Thai Govt Rebuts Rice Report

[webfact]

Govt rebuts rice report
Petchanet Pratruangkrai
The Nation

Boonsong says not possible to calculate losses until scheme ends, stockpile sold

BANGKOK: -- The Commerce Ministry and government agencies responsible for the rice-pledging scheme yesterday rejected reports that the project had run up huge losses of up to Bt260 billion, but failed to produce any evidence to substantiate their rebuttal.

Yesterday's move followed a report on Thursday by the Finance Ministry's Post-Audit Committee on the Rice Pledging Scheme, which said the government had exceeded the budget and faced huge losses.

The project also threatens Thailand's credit rating because of huge financial losses, it said.

Moody's Investors Service warned earlier that the losses were credit-negative for the Thai sovereign.

Commerce Minister Boonsong Teriyapirom denied yesterday that the government had suffered a Bt260-billion loss, arguing that the rice in the stockpile had still not been sold while the pledging project was still in operation.

"The government cannot yet estimate the final loss figure from the pledging scheme. The figures can be finalised only three years after the end of the pledging scheme this September. The government must release all rice stockpiles so that it can know exactly the cost and spending on the pledging programme," he said.

He questioned how the committee could have calculated the losses as the government still has more than 10 million tonnes of rice in the stockpiles.

Boonsong said the main objective of the pledging was to help farmers. There could be losses but they would not be as high as the report estimated or exceed the previous government's income-insurance project budget of between Bt70 billion and Bt80 billion.

In spite of facing losses, Boonsong said the government would continue the pledging next year. However, some details and conditions of the pledging could be changed.

The ministry added that the government had already earned Bt120 billion from release of rice stocks. It should be able to earn more to offset losses by selling the remaining stocks. However, the it did not reveal how much the government was spending for stocking rice in warehouses each month.

To find out a clearer figure, the ministry will submit a report of the audit committee to the National Rice Policy Committee next week.

Supat Eauchai, vice president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), said the government had spent a combined Bt614 billion for the pledging from 2011 to 2013. The pledging had added about 39.5 million to 40 million tonnes of paddy (25 million tonnes of rice) to the government stocks.

Deputy Commerce Minister Natthawut Saikua admitted that the government did face a loss from the pledging but the aim of the government was to help farmers.

However, the loss figure would not be as high as estimated by the committee. He pointed out that the government had several million tonnes of rice stocks.

Based on the Finance Ministry committee report, as of January 31, the government faced a loss of Bt220.96 billion.

It 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 was for the main crop in 2011-12, Bt93.93 billion for the second crop in 2012, and Bt84.07 billion for the main crop in 2012-13.

Call for review

Meanwhile, the Thai Rice Farmers Association acknowledged the huge losses incurred by the government under the rice-pledging scheme, and expressed worries about the future and the lower rice quality.

Association president Prasith Boonchuey said the government needed to review the scheme after the end of the pledging round this September.

"Despite the high pledging price, farmers have never got high returns and still faced a high debt burden after the higher cost of production. Farmers do not want this unstable pledging at a high price as the government will finally need to review the policy because of huge losses and financial liquidity problems.

"Farmers have ignored development of rice quality because the government has focused only on price, while they have no plan to promote sustainable growth of rice plantations," he said.

Prasith said the pledging policy had not helped farmers to improve their living standards.

Farmers want a project that focuses on long-term development rather than a pledging scheme that will be ended eventually.

As a short-term measure, he called on the government to reduce the pledging price to Bt10,000 a tonne of paddy, as well as limit the quantity of pledging. He claimed that most farmers, particularly in the Northeast, did not want the pledging.

Farmers favour income guarantees, by which they get specific incomes, rather than the pledging, as it involves many problems such as delayed payments.

Because of the high pledging price, Prasith said farmers had to shoulder higher production costs, mainly rental fees, which had doubled from the past. For instance, the rental fee for a rai (1,600 square metres) of land in each rice-planting period has jumped from Bt1,000 to Bt2,000 in Chainat.

To help farmers in the long run, the association called on the government to develop rice-grain quality, reduce costs, increase yield per rai and production, promote marketing, and impart knowledge to farmers.

