Rice-Pledging Scheme: How Much Have We Lost, Yingluck Asks

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RICE-PLEDGING SCHEME
How much have we lost? Yingluck asks
The Nation

Flustered PM orders commerce minister to reveal details of rice-pledging scheme to ratings agency

BANGKOK: -- The government yesterday ordered immediate verification of the status of the rice-pledging scheme in a bid to determine its profitability - and counter a warning by Moody's rating agency that the controversial policy could hurt the Thai economy and cause a downgrade of its credit rating.

During the Cabinet meeting yesterday, Prime Minister Yingluck Shinawatra instructed Commerce Minister Boonsong Teriyapirom to reveal the details of the scheme's operating costs, now reportedly a massive loss of Bt260 billion.

The government was grilled about the scheme by the opposition in the 2014 budget bill debate last week.

During the debate, Boonsong said that the Bt260 billion loss, reportedly cited in an unofficial Finance Ministry report, associated with the scheme was groundless. But he did not produce any proof to support his claim.

Deputy Commerce Minister Natthawut Saikua was also ordered yesterday to help Boonsong with compilation and verification of the figures relating to the scheme. Prior to the Cabinet meeting, Yingluck appeared irritated by persistent questions by reporters about the figures, following the warning by Moody's on Monday.

When asked repeatedly, the PM said: "I told you, that those responsible for finding out the [actual] figures associated with the scheme will make them public later." Asked if the scheme losing such a huge amount would affect her as prime minister, she said "Enough!", and walked off.

Yingluck said she had ordered the Finance Ministry to closely follow up on Moody's statement and analyses, and prepare any information for the rating's agency if requested.

Natthawut, speaking after the Cabinet meeting, said Yingluck had approved his idea to launch a mobile public relations campaign to raise awareness of the rice-pledging scheme with farmers across the country. The first event would be held in Phitsanulok on Sunday (June 9).

Explanations would be given to farmers during the rally, while a compilation of details on the scheme would be collected. The Bt260 billion figure was likely to be inaccurate and calculated from a "misuse of criteria", he said.

The scheme would see around Bt140 billion in prospective returns, and still a huge amount of rice stockpiled in the government's custody. He said the Finance Ministry "refused to give the official figures to him" at his request, but he now wondered how a Democrat MP had acquired and posted the figures on his Facebook page.

A Commerce Ministry fact-finding to determine the figures had commenced as ordered by Yingluck, he said.

Commerce Ministry permanent secretary Watcharee Wimuktayon said on Monday, that without official details from the Finance Ministry, the Bt260 billion figure seemed exaggerated. She said the scheme spent around Bt600 million in two years' budget, plus a large amount before the Yingluck government took office.

'Figures classified'

She said rice left over and held by the government would be deducted from the Bt260 billion amount and the criteria used by the Finance Ministry committee on budget-closing responsible for the rice scheme would be studied on how it came up with such a figure.

Watcharee said had sought to get official figures from the committee, but was allegedly told the figures were classified, by order of Finance Ministry leaders.

A Pheu Thai source said a party meeting last weekend discussed economic issues faced by the Yingluck government and agreed to assign Weerawuth Wajjanaphukka, Boonsong's secretary, to make announcements on the government stance on Moody's warning this week. Weerawuth had failed to deliver, while Boonsong had also stayed silent over the issue, despite the Commerce Ministry being supposed to make clarifications to the public over the figures.

"The responsibility now rests with the Commerce Ministry, which has to try further if it cannot produce figures to counter the Finance Ministry," the source said.

Deputy Bank of Thailand governor Pongpen Ruengvirayudh said the warning by Moody's had affected Thailand's image, and if it downgraded Thailand's credit rating, this would affect domestic and overseas investment, plus mobilisation of capital by both the public and private sectors.

She said Moody's warning needed to be double-checked and balanced by actual figures on profitability of the rice scheme from the Commerce Ministry. "It's a responsibility of Thai authorities to give actual figures to Moody's," she noted.

