Cumulative Losses From Thaksin Govts' Farm Schemes Touch Almost Bt400 Billion

[webfact]

Price-pledging fiasco
Supannee Pootpisut,
Petchanet Pratruangkrai
The Nation

Cumulative losses from Thaksin govts' farm schemes touch almost Bt400 billion

BANGKOK: -- Governments linked to former prime minister Thaksin Shinawatra have inflicted cumulative losses of almost Bt400 billion on the country through the pledging schemes for rice and other farm crops, and the current government is responsible for a loss of up to Bt260 billion as at the end of May.

The Finance Ministry's Post-Audit Committee on the Rice Pledging Scheme revealed yesterday that the government of Prime Minister Yingluck Shinawatra had overspent the budget for the rice-pledging project - Bt661.22 billion, well in excess of the Bt500 billion earmarked for the project.

The panel urged the government to release its rice stockpiles soon to bring revenue into the project.

Meanwhile, the Public Warehouses Organisation (PWO) said yesterday that it would ask the government for an additional Bt2 billion to stock more than 15 million tonnes of rice left in the government's stockpiles from the pledging during the past two years. The PWO stores more than 70 per cent of the government's rice, while the rest is being held by the Marketing Organisation for Farmers.

The Democrat coalition led by Abhisit Vejjajiva came to power in late 2008. During its time in power, the government abandoned the pledging scheme and adopted a crop-price-insurance policy, which freed the government from the responsibility of stocking the crops.

The Finance Ministry committee reported that as of January 31 this year, the government faced a loss of Bt220.96 billion. The government is estimated to be accumulating a loss of Bt10 billion a month under the pledging scheme - a cumulative loss of Bt260 billion by the end of May.

Of the total losses, Bt42.96 billion is for the main crop in 2011-12, Bt93.93 billion from the second crop in 2012, and Bt84.07 billion from the main crop in 2012-13.

The losses do not take into account depreciation of rice quality in the government stockpiles, which if included, could take the total loss to more than Bt400 billion, the report said.

If the budgets for the pledging schemes for rice and other crops under all the Thaksin-related governments are tallied, the country's losses from the subsidy projects would amount to Bt393.9 billion. These amounts include rice-pledging losses during 2008-09.

The committee said the huge losses from the pledging had resulted from the Commerce Ministry's failure to achieve its target of releasing rice from the stockpiles and the low selling price.

"The government needs to solve the problem urgently, as its rice-selling plan has not been successful because of the low price. The government has overspent the budget and it will affect the next pledging round," the committee suggested.

PWO vice president Somsak Vongvattanasan said the organisation was currently holding in its stockpiles about 17 million to 18 million tonnes of rice from the pledging scheme. Of this, only 2 million tonnes has been sold under contracts, while 15 million tonnes lies unsold.

As a result, the PWO needs to ask for an additional Bt2 billion for stockpiles next year.

The spending on rice stocks is about Bt100 a tonne per month. These include warehouse or silo rental fees at Bt20 a tonne, insurance, rice bags, fumigation, labour and rice-surveyor wages and transport.

Somsak acknowledged that the PWO's capacity for rice stocks had been fully taken up and it needed additional space for more than 2 million tonnes of rice brought in under the programme.

Pricey project

Bt661.2 billion

Money spent on the rice price-pledging project in the last two years

Bt220.9 billion

Cumulative loss from the project, as of January 31

Bt260 billion

Estimated cumulative loss by the end of May

Bt393.9 billion

Cumulative loss from the project during the governments linked to Thaksin Shinawatra


-- The Nation 2013-06-07

[chiang mai]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

[nottocus]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

[pedro01]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

It's a huge loss. Imagine the impact on schools/healthcare here if the 400Bn had gone there.

This is not the governments money to spend, it is taxpayer money. This waste is truly sickening.

[RickBradford]

The people will have lost $10bn+ -- the politicians involved will have gained.

This isn't money lost, it is money looted.

[Enjoyurlife]

It's 10 billion euro, it's huge

Sent from my GT-I9300 using Thaivisa Connect Thailand mobile app

[chiang mai]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Not to trivialise the loss but In the context of GDP it's a small number, and, the losses being talked about represent the losses from ALL agricultural schemes under various Thaksin governments, not just the losses from the rice scheme that's in the headlines currently.

Edited June 6, 2013 by chiang mai

[Robby nz]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

So its only just under 400 billion, only Thai Baht, and not a high percentage of GDP, right on, nothing to worry about then, all going to plan.

See Moodys, there is no reason at all to downgrade.

Thought for a bit there the country could have a problem but completely happy now.

[nottocus]

Who cares about GDP? It's massive. To think how it could have been spent.

[chiang mai]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Who cares about GDP? It's massive. To think how it could have been spent.

So how was it spent, much of it was spent by various Thaksin governements to subsidise the rural poor.

Edited June 6, 2013 by chiang mai

[nottocus]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Not to trivialise the loss but In the context of GDP it's a small number, and, the losses being talked about represent the losses from ALL agricultural schemes under various Thaksin governments, not just the losses from the rice scheme that's in the headlines currently.

