Exporters Shift To Non-Thai Rice: Special Report

[Halion]

Arrogance ,greed and ignorance coming home to roost.

[GarryP]

I can't help but think that in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Edited January 14, 2013 by GarryP

[MunterHunter]

Here I am, the 30th poster, and yet not one supporter of this amazing scheme has dropped by to praise the creator and mastermind behind it.

How can this be?

Please, someone from the other side of the fence please lend a hand here and justify this madness.

Where's righteous? Where's hugo6? Where's g'kid?

Its a totaly fantastic deal! It was promised by the PM during her glourious election campaign and its made a few people very very rich! Bravo! Where do i sign up for next years pledge?

[siampolee]

Where's righteous? Where's hugo6? Where's g'kid?

One is also inclined to ask where that other very prominent supporter of the rice pledging scam scheme 473geo is as well Perhaps blown away with the rice chaff?

.

Edited January 14, 2013 by siampolee

[dcutman]

I can't help but in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Did you to actually think for one minute, that the PTP designed this scheme scam for sole benefit of the poor farmer? And give a sh!t what the long term negative effect will be on those poor farmers? Edited January 14, 2013 by dcutman

[GentlemanJim]

I hope the US and indeed the UN are closely observing this 'operation' which is nothing more than large scale international money laundering.

[monkeycountry]

What does this mean: "Only a few companies, which enjoy close connections with the government, can trade rice at a low cost and not suffer tremendously from the high pledging price, a source said." ????

Are they getting free rice?

Free or cheap yes - afterall neither the buyer nor the seller (the PTP) have to shoulder the cost. It has all been paid by the taxpayers. All the buyer and the seller (the PTP) have to do is decide how to split the profit.

[GarryP]

I can't help but in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Did you to actually think for one minute, that the PTP designed this scheme scam for sole benefit of the poor farmer? And give a sh!t what the long term negative effect will be on those poor farmers?

It was done for votes, as are most populist schemes. However, if down the road the farmers start to suffer, which party is going to suffer at the polls as a result. I do not think that PTP has thought the scheme through as thoroughly as it should have. Hopefully, it will come back to bite PTP in the bum.

[dcutman]

Here I am, the 30th poster, and yet not one supporter of this amazing scheme has dropped by to praise the creator and mastermind behind it.

How can this be?

Please, someone from the other side of the fence please lend a hand here and justify this madness.

Dont worry, they will be along shortly, demanding absolute proof and about how Abhisit is a murderer.

[FarangTalk]

None of the Thais I have spoken to about this will believe it.

They just repeat that Thai rice is the best in the World and as far as they're concerned that's all there is to do about it.

[dcutman]

I can't help but in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Did you to actually think for one minute, that the PTP designed this scheme scam for sole benefit of the poor farmer? And give a sh!t what the long term negative effect will be on those poor farmers?

It was done for votes, as are most populist schemes. However, if down the road the farmers start to suffer, which party is going to suffer at the polls as a result. I do not think that PTP has thought the scheme through as thoroughly as it should have. Hopefully, it will come back to bite PTP in the bum.

The only thing the PTP can think through thoroughly is where and how to hide all this state money they are stealing.

This will not bite them one bit in the next election, because they are going to have an even bigger more attractive scheme to buy the voters, plus the usual B500.

Edited January 14, 2013 by dcutman

[Skywalker69]

Sad

Tragic

Devastating

Shameful

Embarassing

Idiotic

Criminal

What? Thaksin........ or his rice pledging scheme?

Both.

[mrtoad]

Where's righteous? Where's hugo6? Where's g'kid?

One is also inclined to ask where that other very prominent supporter of the rice pledging scam scheme 473geo is as well Perhaps blown away with the rice chaff?

.

probably getting their orders from Dubai at present.

[Thait Spot]

I can't help but in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Did you to actually think for one minute, that the PTP designed this scheme scam for sole benefit of the poor farmer? And give a sh!t what the long term negative effect will be on those poor farmers?