-- The Nation 2013-06-05

[Thai at Heart]

During the Cabinet meeting yesterday, Prime Minister Yingluck Shinawatra instructed Commerce Minister Boonsong Teriyapirom to reveal the details of the scheme's operating costs, now reportedly a massive loss of Bt260 billion.

That dastardly commerce ministry has obviously been keeping it secret and so classified not even yingluck knows. Have you ever seen such a circus. Boon song, the nick leeson of Thai rice. Lol

[dcutman]

Explanations would be given to farmers during the rally, while a
compilation of details on the scheme would be collected. The Bt260
billion figure was likely to be inaccurate and calculated from a "misuse
of criteria", he said.

Bt600(plus) billion spent x 40%(plus) the Govt overpaid for the rice = roughly Bt260 billion. Rocket science not really required to figure losses.

Edited June 4, 2013 by dcutman

[notmyself]

I can't see it being below 300 Billion myself.

There was mention of stock holding as if it is a positive. Correct me if I am wrong but if someone is in a situation where they are holding something which they bought for a higher value than they are going to be able to sell it for, you want to be holding as little as possible.

What on Earth are they going to do with around 18 million tonnes of insect ridden partially digested rice? This is a serious question I might add. Even if the government admit they were wrong and write off the whole amount or there is a coup or some such. Thailand is still going to have 18 million tonnes of rat magnet which they will have to deal with.

Edited June 4, 2013 by notmyself

[Thai at Heart]

It's largely irrelevant anyway what the estimated loss is. They can't and haven't sold much so the system will need refinancing eventually anyway.

[NongKhaiKid]

Those pests in the media at it again asking the PM a question she can't or won't answer so she cuts it short and beats it.

Funnily enough yesterday i heard a news item stating she had praised the scheme which was working well and had greatly benefited the lives of rice farmers.

All of this is fine in pre-prepared releases but the tricky direct questions will not go away and she just makes things worse by dodging the issue. Time for another overseas trip i would think.

[geriatrickid]

I anticipate that we shall see some interesting accounting.

Governments have a tendency to use funds in interesting ways. For example, in many western countries we see the monies collected for unemployment insurance plans or other benefit programs treated as part of the "revenues" which is then used to reduce a government deficit. It may look nice on paper, but it doesn't really fool the rating agencies.The cautionary lesson the Thai government should take away from that approach is that the numbers can be massaged and cooked, but the people doing the verifications will see through the hocus pocus trickery.

Forgive me, but I think it will play out this way;

- Government provides numbers

- Rating agencies pull them apart

- Government then claims these foreign devils are biased or don't understand the program and then do the usual huff and puff , bruised national pride, rally around the flag routine. Government then provides "explanation".

- Rating agencies question the numbers and then if the numbers are very bad downgrade the Thai sovereign debt rating.

I have a suggestion to the Thai government. Don't bother with the many month of arguing, and just accept the inevitable outcome now. Better yet, just address the rice pledging plan's problems.

[Roadman]

Explanations would be given to farmers during the rally, while a

compilation of details on the scheme would be collected. The Bt260

billion figure was likely to be inaccurate and calculated from a "misuse

of criteria", he said.

Bt600(plus) billion spent x 40%(plus) the Govt overpaid for the rice = roughly Bt260 billion. Rocket science not really required to figure losses.

It is not only the above the "quality Jasmine rice" price that they have paid out for not only thai rice but it also seems foreign rice being sneaked across the borders, but also the loss between the premium that Thai jasmine had over all other countries jasmine rice. And also the down grade of that jasmine to old grade rice. Who in their right mind is going to pay for old 'thai jasmine rice" or new seasons thai jasmine (honest it is - honest - lookie even have Thaksin and Yingluck smiling honest face on packet) from this corrupt lot when Cambodian and Australian new seasons jasmine is available at 75% of thai jasmine price. Would suspect that the loses, and that is only to date, on this mess would be more in the vicinity of 60% of the 600billion. The loses going foward in confidence of thai jasmine rice to command top price also will need to be considered.