Ahhh...OK. Got it. It's all those other schemes as well that that have added up to this small loss (in terms of GDP). That's OK then. All good.....nothing to see here people....move on.

Chiang Mai should become a propaganda spokesman for the Thaksin government.

[nottocus]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

>Who cares about GDP? It's massive. To think how it could have been spent.

So how was it spent, much of it was spent by various Thaksin governements to subsidise the rural poor.

How do you spend a loss?

[chainarong]

These are a great set of numbers and congratulations must go out to all the morons in the PTP, you could have rounded off the amount at say Bt500million or lets get adventurous and make it Bt 1 Billion actually the sky's the limits where you are concerned and all tailor made for the vote buying gullible peasants that so blindly follow your blundering policies, your immature child like approach to government for all Thailander's is nothing short of disgusting, along with corruption in your administration one wonders what the true figure should be, all this money wasted on grand standing could have been used for more useful purposes, Education, Health, infrastructure , need I say more

[chiang mai]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Not to trivialise the loss but In the context of GDP it's a small number, and, the losses being talked about represent the losses from ALL agricultural schemes under various Thaksin governments, not just the losses from the rice scheme that's in the headlines currently.

Ahhh...OK. Got it. It's all those other schemes as well that that have added up to this small loss (in terms of GDP). That's OK then. All good.....nothing to see here people....move on.

Chiang Mai should become a propaganda spokesman for the Thaksin government.

Well it;s just that most folks have problems reading and understanding so I thought it was useful to put it in context. Folks will see 400 billion and automatically imagine it's USD in their heads, when they realise it's THB they're not smart enough to do the conversion and when they see the words rice scheme, automatically the post says that USD 400 bill lost on current rice scheme.

[nottocus]

Who said it was 400 billion USD?

Most people understand what Bt400 billion means.

[Bellweather]

I'm sure the government too will not get carried away, it's ONLY B400 Million and it's not their money so they can afford to extend these schemes, the rice farmers will love them as will the politicians, civil servants middlemen et al who have their hands in the till.

[apetley]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

 

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

 

 

Who cares about GDP? It's massive. To think how it could have been spent.

So how was it spent, much of it was spent by various Thaksin governements to subsidise the rural poor.

If it is being used to subsidise the poor farmers why did the Commerce Ministry release figures last weekend saying that farmers income had gone down 7.7% over the last year?

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

[pedro01]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Who cares about GDP? It's massive. To think how it could have been spent.

So how was it spent, much of it was spent by various Thaksin governements to subsidise the rural poor.

But that's not where the bulk of the money went is it? A small percentage of it got to the farmers.

The farmers don't need subsidies, they need their kids educated. The education system in rural areas is pitiful and perpetuates a cycle of poverty.

What a shame money wasn't spent on that.

[Thai at Heart]

Well, how long can this go on like this. No space for storage, no sales, no money for the system.

Will they keep going and spend more, or will the army step in. Won't the farmers have a fit if they stop the subsidy?

[MaxLee]

The rice scheme, the 1st car SCAM, the 4 billion kachillian Baht Water mega ripoff-project will add up another 99999999...... Trillion kachillian Baht to Thailand's debt crisis...

[bigbamboo]

400 billion losses..... on Thailand's most successful export business.

I think I'd better throw my Thaksinomics book on the nearest fire then before my student son sees it.

Edited June 7, 2013 by bigbamboo

[virtualtraveller]

Not a huge portion of GDP they say, but to put it all in perspective

Where did this money go?

Well, there were 1 million poor farmers registered in the scheme. So, simple maths means each got 350,000 baht. Did they? Well, has anyone seen new vehicles in your local village? No. Why don’t we all give up our low paid factory jobs to become farmers, earning 350,000 baht extra.

So, where did this money go?

Well, there’s about 4 million farming families in this country, if the govt had used the money more wisely and sent them all a cheque, each household would have received a bonus of 70,000 baht. Did you? That’s more than the annual minimum wage for one farm hand.

So, where did this money go?

Well, there’s 65 million people in this country. If every man, women and child was given a tax rebate, you would get 5,384 baht for every person in your family. Did you?

So, where did this money go?

Well, instead of relying on a corrupt system to get the money directly to the pocket of the poor farmer, maybe the money ended up in the local economy to help with infrastructure. There are 7255 tambons in Thailand, so each could have got 48,000,000 baht. That’s a lot of whisky for the village headmen. Did you see them suddenly richer? No.

So, where did this money go?

Well, maybe it didn’t go to the farmers because the middle men and officials decided the money was better spent on community services like hospitals and schools. If that’s how they have spent the money then we will now have about 10,000 new schools or hospitals built, that’s 500 for every single province in Isarn. Have you seen anything new going

up in your district?

But just suppose...

half of it was passed on to farmers and half was kept in a 'war chest' by local election canvassers posing as middle men, that would be at least 160 billion baht, now, divide that by the entire electorate of this country (about 40 million) and it works out to be 4 thousand baht notes each.