It was done for votes, as are most populist schemes. However, if down the road the farmers start to suffer, which party is going to suffer at the polls as a result. I do not think that PTP has thought the scheme through as thoroughly as it should have. Hopefully, it will come back to bite PTP in the bum.

Who's bum in particular?

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[GarryP]

I can't help but in the long run it is the farmer who is going to suffer. The person who this pledging scheme was "supposed" to benefit. Once the market for Thai rice is totally screwed and the pledging scheme ends, the farmers will not be able to give the stuff away let alone sell it.

Did you to actually think for one minute, that the PTP designed this scheme scam for sole benefit of the poor farmer? And give a sh!t what the long term negative effect will be on those poor farmers?

It was done for votes, as are most populist schemes. However, if down the road the farmers start to suffer, which party is going to suffer at the polls as a result. I do not think that PTP has thought the scheme through as thoroughly as it should have. Hopefully, it will come back to bite PTP in the bum.

Who's bum in particular?

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

The father in Pater Thaksin's Party.

[Robby nz]

Now the Japanese PM has been to TL wait for the announcment of a Govt to Govt sale to Japan.

[seminomadic]

Sad to see the price being paid by the Thai people for the benefit of a bail jumping convicted criminal,and his followers, namely his family and their brown nosing acolytes.

I'm not sure I understand this all as being TS's fault. Rice farmers were farming rice before TS-era (ie 2001). They got more money under Thaksin and were glad. They want to make more money just like we all do. They like and re-vote-in this scheme where they get more money for doing what they've done their whole lives.

From the POV of, "well, it was inflated so rice peeps started living beyond their means, and that's unsustainable" or "it incentivizes unsustainable capital re-investment", ok, I agree that's not good but that's not TS's fault they do that with their money, but ultimately, he's still spreading some measure of increased wealth around to *working* have-nots.

My question is: is it fair to say he's ruining the rice industry because he gave more money to people for X number of years to do what they've always done? Unsustainable, it seems, yes, but ruinous (at the risk of appearing to put words in anyone's mouth, not my intention).... well ... I'd like to understand why it's considered so bad.

Disclaimer: I don't like the Shinawatras. I'm asking because I'd earnestly like to understand how the rice-pledging scheme is not simply unsustainable rather than anything worse.

[Bluespunk]

The ineptness of those who dreamed up this scheme is staggering. Every time I read about the latest catastrophic fall out from this scheme I think " who could have been so stupid to think this was a good idea?" . It is almost criminal in its scale and economic morancy and the legacy of this scheme is almost too nightmarish to contemplate.

Edited January 14, 2013 by Bluespunk

[GentlemanJim]

Sad to see the price being paid by the Thai people for the benefit of a bail jumping convicted criminal,and his followers, namely his family and their brown nosing acolytes.

I'm not sure I understand this all as being TS's fault. Rice farmers were farming rice before TS-era (ie 2001). They got more money under Thaksin and were glad. They want to make more money just like we all do. They like and re-vote-in this scheme where they get more money for doing what they've done their whole lives.

From the POV of, "well, it was inflated so rice peeps started living beyond their means, and that's unsustainable" or "it incentivizes unsustainable capital re-investment", ok, I agree that's not good but that's not TS's fault they do that with their money, but ultimately, he's still spreading some measure of increased wealth around to *working* have-nots.

My question is: is it fair to say he's ruining the rice industry because he gave more money to people for X number of years to do what they've always done? Unsustainable, it seems, yes, but ruinous (at the risk of appearing to put words in anyone's mouth, not my intention).... well ... I'd like to understand why it's considered so bad.

Disclaimer: I don't like the Shinawatras. I'm asking because I'd earnestly like to understand how the rice-pledging scheme is not simply unsustainable rather than anything worse.