Primarily, as a self-reliance plan, the association will set up its own "farmers' welfare shop" to sell cheap agricultural equipment.

The association called for soft loans by the government to help farmers.


-- The Nation 2013-06-08

[tominbkk]

We've sold it all, and how dare you ask us to prove it!

[Thai at Heart]

Wrong answer. Go back do it again, I want it on my desk on Monday morning.

[bigbamboo]

It's not possible to calculate the TOTAL losses yet but 260billion is about where the deficit stands just now. It's likely to go higher not lower.

By the way, we've heard all sorts from his monkeys but do you think we will hear from the organ grinder himself? It's his master plan after all but he seems unusually silent at the moment. I hope he's not feeling sick.

[webfact]

Ministers give unclear explanation on rice pledging losses
By English News

BANGKOK, June 8 – Commerce Minister Boonsong Teriyapirom yesterday categorically denied a report that government’s losses amounted to Bt26 billion from the rice pledging scheme.

He said government’s allocated expenses to buy rice from farmers was Bt118 billion and Bt228 billion in the 2011-2012 and 2012-2013 harvest seasons respectively while another lot of Bt50 billion subsidy will be earmarked soon.

Mr Boonsong said the rice subsidy scheme, launched in late 2011, has contributed to the country’s gross domestic product (GDP) growth at 0.5-1 per cent while 14-15 million rice-cultivating households could sell their paddy at higher prices.

Deputy Commerce Minister Nattawut Saikua said the committee tasked with handling accounting for the scheme did not report on the Bt260 billion losses but only mentioned 17 categories of agricultural produce under the subsidy programme.

Remaining rice in the state’s stockpiles is worth Bt226 billion and the total losses were recorded at Bt216 billion, not Bt260 billion.

The losses were not higher than those incurred in the previous government at Bt70-80 billion, he said.

A report from the committee said the government spent Bt661.224 billion to buy rice in the 2011-2012 and 2012-2013 harvest years while the total expenses were limited at Bt500 billion.

As of the closing entries on January 31 this year, the rice pledging scheme suffered a combined loss of Bt220.967 billion, and the loss from subsidising the second harvest in 2009 was Bt41.677 billion.

Moody’s Investors Service earlier warned that the government’s higher than expected loss in the rice scheme may jeopardise the country’s credit rating. (MCOT online news)


-- TNA 2013-06-08

[waza]

I am astounded, It took them days to write that fairy tale and made a incredibly bad effort of it. Their explanation is so far removed from the leaked facts that they may as well be from another planet. But I guess we just have to take Boonsong Teriyapirom word for it because he has no proof and it seems the losses wont be known till well after this governments term.

"The figures can be finalised only three years after the end of the pledging scheme this September."

But nothing to worry about the losses as they are actually beneficial to Thailand, economically and over 25% of the population is making more money.

"Mr Boonsong said the rice subsidy scheme, launched in late 2011, has contributed to the country’s gross domestic product (GDP) growth at 0.5-1 per cent while 14-15 million rice-cultivating households could sell their paddy at higher prices."

CMK did you write that?

Edited June 7, 2013 by waza

[NongKhaiKid]

Boonsong forgot to add that the government's priority now will be to prepare a new set of excuses and lies for release in early October.

[Thai at Heart]

I am astounded, seems the losses wont be know till well after this governments term. But nothing to worry about.

The figures can be finalised only three years after the end of the pledging scheme this September.

And he thinks Moody's are going to eat this? They gave an estimated loss in January, but now they can't?

[Roadman]

Yingluck and Boonsong between them do not even understand Economics 101 that in any project you have a budget and a forecast before you get any money allocated. The budget was the costings of what you were going to do, and the forecast allows you to update as you move through the project to show gains or losses. That these clowns do not even have any idea of what they are projecting to lose at any scenario is incompetence at its best. And these thevies are going to steal Baht 2 trillion to spend in the same incompetent way?

Moody's should kick there ass's on the world stage harder than it is getting kicked now.

[HiSoLowSoNoSo]

The ministry added that the government had already earned Bt120 billion from release of rice stocks. I thought it was Thailand

that should have earned Bt120 billion not the government, is he talking about how much they have lined their pockets with from this scam or?