Or

Compare it to the amount of money Thaksin hopes to eventually recover from his seized assets and it's about 6 times the amount.

The govt insists this scheme is a good idea

to help the poor, it has pledged to continue this project for its full term, that’s means 2014 and 2015, so take all these figures above and double them.
Then ask your local Peua Thai representative…

Where does all this money go, because we haven’t seen any of it.

Edited June 7, 2013 by virtualtraveller

[NongKhaiKid]

At the beginning of the week Yingluck praised the rice pledging scheme and said it had " enriched " the lives of rice farmers. Enriched might be an appropriate word but the context is all wrong.

[kimamey]

How do you spend a loss?

I think you need to brush up on your maths and economics knowledge. You don't spend a loss. If you spend money that is a loss. If you get something back for that outgoing you reduce that loss by that amount. The difference between those figures is your overall profit or loss.

chiang mai isn't saying this isn't a loss or that it's small but pointing out the relevance in terms of GDP.

What is more important is whether it has helped farmers financially and has any of this money been used by them to improve their farming in the long term to help when the pledging stops.

How much of the money gone instead in corruption.

How much has gone to those who aren't poor (possibly the millers)

Is this scheme better or worse financially and practically than that run by the last government.

There will be some income from rice sales which will help but it does seem that the rice will have to be dumped or sold at a large loss. When the scheme ends and the rice sold or dumped we will know the true cost.

Edited June 7, 2013 by kimamey

[whybother]

The rice scheme losses are apparently small compared to GDP, and if someone decides that the losses start to get too big to compare to the GDP, we can find a bigger number to compare it to that doesn't make it look so bad.

Creative Reporting 101.

[retell]

Cumulative losses from Thaksin govts' farm schemes touch almost Bt400 billion

so they figured out how much he take with him when he "ousted" himself

[Thait Spot]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Not to trivialise the loss but In the context of GDP it's a small number, and, the losses being talked about represent the losses from ALL agricultural schemes under various Thaksin governments, not just the losses from the rice scheme that's in the headlines currently.

400B Baht represents wasting around 20% of tax revenue. Government expenditure is already in excess of revenue.

[CrisRMenumate]

these schemes are supposed to be to help rice farmers, especially poor ones, get more for their crop but actually the farmers aren't getting more, the middle men are and the big farm agro groups - poor uneducated, illiterate farmers are still being duped into very low prices to middle men who then sell it on to the government program for higher price and of course all the other "middle men" along the chain are the ones making money out of this sham, scam, scheme... stupid auto correct... and sadly, the poor farmers will get duped into voting for the same morons again at the next election

[longway]

It's not small change by any means but the numbers are in THB and not USD so don't get carried away. And as a percentage of GDP the actual losses are small, just before somebody (you know who) chirps in that the rice scheme will bankrupt the country..

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

Not to trivialise the loss but In the context of GDP it's a small number, and, the losses being talked about represent the losses from ALL agricultural schemes under various Thaksin governments, not just the losses from the rice scheme that's in the headlines currently.

The conservative estimate of 260 billion baht is about 2.5% of GDP the more realistic estimate of 400 billion baht once taking into account the costs of storage and the deteriorating quality of the rice stockpile is about 4% of GDP.

Then once you factor in the the destruction of the market mechanism of the rice market so now thai rice farmers are completely dependent on this government handout for the forseeable future then losses will be even more significant, and thats not even taking account the permanent loss traditional export markets and the loss of reputation for the quality of thai rice.

Now if Moody downgrades thailand then borrowing will become more expensive and of course money spent on this scam has a significant opportunity cost and budgets in other areas will have to be cut to pay for this fiasco.

260 billion is just the tip of the iceberg.

[GentlemanJim]

Somewhere in the vicinity of 10+ billion USD in losses. Don't get carried away?

>Who cares about GDP? It's massive. To think how it could have been spent.

So how was it spent, much of it was spent by various Thaksin governements to subsidise the rural poor.

But you know it hasn't been spent to subsidize the rural poor don't you, and if not you are not reading enough. Lets not trivialize this, it is a loss of 13 BILLION US Dollars , It is about 9 BILLION British pounds. If a Uk Government (similar size population to Thailand), had lost 9 BILLION pounds (and this is but one project) through corruption and neglect/incompetence, there would be MP's swinging by the neck from London Bridge right now. Interesting you say 'well it's not a lot compared with GDP', watch how that drops as the rice industry collapses. It has not gone unnoticed that most people on here with the words "Chiang Mai" in there TV names seems obliged to say anything in defence of team Shiniwatra.

I'm sure the government too will not get carried away, it's ONLY B400 Million and it's not their money so they can afford to extend these schemes, the rice farmers will love them as will the politicians, civil servants middlemen et al who have their hands in the till.

It's Billion not Million

It's funny how different people are. In the US everyone gets up in arms and has a President impeached for having a BJ, in Thailand the entire population stand back in silence as team Shiniwatra rape the country in broad daylight. The only other place this could possibly happen is...Cambodia......now there's a coincidence!