I will give you the benefit of the doubt, but I am unsure where you have been for the last 12 months. What part of "the money is going nowhere near the rice farmers' don't you understand? What bit don't you understand about the mill owners taking all the money, so greedy in fact they have been importing cheap Vietnamese and Malaysian rice, re-bagging it and submitting it under the rice pledging scheme. What bit don't you grasp about the normal rice exporters are unable to get rice at a low enough price to export and therefore sustain the industry, the only exports being through 'Newly established' ghost companies exporting up to 20 Billion worth of rice, but not one bag of rice moving? Thaksin is using this scheme to bankrupt the country. He is very well known for his vindictive nature and he will take his confiscated money back 100 fold and when Thailand is on its knees at the ass end of ASEAN he will offer to step back in and save the nation!

[Mudcrab]

You know, sometimes when I read stories like the OP and the post above, I feel glad that living here I can choose to pull my ace out of my sleeve, and that is not to turn the news on TV, don't buy a paper, turn off the computer and live in the happy ignorant bliss that I do.

Jim,

I think quite a few Thais spend a lot of their life in that same mode. Unfortunately it is the same reason the country is the way it is: lack of practical understanding of ensuring things are done in the best interests of the country.

Sadly for us, your practical knowledge does not count: you were born speaking the wrong tongue and without a master.

IMHO the first sentence is the reality of the situation:

"I think quite a few Thais spend a lot of their life in that same mode. Unfortunately it is the same reason the country is the way it is: lack of practical understanding of ensuring things are done in the best interests of the country."

It seems to divide into two camps:

- A large percentage of farmers and their families (with all respect to them) who are easily manipulated mostly because they are simply unaware of the big picture.

- A very large percentage of those in paid regular employment, who spend most of their time thinking and worrying about surviving tomorrow, they simply don't have the luxury of being able to set out a plan for next year, etc.

maybe , maybe not. My Mrs and her family sell their rice locally for (I think) 30 Baht a kilo becuase Yingluck is offering only 20 Baht a kilo. I might have the exact figures wrong but the relativities are correct. They are also aware of the corruption involved in the rice scheme and the governement in general but have had the foresight to buy a rice harvester and make more money from that than actually growing rice. They do not have enough hours in the day to harvest all of the rice required by the locals so are in the process of buying another harvetser for next season. Not all rice farmers are dumb hicks.

[dcutman]

Rice is not much different than anything else. Its called market share. When you have top dog status you fight with everything you have to keep it. For years customers happily payed a bit more for Thai rice. But they will not pay that much more these days and are going to other countries that have pored millions of dollars in improving there rice quality. Now these countries are gaining the market share and most likely will keep it. Now instead, the Thai farmers rice will not be getting that premium and will have to settle for lower prices just to stay in the game. You getting the picture now?

Do you think anybody other than Thaksin thought this scam up? , if you read post #15 all these companies mentioned are TS's good old buddies.

All the millers and huge rice operations making fortunes right now. They are connected to this family or to the other government official one way or another.

Edited January 14, 2013 by dcutman

[Thai at Heart]

Rice is not much different than anything else. Its called market share. When you have top dog status you fight with everything you have to keep it. For years customers happily payed a bit more for Thai rice. But they will not pay that much more these days and are going to other countries that have pored millions of dollars in improving there rice quality. Now these countries are gaining the market share and most likely will keep it. Now instead, the Thai farmers rice will not be getting that premium and will have to settle for lower prices just to stay in the game. You getting the picture now?

Do you think anybody other than Thaksin thought this scam up? , if you read post #15 all these companies mentioned are TS's good old buddies.

All the millers and huge rice operations making fortunes right now. They are connected to this family or to the other government official one way or another.

Checked with a couple of guys in work today. Their families have sold at 15k per ton near udon since the policy has been in effect.

Can't speak for the rest of the market, but that is what they told me.

[backtonormal]

"Rice trading is now considered a 'sunset' industry because of the high costs, low margins and intervention by the government," Chookiat Ophaswongse

So when Thaksin has achieved his goal of bankrupting Thai Rice Exporters Association, members (Amart) and takes over. what will he do with 10 million tons of rotting rice?

