Thai Govt's Rice-Pledging 'will Change'

[webfact]

RICE
Rice-pledging 'will change'
Petchanet Pratruangkrai
The Nation

BANGKOK: -- The government cannot avoid making amendments to the rice-pledging scheme, though it abruptly cancelled today's meeting of the National Rice Policy Committee (NRPC), rice exporters and academics said.

Technical problems involved with the scheme, including huge costs and limited warehouse space, will eventually force the government to introduce some changes, they said.

Commerce Minister Boonsong Teriyapirom yesterday said the NRPC would not convene today, as earlier announced by the ministry's permanent secretary Vatchari Vimooktayon. She said on Wednesday that the pledging price for white paddy rice would be cut from Bt15,000 to Bt13,000 or Bt14,000 for April's second-crop harvest season. Vatchari said a revision of the pledging price would be proposed to stimulate exports of Thai rice in the face of stiff competition from countries with lower prices.

If the price is cut, it will be the first revision of the programme, launched in 2011 amid strong criticism. Exporters have cried foul over the high rice price against a fall in global prices. Data show that Thailand's rice-export volume has fallen behind that of Vietnam.

Meanwhile, the government has also faced strong criticism over corruption involving the scheme, estimated by the World Bank to have cost the country more than Bt100 billion in the 2011-12 harvest year. Boonsong said lowering the pledging price was just a proposal by some agencies. The government has not yet agreed to it.

The next meeting of the NRPC is scheduled for the middle of this month.

In the first year, the government ended up spending more than Bt400 billion on the scheme for the pledging of 6.99 million tonnes. The programme has encouraged farmers to increase rice output to gain advantage from the high price. Based on the pledging scheme, 5-per-cent white rice costs US$589 per tonne, against $405 for Vietnamese rice and $445 for Indian rice.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said that to keep its promises to farmers, the government might maintain the pledging price. But because of fiscal constraints, it may put a lid on the amount each farmer can get from the programme.

"Officers involved with the scheme admitted that the pledging scheme had created many problems, including excessive budgets, limited warehousing space, and a drop in export volume," he said. "However, the Yingluck [shinawatra] government, which ran on a populist policy of a high pledging price to win the election, might not dare to reduce the price. But eventually it will need to find other solutions to reduce the big losses from the subsidy project."

He said the government was very likely to limit the pledging volume or value each farmer could be entitled to so that it would not need to spend a huge amount on subsidy.

According to the Commerce Ministry, about 8 million to 9 million tonnes of paddy will be harvested in the upcoming second harvest season. So far, more than 29 million tonnes of rice has been pledged into the government's stocks during the past two years.

Chookiat added that the government was also facing a shortage of warehouses for more rice.

He said the government had ordered millers to polish their rice to reduce the space needed for stocking paddy. However, it is still facing limited capacity.

Thanavath Phonvichai, director at the Economic and Business Forecasting Centre, said the government should cut its pledging price, as it had been maintained for two years. "Rice trade has become sluggish while a lot of money is lost.

Here comes the opportunity to reduce the pledging price to help increase financial liquidity for the Bank for Agriculture and Agricultural Cooperatives," or BAAC, he said.

Meanwhile, Chanudpakorn Vong-seenin, acting president of the Public Warehouse Organisation (PWO), insisted that government warehousing space remained available for the next season. To increase capacity, rice millers can work that out with exporters, to accelerate the release of rice, he said.

Regarding the BAAC's earlier claim that the pledging fund was depleted as the PWO was slow in remitting proceeds from rice releases, Chanudpakorn said the organisation had never failed to do so. The PWO is only one of many agencies responsible for the programme, he added. "As such, if the government's liquidity for this project is depleted, it's not only because of the organisation [PWO]."


-- The Nation 2013-03-01

[Ricardo]

Do they have permission from the Big-Boss, to think for themselves ?

Meanwhile confusion reigns, there will be a meeting & here's what it will decide, versus Oh-No-There-Won't !

Mr-Punch must be burning-up the Skype-lines from Dubai, wonder what he's decided, for the country ?

I wonder what the markets are making, of this apparent confusion from the former-number-one exporter, let's hope nobody with inside-knowledge is making money from speculating of rice-futures, while this is playing-out ?

