Thai Govt Will Not Heed Warnings On Rice Subsidy Scheme

[webfact]

EDITORIAL

Govt will not heed warnings on rice subsidy scheme

The Nation

A rice warehouse in Samut Prakan province on the outskirts of Bangkok.

BANGKOK: -- Debt levels are rapidly increasing as a result of price pledges to farmers, which have not been shown to benefit either them or Thai consumers

Former deputy prime minister MR Pridiyathorn Devakula has issued a warning about rising public debt as a result of the rice-price subsidy policy. The government has accumulated a high deficit because of the price-subsidy scheme, which has not been shown to improve the living standard of Thai farmers or the competitiveness of Thai rice in export markets.

The government has been warned repeatedly about excessive debt because of its populist policies. The massive rice price-pledging policy will impose a severe burden on Thai taxpayers for years to come.

The expected loss from the government's rice scheme will accelerate the overall debt level. Pridiyathorn warned that the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019. In July the public debt/GDP ratio reached 44.2 per cent.

The rice price-pledging scheme has been a source of criticism of the Yingluck government from the start of its tenure. Critics argue that, first of all, the policy does not benefit the majority of farmers. Then there are questions about the effective use of taxpayers' money.

In addition, the rice programme - in which the government purchases rice from farmers at extraordinarily high prices - inflates the domestic rice price and erodes the competitiveness of Thai rice overseas.

The overall subsidy programme for the 2011-2012 harvest season, with a projected production of 21 million tonnes of paddy, is expected to reach Bt140 billion.

Previous editorials here have also pointed out that the subsidy programme discourages farmers from producing more and better rice because they can sell whatever they produce to the government regardless of quality.

The accumulative loss from the programme has raised new concerns about excessive public debt. If debt rises to an unsustainable level it will have an overall impact on the baht exchange rate.

The government has assessed losses from the rice-subsidy programme for the main crop of 6.95 million tonnes in the 2011-2012 harvest season at Bt32 billion. However, if it has to wait to release the entire stock over the next two years, the loss could reach Bt45 billion, a figure derived from interest costs together with degraded rice quality, weight reduction and maintenance costs.

It is unfortunate indeed that the government refuses to heed warnings from critics. It stubbornly ploughs ahead with the scheme because of Pheu Thai Party promises to its supporters, regardless of the cost to the nation.

The party promises Bt15,000 per tonne of rice, but in reality the Thailand Development Research Institute has shown that farmers receive only a small portion of that figure. Rice millers and investors, as usual, skim off most of the money from this scheme, which is paid for by taxpayers.

Thailand could experience a financial crisis if the government continues building up public debt and the already existing fiscal burden.

-- The Nation 2012-11-14

[Jimi007]

Maybe this failed policy will weaken the Baht...

Edited November 13, 2012 by Jimi007

[FOODLOVER]

Even one with a "masters", from Kentucky State could figure this one out.

[LuckyLew]

There is nothing wrong with this rice pledging scheme

The farmers get more money so they will vote PTP next election

Also since Thaksin says it is a good idea, it must be a great idea

Thaksin is so smart, he is great, he does everything with the people in mind

We should all bow to Thaksin ... he da man

[Buchholz]

Debt levels are rapidly increasing as a result of price pledges to farmers, which have not been shown to benefit either them or Thai consumers

The government has accumulated a high deficit because of the price-subsidy scheme, which has not been shown to improve the living standard of Thai farmers or the competitiveness of Thai rice in export markets.

The government has been warned repeatedly about excessive debt because of its populist policies. The massive rice price-pledging policy will impose a severe burden on Thai taxpayers for years to come.

the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019

The rice price-pledging scheme has been a source of criticism of the Yingluck government from the start of its tenure. Critics argue that, first of all, the policy does not benefit the majority of farmers. Then there are questions about the effective use of taxpayers' money.

The accumulative loss from the programme has raised new concerns about excessive public debt.

The government has assessed losses from the rice-subsidy programme for the main crop of 6.95 million tonnes in the 2011-2012 harvest season at Bt32 billion. However, if it has to wait to release the entire stock over the next two years, the loss could reach Bt45 billion, a figure derived from interest costs together with degraded rice quality, weight reduction and maintenance costs.

It is unfortunate indeed that the government refuses to heed warnings from critics. It stubbornly ploughs ahead with the scheme because of Pheu Thai Party promises to its supporters, regardless of the cost to the nation.

Disregard that iceberg. It can't hurt us.

.

Edited November 14, 2012 by Buchholz

[Soupdragon]

Rice millers and investors, as usual, skim off most of the money from this scheme, which is paid for by taxpayers.

Investors, who exactly are they. Foreign or domestic ?

I am not sure if it is possible but an audit of this whole scheme could prove to be very revealing as to where exactly the funds finish up and also why those calling the shots insist it continues.

