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

[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.

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.

I rest my case - You are confusing the subject of the lead article with losses from the rice pledging scheme as indeed many people here will do! The article talks about losses from all agricultural schemes under all Thaksin governments and arrives at a figure of THB 400 bill. The losses from the rice pledging scheme are nowhere near that number.

[chiang mai]

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

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!

Interesting how most folks can't/don't read, I started my first post in this thread with, "Not to trivialise the loss but" and now you try to tell me, "Lets not trivialize this"!

[longway]

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.

I rest my case - You are confusing the subject of the lead article with losses from the rice pledging scheme as indeed many people here will do! The article talks about losses from all agricultural schemes under all Thaksin governments and arrives at a figure of THB 400 bill. The losses from the rice pledging scheme are nowhere near that number.

Please stop posting in this thread until you actually read the OP. Your posts are inane as they are ignorant. The OP clearly states

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.

And this 400 billion loss is if they can actually sell their entire stockpile, which, to say the least, very very unlikley.

Edited June 7, 2013 by longway

[chiang mai]

Such arrogance:

"The THB 400 bill. loss is from all Thaksin governments and covers losses from rice and other farm crops."

"the current government is responsible for a loss of up to Bt260 billion as at the end of May." - that's THB 260 bill losses from rice and other farm crops.

Talk to me about the value of the rice due to potentially deterioating quality, after it's status is confirmed and it's value after it's been sold.

[Thai at Heart]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

[chiang mai]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

OK so there will be a loss which as of now is not quantifiable, I fully accept that. But let's not put the entire burden of THB400 bill of loss on the current governement for the rice pledging scheme because that is not the case and it's not what's being reported.

[longway]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

The sh@t has hit the fan, lets see how they deal with it, options look ugly, the best we can hope for is a early election.

[Thai at Heart]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

OK so there will be a loss which as of now is not quantifiable, I fully accept that. But let's not put the entire burden of THB400 bill of loss on the current governement for the rice pledging scheme because that is not the case and it's not what's being reported.

Ah, but to claim it is unquantifiable is rubbish. There are decades of research that show studies on estimated storage damage. The rice exporters in bangkok have relevant prices by crop year on their page. The industry knows what their best guess on the loss will be. I would listen to them before the govt.

It won't be quantified 100% until it's all sold, but I won't take the governments own word 100% on this because they have a vested interest in fibbing. How long will it take to sell it all? 5 years, 10 years? At these prices and supply situation, a very long time.

[Thai at Heart]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

The sh@t has hit the fan, lets see how they deal with it, options look ugly, the best we can hope for is a early election.

I wonder if the government self insures the stock. If not, I would be very twitchy if I was the insurer for millions of kilos of rice.

[slapout]

Such arrogance:

"The THB 400 bill. loss is from all Thaksin governments and covers losses from rice and other farm crops."

"the current government is responsible for a loss of up to Bt260 billion as at the end of May." - that's THB 260 bill losses from rice and other farm crops.

Talk to me about the value of the rice due to potentially deterioating quality, after it's status is confirmed and it's value after it's been sold.

Not wanting to get into an argument nor question your statements as fact, OK the latter I do question, as the rice program seems to have 4 entities throwing out numbers which are in complete contridiction of any informed knowledge. This does seem to be catching, so Just a few points, that I question.

The estimate of stored rice varies from 17 million tons(figure used for several months) to the mid 20 million tons, depending on whose figures are used

The multiple rice harvest/program being talked around by government people is 2011 /12 , 2012/13 and prior years,etc

Storeage is referred to as paddy, brown, white, with various percentages of cracked/damaged thrown in for more confusion.

Storage costs, plus other costs, of 20 to 800 baht/ton/month have been quoted by different government spokespeople.

Avaliable storage for rice in this program were reported full in January of 2013,

Reported secret sales of rice have been denied by governments mentioned and the Thai rice export system

Additional budget was requested to monitor this program for corruption/lose, etc by several government Ministries

Every government reshuffle, or additional money/budget request seem to result in another ministery, committe, bank, etc entering the scene to provide more mis information.