Edited March 1, 2013 by Ricardo

[OzMick]

"To increase capacity, rice millers can work that out with exporters, to accelerate the release of rice"

This idiot has no idea. The supply of rice is not being restricted, it's just that buyers won't pay the inflated asking price, unless every other supply is exhausted.

[Mosha]

File under "Haven't got a clue."

[notmyself]

estimated by the World Bank to have cost the country more than Bt100 billion in the 2011-12 harvest year.

That's a lot of Baht even if there was something to show for it.

[Locationthailand]

"To increase capacity, rice millers can work that out with exporters, to accelerate the release of rice"

This idiot has no idea. The supply of rice is not being restricted, it's just that buyers won't pay the inflated asking price, unless every other supply is exhausted.

Absolutely correct and as always these clowns have no idea of supply and demand. Yep - Demand is there, but with oversupply, price 'never' remains high. If they don't cut their losses and dump at any price, the crop in storage now will be a total loss. And these fools want to add more to it? But then the people in on this scam have already made their money so who cares? I object to paying double the price for rice. Two years back before this rabble took Govt good quality rice was 130 Baht for 5kgs. Now it is 234 Baht. And this is a staple, everyone needs it, but they would rather store it? No wonder the buyers wen elsewhere. Similarly cost of fuel has gone up from 32 Baht to 42 (Benzine 91) in 12 months and cost of living is quoted as having risen by nearly 10%. IMO I think it has about doubled. Revision of the rice BS policy is right now becoming the greatest blunder by this govt and PTP still keep defending it. Loss of face - som num na.

[notmyself]

If they don't cut their losses and dump at any price, the crop in storage now will be a total loss.

The WTO wouldn't be at all chuffed if it was dumped on the world market. The best that can be done is government to government behind doors sales but we are talking about such a huge amount of rice here that I'm not even sure it can be done without serious consequences

[Buchholz]

the government was also facing a shortage of warehouses for more rice.

Nonsense according to Commerce Ministry's Permanent Secretary Vatchari.

She told the U.N. off over its concern on the storage issue due to the growing mountain of 18 million tons of warehoused rice by claiming just 2 weeks ago that Thailand had the storage capacity for 30 Million Metric Tons of rice.

http://www.thaivisa.com/forum/topic/586760-thaksin-defends-controversial-rice-pledging-programme/?view=findpost&p=6103150

.

[Robby nz]

Don't know anything about rice farming but seem to remember reading recently that Thai rice farmers were getting between 6 and 7 tons per rai of rice.

If that's correct and a small farmer has 10 rai then he or she would be getting, using the lower number, 60 tons.

With a drop of 2000b to 13,000b per ton that's a drop in income of 120,000b per year

The farmers will be real chuffed with that sort of drop in income, wouldn't you be?

But its all for the good of the country so the farmers will be happy to make the sacrifice, Yea right.

On the broader front, no matter how much they drop the price now for future crops they still have all the stored rice bought at the high price and unless they can sell it at a high price they are going to make a loss.

[Nickymaster]

Meanwhile, Chanudpakorn Vong-seenin, acting president of the Public Warehouse Organisation (PWO), insisted that government warehousing space remained available for the next season. To increase capacity, rice millers can work that out with exporters, to accelerate the release of rice, he said.

With an annual budget of THB 50,000,000,000 for handling and storage charge, warehouse space will NEVER run out. Trust me!

[Arkady]

None of the farmers I have spoken to in different Isaan provinces have managed to achieve the full price from the rice pledging scheme. Even if the rice is in perfect condition the rice millers assess it in their falsely calibrated machines and declare it to be excessively moist, therefore worth only a discounted price. The Chinese millers then of course pocket the difference and sell it on to the government at full price. Last year farmers in many Isaan provinces made losses from their rice production as they got their fertiliser and pesticide on credit and then waited for the rains that never came. The result was very low yields of mainly broken rice which the millers discount very heavily indeed. Many farmers refused to sell at the discounted "pledge" prices offered by the millers for their drought affected rice as they could get the same price or better in the open market. Meanwhile the Chinese millers and politicians are making money hand over fist filling up the government warehouses with rice imported from Laos and Cambodia, adding to the rotting stockpiles and Bangkok supermarkets are selling imported Japanese rice to supplement the poor quality Thai rice available.

What surprises me is why the farmers still support the rice pledging scheme and the party that promotes it. Perhaps they just hope things will get better somehow and lack the education to understand that the money would do them much more good, if it went into producing better strains of rice and irrigation, as the Vietnamese government does, rather than going into the pockets of millers and politicians.

