How Rice Is Causing A Crisis In Thailand

[webfact]

How Rice is Causing a Crisis in Thailand

By Steve Finch

After years as the world's top rice exporter, Thai PM Yingluck Shinawatra's populist policies are causing serious problems.

NAKHON PHANOM: -- As the elected senator of northeastern Nakhom Phanom province, Dr. Vitthaya Inala is in a difficult position.

The majority of his roughly 750,000 constituents, many of them poor paddy farmers, are in full support of a year-old government scheme that promises them 15,000 baht ($488) per ton of white rice, he says, far more than they earned in the past.

“If this is a success, and poor farmers get the benefits, it will be very good for the Thai people,” says Dr. Vitthaya. Except the government’s rice-pledging policy is already proving to be a monumental failure, he adds.

Last week, the Senate Committee on Economics, Commerce and Industry, of which Dr. Vitthaya is vice-chairman, filed a damning report blaming the scheme over rampant corruption and a rising mountain of debt as big as the piles of unsold rice fill warehouses across Thailand. A populist policy that was part of the platform propelling the relative unknown Yingluck Shinawatra to power last May, the scheme now threatens to severely damage the government. Some say it could even bring the Prime Minister’s coalition down. [more...]

Full story: http://thediplomat.c...-rice-exporter/

-- The Diplomat 2012-11-13

[bhakta]

While the plight of small farmers is pathetic, this system of buying rice for more than it can be sold for in the public markets will bankrupt Thailand's government. There must be some better way?

[Crushdepth]

Another win for the government's "economic dream team". Go team!

Edited November 13, 2012 by Crushdepth

[JurgenG]

We have the same problem in Europe because of the bloody French. But to be honest America is doing the same to protect their rich farmers.

I think it's a curse for all the nations that praise themselves as agricultural nations

[BeforeTigers]

Is that what votes are going for these days?

This system is quite a bit different from the system in the States, though.

It's a subsidy, yes. But, as far as I can tell, the motivation and the mechanism for profit guarantee aren't much alike.

[gosompoi]

America gives low interest loans then forgives the loans and offers new loans to subsidize the farmers along with tax credits. At least it does go directly to farmers but there too there is corruption and cheats taking advantage of the system.

[Crushdepth]

America gives low interest loans then forgives the loans and offers new loans to subsidize the farmers along with tax credits. At least it does go directly to farmers but there too there is corruption and cheats taking advantage of the system.

Probably not corruption on this scale though.

[Soupdragon]

This whole fiasco is a case of those that matter don't care and those that care don't matter.

[bangkokburning]

Sorry, I tried buy could not initiate the post here✘

[Pib]

Another win for the government's "economic dream team". Go team!

Looks like this populist dream is quickly turning into a budget nightmare. About time the govt pinched themselves and woke-up; but they probably won't until they get smacked hard...but it won't be the rice farmers or millers doing the smacking....they will just continue to sing to the govt to continue their sweet dream.

[rakman]

America gives low interest loans then forgives the loans and offers new loans to subsidize the farmers along with tax credits. At least it does go directly to farmers but there too there is corruption and cheats taking advantage of the system.

More often, farmers are paid NOT to grow certain crops to keep the price high on the crop. Lots of room for corruption that way, too.

[jonclark]

Another win for the government's "economic dream team". Go team!

Looks like this populist dream is quickly turning into a budget nightmare. About time the govt pinched themselves and woke-up; but they probably won't until they get smacked hard...but it won't be the rice farmers or millers doing the smacking....they will just continue to sing to the govt to continue their sweet dream.

The government is up to its neck in s**t in this one. They have defended this policy so aggressively and vociferously and really dug their heels in, that to backtrack on this, and thereby un-promise a populist policy , which is targeted at their core voter base could lead the unraveling of the government and would be a monumental loss of face and confidence.

If PTP stops this policy, its an admission of failure and that loss of face can never happen. Especially given the PTP election slogan "Thaksin Thinks PT does"

As far as i see it there are two ways out - both are highly unlikely and will result in misery for thousands of people

1) a natural catastrophe (drough, flood etc) destroys vast areas of rice paddy in other countries and demand for Thailand's stockpiles sky rockets

2) a coup - The military press the reset button, end the policy and PTP return to power two years down the line.

I don't believe those GtoG deals are a viable way forward as most of the counties (Indonesia, Ivory Coast, Philipines) are generally less developed and as such have less budget to spend on high end rice crops - These countries need to feed their people as cheaply as possible as they have very large populations and per head governmental income from tax is quite low.

[wprime]

While the plight of small farmers is pathetic, this system of buying rice for more than it can be sold for in the public markets will bankrupt Thailand's government. There must be some better way?

The Thai government spent decades stealing from small rice farmers, it is about time they started paying something back.

Edited November 13, 2012 by wprime

[belg]

thai economics, an oxymoron ?

[LomSak27]

Good to know if its done some other place in the world (amerika, EU), then it must be ok

[Chupup]

you got what you were paid for

[PaulHamon]

We have the same problem in Europe because of the bloody French. But to be honest America is doing the same to protect their rich farmers.

I think it's a curse for all the nations that praise themselves as agricultural nations

was the same in oz for wool 20 years ago... that was a disaster.

[tawonsri]

Another win for the government's "economic dream team". Go team!

Emphasizing DREAM team ... they are dreamers indeed.

[caughtintheact]

America gives low interest loans then forgives the loans and offers new loans to subsidize the farmers along with tax credits. At least it does go directly to farmers but there too there is corruption and cheats taking advantage of the system.

Probably not corruption on this scale though.

What do you think lobbying is? It is legalized corruption paying back the politicians for lergislating the subsidies, and who do you think pays the farmers' lobbyists? How do you think American politicians get rich? There is no such thing as a free lunch, and if you think it is worse here, try multiplying the amount of "campaign contributions" by about 31.

Edited November 15, 2012 by caughtintheact