The PM, Commerace, Finance Ministries, Ag bank, Export facilities, Millers, storage facility owners, transport agents, etc do not seem to agree on any single point to which they SHOULD have first hand knowledge and control or lack thereof. The only one left out of this circle jerk seems to be the farmer and they are reported to have seen profit drop by as much as 10%.

The full story with answers instucted/ordered by the PM for today, seems to have been followed about as closely as she follows the judical ruling, warning by compentent experts, etc, that were given as this and other populist/vote getting policies were announced.

[OzMick]

..

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.

Where does ANY government get the right to waste taxpayers' money on a policy that is an utter failure by any way you measure it?

How many ministers and MPs have recused themselves from this policy because of conflict of interest? Do you believe that not one of them has profited from this policy?

What word describes a policy which is hugely expensive, utterly fails in its stated aims, and profits those proposing/supporting/continuing it despite the obvious cost and failure? Hint - I call it corruption.

[gemini81]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

The sh@t has hit the fan, lets see how they deal with it, options look ugly, the best we can hope for is a early election.

the only methods for early elections anymore are riots and having it 'your way or no way.'

Doesn't matter on the total amount, regardless of all this speculation, bottom line is: it was a massive failure; and that is descriptive and a reflection on pheua thai as well. total ineptitude and self interest. final its collapsing (didn't take long did it?!)

[GeorgeO]

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?

It's not as if the rice-pledging scheme is the only problem here. Where has all the money gone for flood relief and prevention ... and what does the government propose to do with THB 2.2 trillion if it can actually get its hands on it...??

Don't get carried away...???

[BuddyPinkham]

In time, this will all come back and bite then in the arse!

[SOTIRIOS]

......that is perverse.....

[hellodolly]

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..

Some how I don't think this is going to impress Moody's.

So don't get carried away a lowering of Thailand's rating could only mean 1/4% more interest on a 2.2 trillion baht loan that probably no one will lend them because of the lowering of their rating.

Any one out there good at figuring out what 1/4% on 2,2 trillion baht over 50 years would amount to?

[Baerboxer]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

OK so there will be a loss which as of now is not quantifiable, I fully accept that. But let's not put the entire burden of THB400 bill of loss on the current governement for the rice pledging scheme because that is not the case and it's not what's being reported.

Surely one of the functions of the Finance Ministry would be to produce accurate cost information and future financial scenarios based on financial modelling.

The costs paid by the governmant for the rice and storage costs are known. Current rice prices, demand patterns and trend information are available. Financial models showing pofit/loss levels dependant on moderating variables should be produced so the PM and cabinet can make informed decisions,

The estimated loss or profit is quantifiable. Both now and what it could be by the end of this government's term. If this doesn't happen, then what method do the government used for budgeting?

The likely loss from the rice pledging and othe crop pledging scheme could be substantial in absolute terms whilst not appearing so if contextualised to make it look insignificant. The reality is a very large amount ot tax payers money has been used in a scheme which has already significantly damaged one of the country's main export markets and likey to do so for the consdierable future. Finding out exactly who has really benefited from this may help to understand the underlying reasons behind why it was set up and is being perpetuated. It certainly wasn't for the benefit or to enrich the poor farmers or their families' future.

[hellodolly]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

OK so there will be a loss which as of now is not quantifiable, I fully accept that. But let's not put the entire burden of THB400 bill of loss on the current governement for the rice pledging scheme because that is not the case and it's not what's being reported.

You are absolutely correct.

It is a figure that is the result of several governments being led by the same man

[Thai at Heart]

This loss is estimated using the prevailing sale price at the moment. This takes as yet, little account of the amount of product that will be downgraded in quality due to yellowing or that which is completely unusable as anything but animal feed. Thailand has never stored this enormous volume of rice before . Why? Because it's damn hot and humid here, hardly ideal for rice storage in the medium to long term.

At the moment they are assuming that what into the warehouse as grade A, will come out of the warehouse as grade A. What odds do you think that will be the case in 100% of the volume stored? When this finally unwinds, the losses just accrued in storage and quality reduction will be enormous.

OK so there will be a loss which as of now is not quantifiable, I fully accept that. But let's not put the entire burden of THB400 bill of loss on the current governement for the rice pledging scheme because that is not the case and it's not what's being reported.