Sadly shows what a powerful tool education is and why all parties in Thailand make strenuous efforts to deny it to the ordinary people, giving them an ersatz form of rote learning schooling instead to keep them ignorant and maleable for corrupt politicians and civil servants.

Edited March 1, 2013 by Arkady

[Pimay1]

None of the farmers I have spoken to in different Isaan provinces have managed to achieve the full price from the rice pledging scheme. Even if the rice is in perfect condition the rice millers assess it in their falsely calibrated machines and declare it to be excessively moist, therefore worth only a discounted price. The Chinese millers then of course pocket the difference and sell it on to the government at full price. Last year farmers in many Isaan provinces made losses from their rice production as they got their fertiliser and pesticide on credit and then waited for the rains that never came. The result was very low yields of mainly broken rice which the millers discount very heavily indeed. Many farmers refused to sell at the discounted "pledge" prices offered by the millers for their drought affected rice as they could get the same price or better in the open market. Meanwhile the Chinese millers and politicians are making money hand over fist filling up the government warehouses with rice imported from Laos and Cambodia, adding to the rotting stockpiles and Bangkok supermarkets are selling imported Japanese rice to supplement the poor quality Thai rice available.

What surprises me is why the farmers still support the rice pledging scheme and the party that promotes it. Perhaps they just hope things will get better somehow and lack the education to understand that the money would do them much more good, if it went into producing better strains of rice and irrigation, as the Vietnamese government does, rather than going into the pockets of millers and politicians.

Sadly shows what a powerful tool education is and why all parties in Thailand make strenuous efforts to deny it to the ordinary people, giving them an ersatz form of rote learning schooling instead to keep them ignorant and maleable for corrupt politicians and civil servants.

Again, read the first statement of my post signature.

[bigbamboo]

This would be an unmitigated fail but I won't believe a word of this until I hear it from the real PM.

[billd766]

I must have missed the post that said

But, but, but the Democrats.............

[Arkady]

Don't know anything about rice farming but seem to remember reading recently that Thai rice farmers were getting between 6 and 7 tons per rai of rice.

If that's correct and a small farmer has 10 rai then he or she would be getting, using the lower number, 60 tons.

With a drop of 2000b to 13,000b per ton that's a drop in income of 120,000b per year

The farmers will be real chuffed with that sort of drop in income, wouldn't you be?

But its all for the good of the country so the farmers will be happy to make the sacrifice, Yea right.

On the broader front, no matter how much they drop the price now for future crops they still have all the stored rice bought at the high price and unless they can sell it at a high price they are going to make a loss.

I am not an expert either but your yield numbers are over the top. In Isaan they like to grow Hom Mali rice which is the top grade but has a relatively low yield and can only be grown once a year - fine for them because they can only grow one harvest there. I thinks yields are around 300-500 kg of grain per rai. In the Central Plains where they have less porous soil and better irrigation they can manage 2-3 harvests a year and Hom Mali is less popular. The 15k per tonne of the rice pledging scheme is only for best quality Hom Mali with low moisture content. The farmers lack their own moisture measurement machines and there is no independent check of the calibration of the rice millers' machines which are invariably fraudulently calibrated. The millers also assess the degree of broken rice.

Of course a reduction of the pledging price for the best quality rice will affect prices for the lesser quality grain too. So all farmers will be affected. As things stand a moderately fortunate Isaan farming family with about 30 rai of their own land and perhaps renting some additional land working hard at the right times can expect to make 100-200k a year. The less fortunate farmers only have around 10 rai of their own land or less and have to rent a lot of land to be in the game. A large number of farmers never produce enough rice to pledge, They have only enough for family consumption. Family members in the city support the parents on the farm and the parents send them sacks of rice in exchange when the vans go down to Bkk.

TV members who actually live in the provinces and post in the agric forum know a lot more than I do. Some of them probably have a lot more expertise than the uneducated local farmers.

