U S Fear Over Thai Rice Dumping Is 'groundless'

[webfact]

US fear over Thai rice dumping is 'groundless'

PETCHANET PRATRUANGKRAI

THE NATION

BANGKOK: -- Commerce Minister Boonsong Teriyapirom yesterday vehemently defended the government's rice-pledging policy, saying it had not breached any commitment under the World Trade Organisation (WTO) as the measure was aimed solely at helping domestic farmers.

He also insisted that Thailand had no intention of dumping rice in the world market. To the contrary, it wants to push up rice prices to boost farmers' incomes, he said.

The comment came after the USA Rice Federation raised a concern with the US Trade Representative that it feared Thailand would eventually dump rice on the global market. The federation has also urged the WTO to investigate whether the rice-subsidy programme breached the Kingdom's obligations under the organisation.

"The Thai government has shown its clear stance that we want to raise farmers' incomes," Boonsong said. "The rice-pledging measure is a policy of the government that is only aimed at helping domestic farmers."

The minister stressed that Thailand had no intention of competing unfairly in the global rice market via any dumping tactic.

However, he warned, if foreign farmers or rice traders insisted on filing the case to the WTO, the Thai government was ready to provide information defending the policy and to explain it on the international stage.

Boonsong asked, if the government had aimed to dump rice, why had Thailand lost its status as the world's rice-export champion, slipping to third after Vietnam and India?

Moreover, he noted that the price of Thai rice had not dropped over the past year. In fact, compared with its competitors, the price of rice is quite high. However, the price of US rice is higher because of its higher production costs.

Boonsong added that Thailand's government-to-government rice contracts had not caused prices to drop. The G2G deals were agreed by both the selling and the buying country in line with the market price.

According to the Thai Rice Exporters Association, the price of Thai rice has gone up during the past week. As of Wednesday, 100-per-cent white rice was quoted at US$599 a tonne, up from $588 a week earlier. The price of 5-per-cent white rice rose from $571 to $583, and Thai jasmine rice increased from $1,143 to $1,148 a tonne.

The price of US 100-per-cent white rice is quoted at $620 a tonne. India's 5-per-cent white rice is traded at $450, while Vietnam's is $440 a tonne.

A senior source in the Commerce Ministry said Thailand's agricultural subsidy should not breach any WTO obligations. Thailand has the right to subsidise the agricultural sector by up to 7 per cent of the total value of farm products and commodities. The exact amount of subsidy would be very complicated depending on each crop's value, the source added.

-- The Nation 2012-10-20

[jaltsc]

"The Thai government has shown its clear stance that we want to raise farmers' incomes," Boonsong said. "The rice-pledging measure is a policy of the government that is only aimed at helping domestic farmers."

How come every time there is a program to raise the farmer's income, they wind up being poorer and the middle men (exporters) become richer? Just asking.

[moe666]

They said, "eventually dump rice" not now but later when the warehouses are full and no place else to store it. Got to put that expensive stuff some place.

[Pib]

"The Thai government has shown its clear stance that we want to raise farmers' incomes," Boonsong said. "The rice-pledging measure is a policy of the government that is only aimed at helping domestic farmers."

How come every time there is a program to raise the farmer's income, they wind up being poorer and the middle men (exporters) become richer? Just asking.

Oh, you (and me) just don't understand..it's too complicated. Like in the last paragraph of the article where a senior source in the Commerce Ministry said: "....subsidy would be very complicated..."

So, don't blame the government...we need to blame ourselves for not understanding how the rice pledging scheme really works.

[Psych01]

If it's not oil or nukes, it's rice! Now the bad omen too.

[farang000999]

I don't understand what the USA rice farmers are upset about? Price instability? Obviously if the Thais are selling less rice today then they are producing, it means the USA rice farmers are earning more for their rice today than they would otherwise. It would seem prices, while more unstable, should even out over the long run.

[Thai at Heart]

We aren't dumping it, just selling it at a big loss.

[Pib]

I don't understand what the USA rice farmers are upset about? Price instability? Obviously if the Thais are selling less rice today then they are producing, it means the USA rice farmers are earning more for their rice today than they would otherwise. It would seem prices, while more unstable, should even out over the long run.

The comment came after the USA Rice Federation raised a concern with the US Trade Representative that it feared Thailand would eventually dump rice on the global market.

Based on above quote, my guess is the USA Rice Federation (i.e., rice producers in the U.S.) feel Thailand will eventually overtly or covertly dump rice on the world market to partially cover the cost of the rice pledging scheme and free up some storage places for the next crop coming in. They probably have a valid concern because it seems most every thing I read about this scheme is the govt is finding it hard to find buyers for the rice, regardless of the flowery words from the govt.

[theajarn]

Well... if the scheming Thais can get away with it...

Seriously, what next? Dumping prostitutes?

[chingching]

Any interference in the free market whether pro farmer or pro middleman, pro domestic or pro foreign, is going to distort prices. By keeping the price high for the existing farmers, only encourages them to stay in the business, this year and next year, and maybe encourage more people to start growing rice, which all together will make the matter worse the next year. Let the free market work, and some farmers will surely suffer a loss, then next year, maybe they will grow soybeans, or maybe just starve to death, so then next year there will be fewer farmers and the remaining ones will each get a bigger piece of the pie.

The U.S.A. certainly has no right to talk about subsidies to farmers. The u.s. heavily subsidizes various crops and livestock.

[chooka]

Well... if the scheming Thais can get away with it...

Seriously, what next? Dumping prostitutes?

oh please no not the over used worn out Thai prostitutes.