[virtualtraveller]

By 2019, Thaksin won't care, he would have regained his money and power and retired and bought off every election for the rest of the century, so he can then use all the Dem voter's tax money to bring it down. This is, of course, if a fiscal crisis doesn't bring him and Yingluck down first.

[OzMick]

So true.

[Baloo22]

Rice millers and investors, as usual, skim off most of the money from this scheme, which is paid for by taxpayers.

Investors, who exactly are they. Foreign or domestic ?

I am not sure if it is possible but an audit of this whole scheme could prove to be very revealing as to where exactly the funds finish up and also why those calling the shots insist it continues.

Perhaps I'm just being pessimistic, but I see three options for an "an audit of this whole scheme":

Option 1: It never happens.

Option 2: An "audit" is done by a special government commission with members carefully selected by the Pheu Thai party.

Option 3: An "audit" is done by the Shinawatra Auditing Company, Ltd.

[SICHONSTEVE]

Rice millers and investors, as usual, skim off most of the money from this scheme, which is paid for by taxpayers.

Investors, who exactly are they. Foreign or domestic ?

I am not sure if it is possible but an audit of this whole scheme could prove to be very revealing as to where exactly the funds finish up and also why those calling the shots insist it continues.

Perhaps I'm just being pessimistic, but I see three options for an "an audit of this whole scheme":

Option 1: It never happens.

Option 2: An "audit" is done by a special government commission with members carefully selected by the Pheu Thai party.

Option 3: An "audit" is done by the Shinawatra Auditing Company, Ltd.

I'm sure that whichever of the three options is chosen that "there will be nothing wrong" - whats all the fuss about????

[Pimay1]

Govt will not heed warnings on rice subsidy scheme

Why should they? There are still billions of Baht that has not been stolen distributed yet.

[rubl]

The overall subsidy programme for the 2011-2012 harvest season, with a projected production of 21 million tonnes of paddy, is expected to reach Bt140 billion.

Late September 2011 the figures for the October th, 2011 till February 28th 2012 pledging season mentioned THB 400 billion. Then months later it seemed that amount for all types of produce price pledging. a few months ago it seemed only THB 260 billion or so to be used. Very confusing. Details may have been provided in this governments 'mission accomplished' report on their highly successful first year, but I seem to have missed that

[waza]

What a great scheme, it has made Thai rice so expensive that they now import cheaper rice from Vietnam and Cambodia for local consumption while the local stuff rots in warehouses. I wonder how big a pile of rotting rice it will take to trade for a fast train from China?

Edited November 14, 2012 by waza

[bigbamboo]

Could Cambodia's ex special economic advisor be a double agent?

[Pimay1]

What a great scheme, it has made Thai rice so expensive that they now import cheaper rice from Vietnam and Cambodia for local consumption while the local stuff rots in warehouses. I wonder how big a pile of rotting rice it will take to trade for a fast train from China?

I know you jest but that just might be a possibility. It was reported that Yingluck went to get the scoop on the high speed train in the UK. And with Wu showing up in Bangkok shortly it would fit right in.

[khunken]

Too difficult for Yingluck to make any changes to the scheme because it's her brother's baby. As for auditing it, you only have to look at Chalerm's fuzzy-eyed half-cocked 'investigation' into corruption within the scheme - to see how far that would go.

[ratcatcher]

By 2019, Thaksin won't care, he would have regained his money and power and retired and bought off every election for the rest of the century, so he can then use all the Dem voter's tax money to bring it down. This is, of course, if a fiscal crisis doesn't bring him and Yingluck down first.

Nice to have an optimist amongst us. By 2019 - just over six years away. IF he survives that long.

He has yet to appear in Thailand. Several teasing scheduled appearances but scared off by "assassination" theories.

No, he's safer tucked up in Dubai and free to travel the world until he dies.

IMHO the only thing that will bring him down will be travelling at high speed, and it won't be a car or train.

[softgeorge]

Maybe they are counting on the farang lands to buy the rice at the inflated prices and bail them out of thier mess.

[Mosha]

Maybe they are counting on the farang lands to buy the rice at the inflated prices and bail them out of thier mess.

So that's why she went to London.

[cooked]

None of the rice farmers in our village has access to this scheme; big land owners (like Thaksin for example) make millions out of this scheme. The whole cynical game only works as long as the people out here in Isaan don't understand what is going on. They will all be down in Bangkok for the next demonstration when told to do so.

[hellodolly]

The overall subsidy programme for the 2011-2012 harvest season, with a projected production of 21 million tonnes of paddy, is expected to reach Bt140 billion.