This would have to be one of the most clueless schemes ever of how to overnight destroy the quality market place share of a premium staple product, and reduce the product to a level of uncertainity in the minds of world buyers thanks to the magnificent Pheu Thai, the idiotic Thaksin (so called smart bussinessman my ar_hole) and his clueless "flustered" puppet sister Yingluck. Only in Thailand and other fully corrupt countries would these sort of idiots get elected to govern.

How any democratic minded western person can defend this lot is beyond believe. Not only corrupt and dictatorial but economically clueless to boot.

Edited June 5, 2013 by Roadman

[hmj]

notmyself #4

"Thailand is still going to have 18 million tonnes of rat magnet which they will
have to deal with."

Remember the power plant which will run on burning 'garbage'.

[Thait Spot]

Once again the PM flees rather than answer questions.

She obviously doesn't understand her job.

[Bellweather]

I anticipate that we shall see some interesting accounting.

Governments have a tendency to use funds in interesting ways. For example, in many western countries we see the monies collected for unemployment insurance plans or other benefit programs treated as part of the "revenues" which is then used to reduce a government deficit. It may look nice on paper, but it doesn't really fool the rating agencies.The cautionary lesson the Thai government should take away from that approach is that the numbers can be massaged and cooked, but the people doing the verifications will see through the hocus pocus trickery.

Forgive me, but I think it will play out this way;

- Government provides numbers

- Rating agencies pull them apart

- Government then claims these foreign devils are biased or don't understand the program and then do the usual huff and puff , bruised national pride, rally around the flag routine. Government then provides "explanation".

- Rating agencies question the numbers and then if the numbers are very bad downgrade the Thai sovereign debt rating.

I have a suggestion to the Thai government. Don't bother with the many month of arguing, and just accept the inevitable outcome now. Better yet, just address the rice pledging plan's problems.

Interesting accounting yes and most definitely " creative ".

[jalansanitwong]

it would be interesting to see the import figures for luxury european cars since the rice pledge program started.

there seems to have been a surge in luxury imports into Isan in recent times. hmmmmmm!

i doubt if these ferraris and maseratis are going to Khun Sombat the rice farmer.

[ratcatcher]

Looks like it's about time for the entertainment.

[Thai at Heart]

Amazing that they didn't think this question has been coming and didn't have a better answer than, "bog off, it's our superior rice and we'll tell you what it's worth, when we want".

The game was up the day they claimed that sales were secret.

[Mosha]

When she said they had the best possible people in their roles in the cabinet. She obviously wasn't including herself. The OP is really a hand-slap-forehead moment.

[Thai at Heart]

When she said they had the best possible people in their roles in the cabinet. She obviously wasn't including herself. The OP is really a hand-slap-forehead moment.

Exactly.

"I order this person to prepare the figures coz I don't know".

The buck is lost and God knows where it stops...

[hanuman2543]

It is only a question of time when the other rating agencies will follow Moody's move. What excuses we will hear then? Honest mistake, bla bla ...?

[apetley]

Why am I reminded of page 3 stunner Gayle Tuesday?

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

[Payboy]

How Much Have We Lost, Yingluck Asks

The whole plot.

[givenall]

Once again the PM flees rather than answer questions.

She obviously doesn't understand her job.

Woo it took you this long to find out she is a puppet

[clockman]

Not concerned, till the internatniol stage is involved. Then panic sets in. T.I.T

[Thait Spot]

Once again the PM flees rather than answer questions.

She obviously doesn't understand her job.

Woo it took you this long to find out she is a puppet

Haha! Not really - but there are thise who believe her to have improved and grown into the role in some fantastic form of on the job training.

It's her job to know the cost and it's her job to inform the public whether the figures are good or bad.

Running with a policy that loses so much taxpayers' money in a clear attempt to garner votes is almost certainly illegal.

[animatic]

Sadly this all was expected from day one of this government.

And the biggest nudge to it unraveling is a world class bitch slap from Moodys

about the world-viewed relative credit rating reduction, and the SPECIFIC reason it was given.

This will be a massive rice pledging loss, it must be, since they always put the best 'face' on things.