At last you are starting to see what is going on in this country. Now Thaksin is one smart cookie and so far he has run the amart ragged and if you think he is just going to dump millions of tonnes of rice, please think again..you can guarantee hes got that based covered

[dcutman]

Rice is not much different than anything else. Its called market share. When you have top dog status you fight with everything you have to keep it. For years customers happily payed a bit more for Thai rice. But they will not pay that much more these days and are going to other countries that have pored millions of dollars in improving there rice quality. Now these countries are gaining the market share and most likely will keep it. Now instead, the Thai farmers rice will not be getting that premium and will have to settle for lower prices just to stay in the game. You getting the picture now?

Do you think anybody other than Thaksin thought this scam up? , if you read post #15 all these companies mentioned are TS's good old buddies.

All the millers and huge rice operations making fortunes right now. They are connected to this family or to the other government official one way or another.

Checked with a couple of guys in work today. Their families have sold at 15k per ton near udon since the policy has been in effect.

Can't speak for the rest of the market, but that is what they told me.

I think you mistakenly replied to the wrong post, but I am assuming these families you speak of are selling Jasmine rice at 15k a ton, witch would be about right, docking the price at the scale for moisture content, and fodder.

Govt pledge 15k baht for white rice and 20k baht fore jasmine rice, deduction for moisture content over 15%.

[caughtintheact]

This is called the "New Economic Way" or N.E.W. for short. In Thai you could call it the Niew Klang policy (นิ้วกลาง). It uses the principles of Buy High, Sell Low and claim you will make a profit, while knowing that the long term result will be losses and inflation with only a select group, unnamed in the policy) to benefit.

It ignores the laws of supply and demand. It is another case of government manipulation of markets, that is allegedly for the purpose of benefiting a specific group (rice farmers) without any consideration or care for the impact on everyone else (except those who will gain the most and those are not the farmers), including the target group (rice farmers). It mis-allocates resources that have alternate uses, and does not consider the long term impacts on all groups.

seminomadic : This is nothing more than a the government declaration of war on the laws of economics. It is true that rice farmers have gotten short term price increases for their crops, but like just about every government policy, almost no one looks past that immediate benefit. The consequences we are seeing now were not only predictable but were predicted.

When a country unilaterally tries to force up prices on world markets, all it takes is an increase of supply from other countries (India, Vietnam) to change the price signals to the markets. The prices signals go from "low supply, high demand, higher prices" to "high supply, lower demand, lower prices". Simply put, why should any rice importer in any other country pay a higher price, if it can get a lower price and knows it?

Since we have seen here that the pledging scheme has caused higher rice prices in Thailand; and since we know that rice farmers are not the only poor people in Thailand, doesn't the increased price of rice mean that the pledging scheme is hurting other poor people? Doesn't it make everyone living in Thailand a bit poorer because they have to pay more for rice, and thus have less money for other things? And it affects you even if you don’t eat rice.

In terms of the rice stocks in warehouses, we are starting to see some of the impacts now. The rice may or may not rot before it can be sold, but isn't the point that if it does not rot and can be sold, it will cause an increase of supply next year? An increase in supply without an increase in demand means prices should fall, and the government is saying it wants to extend the pledging scheme to next year, which will mean that rice exporters will have the same problem next year, only worse, because Thailand's credibility will be lower. The government wants to pay farmers high prices next year and if the exporters are losing money now, they might stop exporting. Then what happens? As the old adage goes, doing the exact same thing over and over again and expecting different results is insanity.

In fact when government policies cause prices to increase in the local market, it is called inflation. Inflation is a tax. So by manipulating the price of rice, the government has in fact levied a tax on all the people without passing any new tax laws. See the benefit? Eureka! A new (stealth) tax!! And it's free!! Yea Yea! (sarcasm).

Another way to say this is that governments love to screw all the poor in the long term by helping its favorite poor group in the short run.

[bumpkin]

I thought the reason that foreign companies weren't allowed to operate in the agriculture industry was that Thai companies weren't ready or capable to compete, yet they are apparently large enough to set up operations in neighbouring countries.

Surely some contradiction here?