[Arkady]

None of the farmers I have spoken to in different Isaan provinces have managed to achieve the full price from the rice pledging scheme. Even if the rice is in perfect condition the rice millers assess it in their falsely calibrated machines and declare it to be excessively moist, therefore worth only a discounted price. The Chinese millers then of course pocket the difference and sell it on to the government at full price. Last year farmers in many Isaan provinces made losses from their rice production as they got their fertiliser and pesticide on credit and then waited for the rains that never came. The result was very low yields of mainly broken rice which the millers discount very heavily indeed. Many farmers refused to sell at the discounted "pledge" prices offered by the millers for their drought affected rice as they could get the same price or better in the open market. Meanwhile the Chinese millers and politicians are making money hand over fist filling up the government warehouses with rice imported from Laos and Cambodia, adding to the rotting stockpiles and Bangkok supermarkets are selling imported Japanese rice to supplement the poor quality Thai rice available.

What surprises me is why the farmers still support the rice pledging scheme and the party that promotes it. Perhaps they just hope things will get better somehow and lack the education to understand that the money would do them much more good, if it went into producing better strains of rice and irrigation, as the Vietnamese government does, rather than going into the pockets of millers and politicians.

Sadly shows what a powerful tool education is and why all parties in Thailand make strenuous efforts to deny it to the ordinary people, giving them an ersatz form of rote learning schooling instead to keep them ignorant and maleable for corrupt politicians and civil servants.

Again, read the first statement of my post signature.

What do you mean by "read the first statement of my post signature"?

You haven't posted anything else in this thread and what is a post signature?

[Ricardo]

But, but, the Democrats used to support the price of rice too, and also promised pre-election to raise it a bit ....

Well yes, but they promised a smaller more-affordable increase than PTP/Thaksin, which would have been more-sustainable and cost the public-purse less, and they would have continued to sell more for export at lower more-qworld-competitive prices, which would have meant smaller brown-envelopes all round for the deserving rich Reds !

Also they refused to play fair, and got more of the money direct to the farmers, rather than paying the millers & middle-men who deliver the vote, this was clearly against the interests of the poor (is this right ? editor ?) and also against the tenets of 'true democracy' and 'helping' the poor ! So It Had To Be Stopped !

Welcome people to your Brave Red New World, and the consequences of your voting-actions, PS the bill's on-its-way too !

Edited March 1, 2013 by Ricardo

[Pimay1]

None of the farmers I have spoken to in different Isaan provinces have managed to achieve the full price from the rice pledging scheme. Even if the rice is in perfect condition the rice millers assess it in their falsely calibrated machines and declare it to be excessively moist, therefore worth only a discounted price. The Chinese millers then of course pocket the difference and sell it on to the government at full price. Last year farmers in many Isaan provinces made losses from their rice production as they got their fertiliser and pesticide on credit and then waited for the rains that never came. The result was very low yields of mainly broken rice which the millers discount very heavily indeed. Many farmers refused to sell at the discounted "pledge" prices offered by the millers for their drought affected rice as they could get the same price or better in the open market. Meanwhile the Chinese millers and politicians are making money hand over fist filling up the government warehouses with rice imported from Laos and Cambodia, adding to the rotting stockpiles and Bangkok supermarkets are selling imported Japanese rice to supplement the poor quality Thai rice available.

What surprises me is why the farmers still support the rice pledging scheme and the party that promotes it. Perhaps they just hope things will get better somehow and lack the education to understand that the money would do them much more good, if it went into producing better strains of rice and irrigation, as the Vietnamese government does, rather than going into the pockets of millers and politicians.

Sadly shows what a powerful tool education is and why all parties in Thailand make strenuous efforts to deny it to the ordinary people, giving them an ersatz form of rote learning schooling instead to keep them ignorant and maleable for corrupt politicians and civil servants.

Again, read the first statement of my post signature.

What do you mean by "read the first statement of my post signature"?

You haven't posted anything else in this thread and what is a post signature?

If you go to your personal settings you can choose to modify your profile. In this profile it has signature. What you place there will appear at the bottom of your post..

The first statement of my signature is:

"How fortunate for governments that the people they administer don't think". Adolf Hitler

[rubl]

To be sure:

The crop mortgage programme which started on 2011-10-07 has a target price Hom Mali at 20,000 baht/tonne, other fragrant rice at 17,000 baht/tonne and ordinary rice at 15,000 baht/tonne

[waza]

It has to change or the entire GDP will eventually disappear into a mountain of rotting rice

[EyesWideOpen]

Too late.....

[notmyself]

Too late.....