You are absolutely correct.

It is a figure that is the result of several governments being led by the same man

If it was a private business funded with private money, you can bet they would put a very good estimate on the loss.

[OzMick]

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..

Some how I don't think this is going to impress Moody's.

So don't get carried away a lowering of Thailand's rating could only mean 1/4% more interest on a 2.2 trillion baht loan that probably no one will lend them because of the lowering of their rating.

Any one out there good at figuring out what 1/4% on 2,2 trillion baht over 50 years would amount to?

About THB137 billion using a rough calculation of reducible interest equals half of flat.

[winstonc]

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?

i wonder if you can enlighten me as to what you think is huge,i would be more than happy to have 1/50th of that in my bank acc,,,

[bentleyboy]

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 is more accurate to look at the costs as a % of government revenues, rather than GDP. Viewed in this light the B 400 bn (cumulative loss) would equal 13%, These are huge, and unsustainable numbers, and have rightly got the attention of the rating agencies. Yingluk needs to stop this madness before it ruins the country, or she can continue to fiddle while Rome burns.

[billd766]

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..

Some how I don't think this is going to impress Moody's.

So don't get carried away a lowering of Thailand's rating could only mean 1/4% more interest on a 2.2 trillion baht loan that probably no one will lend them because of the lowering of their rating.

Any one out there good at figuring out what 1/4% on 2,2 trillion baht over 50 years would amount to?

Roughly 55,000,000,000 or 55 billion baht per year in simple interest, compounded interest, neither my calculator nor my brain can handle that much information.

[DanielS]

Think I win now.

The losses are 56,000,000,0000,000 baht,

and not per year.

In my opinion its per month!

Hate Thaksin and every red government!

Love the King and his son!

Edited June 7, 2013 by DanielS

[drdoom6996]

Taksin's, and all the other Shinawatra's, schemes are for the Shinawatra's. Not for the Thai people who got paid to vote for them.

[seajae]

come on now, it did enrich the people, all the ptp officials, red shirt officials, thaksin family etc, just didnt help the farmers or anyone other that the elected govt and their friends.

[tomross46]

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

Who is keeping the books? Politicians?

[waza]

400 billion baht or 20% of the annual budget lost on the agricultural scams alone, plus another 350 billion baht for the flood scam and Bt85 billion for the first car scam. Then add the cost of the other PTP populist scams and we have a outrageous amount of corrupt losses in just 2 years of this administration. That's around half of the yearly budget on loss making machinations, this administration is haemorrhaging money and brings total government debt to over 2 trillion baht. But it doesn't end there, this rice scam is slated for another year and this administration wants to borrow another 2.2 trillion baht for back of the envelope scams. Can Thailand afford another 2 years of the Thaksin/ Yingluck government?

[Gulfsailor]

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..

Some how I don't think this is going to impress Moody's.

So don't get carried away a lowering of Thailand's rating could only mean 1/4% more interest on a 2.2 trillion baht loan that probably no one will lend them because of the lowering of their rating.

Any one out there good at figuring out what 1/4% on 2,2 trillion baht over 50 years would amount to?

About THB137 billion using a rough calculation of reducible interest equals half of flat.

Yep. I also got to a little over 140 billion extra cost, assuming loan is paid back over the course of 50 years. If it would result in .5% increase though, the extra indirect losses as result of the ricepledging would exceed 310 billion on the 2.2T loan. And who says a credit downgrade will only result in a .25 or .5% interest hike. Have a look what happened to Spanish and Italian rates...

[iancnx]

400 billion baht or 20% of the annual budget lost on the agricultural scams alone, plus another 350 billion baht for the flood scam and Bt85 billion for the first car scam. Then add the cost of the other PTP populist scams and we have a outrageous amount of corrupt losses in just 2 years of this administration. That's around half of the yearly budget on loss making machinations, this administration is haemorrhaging money and brings total government debt to over 2 trillion baht. But it doesn't end there, this rice scam is slated for another year and this administration wants to borrow another 2.2 trillion baht for back of the envelope scams. Can Thailand afford another 2 years of the Thaksin/ Yingluck government?

NO ..... IMHO..... simple as that!