Late September 2011 the figures for the October th, 2011 till February 28th 2012 pledging season mentioned THB 400 billion. Then months later it seemed that amount for all types of produce price pledging. a few months ago it seemed only THB 260 billion or so to be used. Very confusing. Details may have been provided in this governments 'mission accomplished' report on their highly successful first year, but I seem to have missed that

As did they.

[kevvy]

they are saving the rice to it give away ..One bag of rice to every elite card sold ...

[hellodolly]

Too difficult for Yingluck to make any changes to the scheme because it's her brother's baby. As for auditing it, you only have to look at Chalerm's fuzzy-eyed half-cocked 'investigation' into corruption within the scheme - to see how far that would go.

Besides the Finance minister has assured us it is OK to lie to the public.

[BookMan]

All they need to fix the stockpile problem is a mice plague

[hellodolly]

None of the rice farmers in our village has access to this scheme; big land owners (like Thaksin for example) make millions out of this scheme. The whole cynical game only works as long as the people out here in Isaan don't understand what is going on. They will all be down in Bangkok for the next demonstration when told to do so.

That is because they need the money they will earn there.

[Gonzo the Face]

Debt levels are rapidly increasing as a result of price pledges to farmers, which have not been shown to benefit either them or Thai consumers

The government has accumulated a high deficit because of the price-subsidy scheme, which has not been shown to improve the living standard of Thai farmers or the competitiveness of Thai rice in export markets.

The government has been warned repeatedly about excessive debt because of its populist policies. The massive rice price-pledging policy will impose a severe burden on Thai taxpayers for years to come.

the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019

The rice price-pledging scheme has been a source of criticism of the Yingluck government from the start of its tenure. Critics argue that, first of all, the policy does not benefit the majority of farmers. Then there are questions about the effective use of taxpayers' money.

The accumulative loss from the programme has raised new concerns about excessive public debt.

The government has assessed losses from the rice-subsidy programme for the main crop of 6.95 million tonnes in the 2011-2012 harvest season at Bt32 billion. However, if it has to wait to release the entire stock over the next two years, the loss could reach Bt45 billion, a figure derived from interest costs together with degraded rice quality, weight reduction and maintenance costs.

It is unfortunate indeed that the government refuses to heed warnings from critics. It stubbornly ploughs ahead with the scheme because of Pheu Thai Party promises to its supporters, regardless of the cost to the nation.

Disregard that iceberg. It can't hurt us.

Nice piece of equipment. Was it brought up from the original 'Thai tanic' ?

[hellodolly]

leaving the economics out of it. I was a bit concerned about this statement

"Previous editorials here have also pointed out that the subsidy programme discourages farmers from producing more and better rice because they can sell whatever they produce to the government regardless of quality"

I am sure other nations are going to continue to seek out the best ways to grow it for the maximum profit. Like more ton's per rai.

Also be looking for ways to produce the best quality rice for those who seek quality.

[Skywalker69]

Debt levels are rapidly increasing as a result of price pledges to farmers, which have not been shown to benefit either them or Thai consumers

The government has accumulated a high deficit because of the price-subsidy scheme, which has not been shown to improve the living standard of Thai farmers or the competitiveness of Thai rice in export markets.

The government has been warned repeatedly about excessive debt because of its populist policies. The massive rice price-pledging policy will impose a severe burden on Thai taxpayers for years to come.

the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019

The rice price-pledging scheme has been a source of criticism of the Yingluck government from the start of its tenure. Critics argue that, first of all, the policy does not benefit the majority of farmers. Then there are questions about the effective use of taxpayers' money.

The accumulative loss from the programme has raised new concerns about excessive public debt.

The government has assessed losses from the rice-subsidy programme for the main crop of 6.95 million tonnes in the 2011-2012 harvest season at Bt32 billion. However, if it has to wait to release the entire stock over the next two years, the loss could reach Bt45 billion, a figure derived from interest costs together with degraded rice quality, weight reduction and maintenance costs.

It is unfortunate indeed that the government refuses to heed warnings from critics. It stubbornly ploughs ahead with the scheme because of Pheu Thai Party promises to its supporters, regardless of the cost to the nation.

Disregard that iceberg. It can't hurt us.

.

Full speed ahead, until the engine blows.

[Thai at Heart]

the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019

I was waiting for him to say 2014. An economic prediction 7 years out.

On average, by then we should have had 2 coups......

Can i ask him where the us debt to gdp ratio will be by 2019 also?

Edited November 14, 2012 by Thai at Heart

[Skywalker69]

the kingdom's public debt could rise to 61 per cent of gross domestic product by 2019

I was waiting for him to say 2014. An economic prediction 7 years out.

On average, by then we should have had 2 coups......

Can i ask him where the us debt to gdp ratio will be by 2019 also?

If the Government goes on like they have done the last 1,5 years (almost) there won´t be any money left to spend 2019.