the introduction and administration of the current scheme.

[hellodolly]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

And if there was it would make what difference today?

Would the world suddenly demand only Thai rice?

[hellodolly]

If they continue with the rice schema the business to get into would be rice silos.

Kind of like self storage units back home.

[Soutpeel]

give farangs the right to buy on his name: 1 rai of land to put on his own house... with this money, distribute it to farmers, to be able to buy 10 rai of farmland they get get for free...

You forgot to add the bit about how you are being discriminated against as regards your visa... but nice try anyway give you 7/10 for creative thinking...

[Soutpeel]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

I often wonder if Abhisit, with him growing up in UK an Oxford education, sits down at night and thinks how this gang of morons ended up running the country...rice scams, money disappearing to HK, Plopadop with his water pushing machines etc

[rubl]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

Not that it really matters, but till now I only found this from 2011-09-07

"Ex-Prime Minister Thaksin, Yingluck's elder brother, initiated the mortgage programme and was followed by his two immediate successors. However, Abhisit Vejjajiva regime replaced it with a price insurance scheme which compensated cash if the market prices fell below certain benchmark prices.

A TDRI study indicated that the Thaksin government had faced a loss of 19.13 billion baht (about 0.638 U.S. dollars) from rice pledging in 2005/06, while the income guaranteed by the Abhisit regime recorded a loss of only about 7.38 billion baht (about 0. 246 U.S. dollars) in 2009."

http://news.xinhuane...c_131114064.htm

[bigbamboo]

Former prime minister Abhisit Vejjajiva has urged the government to provide a direct subsidy to farmers instead of continuing the loss-making rice-pledging scheme, as their incomes would then be improved without destroying the market mechanism.

In an interview with economic reporters on Monday, Abhisit said pledging could not increase farmers' incomes as the government buys rice at above-market prices.

Is there any record of how much rice pledging, if any, there was during the time when Abhisit was prime minister?

I often wonder if Abhisit, with him growing up in UK an Oxford education, sits down at night and thinks how this gang of morons ended up running the country...rice scams, money disappearing to HK, Plopadop with his water pushing machines etc

I wouldn't stop at Abhisit.....

[asiawatcher]

It does not take a statement from Abhisit to point out the stupidity of this scam. But because he did it is officially politicised.

But how stupid (arrogant) is this Govt to have opened a door to hungry competitors, by increasing the sale price thinking somehow Thai rice is in global demand, when there are plenty of others selling at more than USD100 a tonne less. Food id food and price dictates sales. These competitors are now scrambling taking out the market due to Thailand's arrogance, and yet Thailand is still throwing Billions of Baht at it, money that could perhaps be used for the nurses?

Either way this has to be the most ridiculous, most damaging scam, in Thai Govt policy history.

It is the fact that "rice" is just a staple, and with the size of the worlds crops, and Thailand's exports representing a piddling amount of global total, it would appear to have been proven that you can't hold the world to ransom on "quality" in such a commoditised product. No country wants to have to import rice. They treat importing rice as a necessity not a premium quality purchase and thus, they are cherry picking from the other suppliers at lower prices, knowing that at some point Thailand's glut will have to come to market way below the price which they paid.

It actually mirrors quite closely, how many domestic markets for all sorts of products operate in Thailand. Limit competition and supply, and charge what you want because you can. Unfortunately, the GLOBAL rice market doesn't get pushed around that easily. Now, if a large rice crop failed somewhere in the world it could push prices up feasibly, but they are peeing up a waterfall right now in terms of limiting supply in the global market.

Agree - yet another Thaksin gamble at the expense of Thai people.