[tim armstrong]

Any interference in the free market whether pro farmer or pro middleman, pro domestic or pro foreign, is going to distort prices. By keeping the price high for the existing farmers, only encourages them to stay in the business, this year and next year, and maybe encourage more people to start growing rice, which all together will make the matter worse the next year. Let the free market work, and some farmers will surely suffer a loss, then next year, maybe they will grow soybeans, or maybe just starve to death, so then next year there will be fewer farmers and the remaining ones will each get a bigger piece of the pie.

The U.S.A. certainly has no right to talk about subsidies to farmers. The u.s. heavily subsidizes various crops and livestock.

I couldn't agree more. US farmers just don't have a good track record on monopolising markets or trying t freeze others out by other means, ie beef, GM vegetables. Also seed patents by agrochemical companies. Not too mention pharmaceuticals, etc, etc

[Ricardo]

The minister stressed that Thailand had no intention of competing unfairly in the global rice market via any dumping tactic.

Although the Big Boss talks openly of manipulating the global market for the next two or three years, the minister is still correct, in that he & PM-Yingluck haven't yet been brought to the point, where they will have to sell at/below their cost-price.

But that point is rapidly approaching, as the claimed government-to-government contracts fail to be shipped out, and the warehouses become 100% full. At which the space can only be cleared by selling existing-stocks at/below world prices, or stopping buying from the poor farmers, at any price.

Expect further claims from the millers & middle-men, that much as they would like to pay the government's B15,000 per-ton at the mill/warehouse-gate for the new crop, the current lack-of-storage or the moisture-level of the rice offered mean that they can regretfully only offer a lower-than-guaranteed price. So sad ... but take it or leave it, suckers !

The Americans are merely pointing out the obvious, that this point may come quite soon, and dumping will then be forced upon the Thai government.

Of course if the government-to-government contracts do exist, the Thai government can calm markets by releasing full-details of contracts/purchasers/prices/shipment-dates which the purchasers will then confirm. Until then their reluctance to release details suggests that the contracts are not as broadly claimed.

[GentlemanJim]

From the OP

"However, he warned, if foreign farmers or rice traders insisted on filing the case to the WTO, the Thai government was ready to provide information defending the policy and to explain it on the international stage."

Now there is an offer just too good to refuse. Someone somewhere please file the case with the WTO and lets see how these slimeballs stand up to questioning by their intelligent savvy counterparts on the 'international' stage. That would make 'must watch Television'. Bring it on !'

[hellodolly]

We aren't dumping it, just selling it at a big loss.

Yes they say the recent government to government sale was done at market value. That means they sold it at a lower cost than they paid for it.

If the farmers are making so much more money because of this scheme why did they have to be given a credit card?

[hellodolly]

Any interference in the free market whether pro farmer or pro middleman, pro domestic or pro foreign, is going to distort prices. By keeping the price high for the existing farmers, only encourages them to stay in the business, this year and next year, and maybe encourage more people to start growing rice, which all together will make the matter worse the next year. Let the free market work, and some farmers will surely suffer a loss, then next year, maybe they will grow soybeans, or maybe just starve to death, so then next year there will be fewer farmers and the remaining ones will each get a bigger piece of the pie.

The U.S.A. certainly has no right to talk about subsidies to farmers. The u.s. heavily subsidizes various crops and livestock.

Not really subsidize them just give them a pile of money to not grow any thing. That also helps them to cut down on the labor costs.

[Gweiloman]

I know next to nothing about farming but if I remember correctly, a lot of European farmers (especially Swiss) are heavily subsidised by their respective governments?

[noitom]

They say that their "intentions" are to raise income for the farmers. if this were true, "they" would step aside and cut the skim and cluster of folks in the middle. "They," the government and the crony middlemen should step aside and find honest work. "They" should stop passing flatulence around.

[rubl]

Boonsong asked, if the government had aimed to dump rice, why had Thailand lost its status as the world's rice-export champion, slipping to third after Vietnam and India?

Moreover, he noted that the price of Thai rice had not dropped over the past year. In fact, compared with its competitors, the price of rice is quite high. However, the price of US rice is higher because of its higher production costs.

Boonsong added that Thailand's government-to-government rice contracts had not caused prices to drop. The G2G deals were agreed by both the selling and the buying country in line with the market price.

Three paragraphs, three questions.

Q1. Thailand lost it's status as rice-export champion on purpose?

Q2. Drop in export position planned with price setting to high level?

Q3. Any details on the G2G deals and the prices set, or still 'data too sensitive to open up on, believe me on my cute brown eyes that all is right and correct' ?

[sfbandung]

Any interference in the free market whether pro farmer or pro middleman, pro domestic or pro foreign, is going to distort prices. By keeping the price high for the existing farmers, only encourages them to stay in the business, this year and next year, and maybe encourage more people to start growing rice, which all together will make the matter worse the next year. Let the free market work, and some farmers will surely suffer a loss, then next year, maybe they will grow soybeans, or maybe just starve to death, so then next year there will be fewer farmers and the remaining ones will each get a bigger piece of the pie.

The U.S.A. certainly has no right to talk about subsidies to farmers. The u.s. heavily subsidizes various crops and livestock.

I couldn't agree more. US farmers just don't have a good track record on monopolising markets or trying t freeze others out by other means, ie beef, GM vegetables. Also seed patents by agrochemical companies. Not too mention pharmaceuticals, etc, etc

+1. The US and the EU con all manner of governments into so called trade agreements and then blatantly, and unapologetically, subsidise their own agricultural sectors. It is typical of the US to then cry foul if there is even a perception of another government doing the same. Australia in particular has long been a victim of playing by the rules in an uneven playing field.

The free market, Adam Smith's "invisible hand" as it were, should be allowed to prevail. However it is naive in the extreme to think that this will ever happen on a global scale.