Not really, I think that originally this was aimed at Europeans/US companies with higher efficiency and therefore would out compete the Locals. However these companies that went to set up operation outside are probably using the neighbouring countries, and therefore would possibly be more efficient than the locals. Myanmar for example, has just open up, a ripe target there I would think.

So are they big enough now to compete?

Size isnt everything . . . its how efficiently you use what you have, that really matters.

[backtonormal]

The real price of popularism is being revealed bit by bit, by the time the people see the full cost as its effect becomes obvious to them and the country as a whole, the damage may be too much to reverse in the short term, I wonder who they will blame when it comes time to point fingers?

There is of course the possibility that it's all a long-term strategy of the 'get real rich real quick club':

- Drain off as much as you possibly can and quickly, and run up massive debt, then lose an election and pass the total mess to the opposition who cannot fix it all quickly and have to stop lots of populist items to try to fix the economy and pay off loans etc, then criticize the opposition for that, then reoffer popular policies and win and start draining it all again.

After "lose the election" I knew there was no sense in this post. Dems not been elected for 20 years. Give head a wobble lad

[Thai at Heart]

I thought the reason that foreign companies weren't allowed to operate in the agriculture industry was that Thai companies weren't ready or capable to compete, yet they are apparently large enough to set up operations in neighbouring countries.

Surely some contradiction here?

Not really, I think that originally this was aimed at Europeans/US companies with higher efficiency and therefore would out compete the Locals. However these companies that went to set up operation outside are probably using the neighbouring countries, and therefore would possibly be more efficient than the locals. Myanmar for example, has just open up, a ripe target there I would think.

So are they big enough now to compete?

Size isnt everything . . . its how efficiently you use what you have, that really matters.

Well, i would conclude that when they become multinationals, that would mean they are more than big enough to compete.

[AleG]

There is of course the possibility that it's all a long-term strategy of the 'get real rich real quick club':

- Drain off as much as you possibly can and quickly, and run up massive debt, then lose an election and pass the total mess to the opposition who cannot fix it all quickly and have to stop lots of populist items to try to fix the economy and pay off loans etc, then criticize the opposition for that, then reoffer popular policies and win and start draining it all again.

After "lose the election" I knew there was no sense in this post. Dems not been elected for 20 years. Give head a wobble lad

Of course you don't realize it, but you just proved his point.

[ratcatcher]

You know, sometimes when I read stories like the OP and the post above, I feel glad that living here I can choose to pull my ace out of my sleeve, and that is not to turn the news on TV, don't buy a paper, turn off the computer and live in the happy ignorant bliss that I do.

Jim,

I think quite a few Thais spend a lot of their life in that same mode. Unfortunately it is the same reason the country is the way it is: lack of practical understanding of ensuring things are done in the best interests of the country.

Sadly for us, your practical knowledge does not count: you were born speaking the wrong tongue and without a master.

IMHO the first sentence is the reality of the situation:

"I think quite a few Thais spend a lot of their life in that same mode. Unfortunately it is the same reason the country is the way it is: lack of practical understanding of ensuring things are done in the best interests of the country."

It seems to divide into two camps:

- A large percentage of farmers and their families (with all respect to them) who are easily manipulated mostly because they are simply unaware of the big picture.

- A very large percentage of those in paid regular employment, who spend most of their time thinking and worrying about surviving tomorrow, they simply don't have the luxury of being able to set out a plan for next year, etc.

maybe , maybe not. My Mrs and her family sell their rice locally for (I think) 30 Baht a kilo becuase Yingluck is offering only 20 Baht a kilo. I might have the exact figures wrong but the relativities are correct. They are also aware of the corruption involved in the rice scheme and the governement in general but have had the foresight to buy a rice harvester and make more money from that than actually growing rice. They do not have enough hours in the day to harvest all of the rice required by the locals so are in the process of buying another harvetser for next season. Not all rice farmers are dumb hicks.

Let's just hope that the demand for Thai rice continues in order that your Mrs and her family can utilize their new rice harvesters optimally, this year and next and next etc etc..

OTOH consider building a few storage silos as well.