And the one on this is a kabuki death mask.... What they are desperately hiding must be truly scary,

if what they show now is the 'good' false front... Eminence Front: It's a put-on!

Yes PM. Poo is way out of her depth on this one;

Regularly inhaling pond scum in nostrils, every time she tries to rise up into the fresh air.

And it's not going away, while they still talk of another harvest going into the scheme.

The 1st payback to the rice mob / political machine for delivering the election,

must have really have come up short after the Rice Harvest saving dam release delays

caused the nation wide flood.

Of course turning that flood into contracts for the cronies is always a way to turn vinegar

into political wine. But lose the rice farmers, and there is no reelection.

Sooooo... Send out the Red big mouths to confuse the truth with the needed

message to the hustings. Don't believe those foreign devils who don't know thai ways.

Now cue Dep Minister / Red Shirt Natthawat... HAH, his response is ...

'Political Roadshow!'

to keep the cogs in the political machine from hearing the unvarnished truth.

Can you imaging the dissolutionment from all those PTP voting farmers,

if they hear that their gravy train will soon ruin their childrens lives.

The first phrase out of his mouth is to call Moody's figures lies.

He does it in a cabinet meeting, and completely ignores that he was just told,

'Assist in finding out the real facts.'

This has gone well beyond farce and into Sysipusian Fantasyland via crazy train..

Was it Einstien that said:

"A sign of insanity is to repeatedly doing the same thing,

over and over, and expecting a different result."

[notmyself]

Running with a policy that loses so much taxpayers' money in a clear attempt to garner votes is almost certainly illegal.

lol

[bigbamboo]

Once again the PM flees rather than answer questions.

She obviously doesn't understand her job.

Oh yes she does.

That's why she flees!

[joeaverage]

you may sneer now, but come the apocalypse, that rice is going to taste mighty good

[Neilly]

How much have we lost? Yingluck asks

Never ask direct questions...the answer may come back to haunt you

[Ricardo]

The Commerce Minister has been instructed to reveal the full costs of the scheme, at this point, but why was this ever necessary ? Shouldn't the figures already be in the public domain, under any transparent regime, it simply begs the question, what have they been trying to hide ever since the scheme started ?

And preparing figures to supply to Moody's themselves, why not make those same figures available-to-all on an on-going basis, including the tax-payers whose money has been lost on this foolish adventure ?

It's embarrassing that even the PM herself still doesn't know the facts, from month-to-month at least, no wonder she finds it hard to answer questions and runs away from the reporters' questions. Perhaps her brother should have kept her better-informed, perhaps she should have insisted that he do so, or perhaps its time to sack 'her' ministers who have failed to brief her properly !

The figures ought to detail current-volumes and ages of the government rice-stocks, and mark-to-market prices, not show them at purchase-cost, but will they ? Or will fudge continue to be the order-of-the-day ?

Full details of government-to-government deals must now be released, with the identities of counter-parties revealed, and tonnages contracted/shipped detailed, so that they can be verified by independent sources, also the prices agreed and actually paid (if yet paid), the time for claiming commercial-confidentiality is now way past !

One might also hope for more information on the BAAC, and how much of the government's debt in respect of this scheme, has ever been reimbursed to them, until then the markets and public might well question whether the bank's finances remain sound. This is serious stuff, given other recent bank-failures and the 1997-situation, the government's silence would risk serious loss-of-confidence in the Thai banking-system.

Until then, the market (and ratings-agencies) are fully-entitled to question the true cost of the scheme, and to threaten to down-grade Thai debt, in advance of the massive long-term borrowing demanded by the delayed flood-works and the ambitious infrastructure-improvements planned.

But somehow one doesn't expect the full truth to emerge just yet, despite all the promises, the excuses and blame-laying has a long way to run as yet.

[notmyself]

This is serious stuff

Life changing I would say

[Pib]

Yinluck is now concerned about how much votes cost? Maybe next election the PTP will decide on a lower outlay per vote.

How about a 10 baht subsidiary per bowl of noodles scheme? That should get a lot of votes, appeal to almost every voter in Thailand instead of just rice farmers, and be cheaper than the rice pledging scheme.