Still time for damage limitation but that's it. Thai economy can withstand a 100 million Baht hit but I'm not sure how it would stand up against a 200 million hit which could be the case depending on the condition of the stored rice.

[rubl]

If I remember correctly the WB talked about a loss of THB 80 - 100 billion over the 2011-2012 period and an expectation of 120++ over 2012-1013. As far as I know that doesn't include loss due to stock molding or fading away, or even just disappearing.

Peanuts of course, or more in line with the topic, like rice grains dripping through your fingers

[notmyself]

If I remember correctly the WB talked about a loss of THB 80 - 100 billion over the 2011-2012 period and an expectation of 120++ over 2012-1013. As far as I know that doesn't include loss due to stock molding or fading away, or even just disappearing.

Peanuts of course, or more in line with the topic, like rice grains dripping through your fingers

Sorry, billion. That's not peanuts with regard to GDP and will have an adverse effect on the strength of the Baht.

[OzMick]

If I remember correctly the WB talked about a loss of THB 80 - 100 billion over the 2011-2012 period and an expectation of 120++ over 2012-1013. As far as I know that doesn't include loss due to stock molding or fading away, or even just disappearing.

Peanuts of course, or more in line with the topic, like rice grains dripping through your fingers

Spot on! Those loss figures are storage and trading losses. On some idiots account sheet, all that rice is going to be a capital item valued at what they paid for it, because nobody wants to admit that it is depreciating.

Still to come is the capital loss, plus the cost of disposal of worthless rotten rice. What do you do with millions of tons of rotten rice?

[notmyself]

What do you do with millions of tons of rotten rice?

Biofuel. Could come in handy 4-15 April.

[OzMick]

What do you do with millions of tons of rotten rice?

Biofuel. Could come in handy 4-15 April.

Taking your suggestion seriously (perhaps a mistake), I doubt that they have sufficient plant to handle making alcohol from it. Chain grate boilers may handle it as a addition to the coal, but from past experience, it probably won't work in a powdered fuel system.

Rice is a carbohydrate, still contains lots of water even when "dry", so the energy yield will not be high.

[notmyself]

What do you do with millions of tons of rotten rice?

Biofuel. Could come in handy 4-15 April.

Taking your suggestion seriously (perhaps a mistake), I doubt that they have sufficient plant to handle making alcohol from it. Chain grate boilers may handle it as a addition to the coal, but from past experience, it probably won't work in a powdered fuel system.

Rice is a carbohydrate, still contains lots of water even when "dry", so the energy yield will not be high.

Thank you for your reply.

Would the 'pomace' from the fermented rice not have a higher yield? Could the water 'hydrate' not be recovered before processing? The NE is short of water at the moment so last years rice could be used to water this years harvest.

I would also like to point out that in no way do I condone the use of any land to create biofuel when it could and indeed should be used for food use.

[OzMick]

What do you do with millions of tons of rotten rice?

Biofuel. Could come in handy 4-15 April.

Taking your suggestion seriously (perhaps a mistake), I doubt that they have sufficient plant to handle making alcohol from it. Chain grate boilers may handle it as a addition to the coal, but from past experience, it probably won't work in a powdered fuel system.

Rice is a carbohydrate, still contains lots of water even when "dry", so the energy yield will not be high.

Thank you for your reply.

Would the 'pomace' from the fermented rice not have a higher yield? Could the water 'hydrate' not be recovered before processing? The NE is short of water at the moment so last years rice could be used to water this years harvest.

I would also like to point out that in no way do I condone the use of any land to create biofuel when it could and indeed should be used for food use.

Don't know. No - the hydrate is part of the chemical structure (lots of hydrogen and Oxygen in a 2:1 mix) that will form water when it is burnt or allowed to rot. I don't think ploughing it in would hydrate the soil.

[notmyself]

Don't know. No - the hydrate is part of the chemical structure (lots of hydrogen and Oxygen in a 2:1 mix) that will form water when it is burnt or allowed to rot. I don't think ploughing it in would hydrate the soil.

I don't mean ploughing the rice in but rather the extracted H2o relaesed by a catalyst. This is why I suggest fermenting (rotting) as the alcohol produced as a 'by product' would also be of use. I'm no chemist but it would seem to me that it would result in H2o (useful), alcohol (useful) and a dehydrated mass (useful)

There is 20 million tonnes of negative entropy going to waste.

Edited March 1, 2013 by notmyself