[Thai at Heart]

The ministry added that the government had already earned Bt120 billion from release of rice stocks. I thought it was Thailand

that should have earned Bt120 billion not the government, is he talking about how much they have lined their pockets with from this scam or?

The government bought all the rice. It is their product to sell. Just not sure when and at how much of a loss.

[Noistar]

The ministry added that the government had already earned Bt120 billion from release of rice stocks. I thought it was Thailand

that should have earned Bt120 billion not the government, is he talking about how much they have lined their pockets with from this scam or?

freudian slip

[dcutman]

A report from the committee said the government spent Bt661.224 billion
to buy rice in the 2011-2012 and 2012-2013 harvest years.

Remaining rice in the state’s stockpiles is worth Bt226 billion.

(spent)Bt661.224 - (Worth)Bt226 = Bt335.224 Billion.

Is this not the number everybody is asking/wondering about?

I can now understand why they are having so much trouble with this complex accounting.

Edited June 8, 2013 by dcutman

[Thai at Heart]

A report from the committee said the government spent Bt661.224 billion

to buy rice in the 2011-2012 and 2012-2013 harvest years.

Remaining rice in the states stockpiles is worth Bt226 billion.

(spent)Bt661.224 - (Worth)Bt226 = Bt335.224 Billion.

Is this not the number everybody is asking for?

Where was that little chestnut hiding.

[Robby nz]

AS I wrote on another topic.

Whatever the number the money is lost, gone forever and can never be used to improve the lives of Thai's.

They apparently do not know how much rice they have in storage or what condition it is in and therefore what it is worth on the open market.

What we do know is that at least a fair proportion is rotten, as shown by the stuff given to the old people in Phitsanalok (reported at 40 tons) and the almost 20% the Ivory Coast had to dump from what they bought G 2 G.

Oh yes, then there was the report, from the BoT I think, that said farmers income had dropped 7.7% in the last year, don't know how much of that was rice farmers icome but the rice farmers seem to think their income has dropped.

[kimamey]

It's true the losses won't be known until the scheme ends but you can give an ongoing account year by year. Rice will come in and be paid for then it goes out and it's paid for. I've never heard Toyota ect. saying they don't know if they've made a profit because they haven't finished making cars yet.

I notice they don't know the storage costs either which is suspicious.

There's they old excuse of you we don't know the figures yet but we know you are wrong. It reminds me of the three draft bills that the PM said we shouldn't criticise until we'd seen them but she knew they'd be OK even though she hadn't seen them.

They will get money back when they sell the rice but it looks like it may not be much. This was always going to work at a loss as if it didn't it wouldn't be needed but it's the size of the loss and whether it helps farmers or not in the long term.

[Robby nz]

Hay did you notice how he managed to get in the "But the Dems" bit?

Is he going to be on the new PR committee?

[HiSoLowSoNoSo]

The ministry added that the government had already earned Bt120 billion from release of rice stocks. I thought it was Thailand

that should have earned Bt120 billion not the government, is he talking about how much they have lined their pockets with from this scam or?

The government bought all the rice. It is their product to sell. Just not sure when and at how much of a loss.

I thought that they used Bank for Agriculture and Agricultural Cooperatives (BAAC) money, a state enterprise for the rice pledging scheme, not their own.

[dcutman]

A report from the committee said the government spent Bt661.224 billion

to buy rice in the 2011-2012 and 2012-2013 harvest years.

Remaining rice in the state’s stockpiles is worth Bt226 billion.

(spent)Bt661.224 - (Worth)Bt226 = Bt335.224 Billion.

Is this not the number everybody is asking for?

I can now understand why they are having so much with this complex accounting.

You also need to include income from rice that has been sold .... But they can't tell you that cos it's a secret.

Sent from my shoe phone.

You are right, sorry.

The ministry added that the government had already earned Bt120 billion from release of rice stocks.

(spent)Bt661.224 - (Worth)Bt226 + (sold)Bt120 = Bt335.224 Billion. Bt215.224.

Plus finance and loan fees and warehousing/storage and spoilage loss. The Bt260 billion loss is right in the ballpark.

Edited June 8, 2013 by dcutman

[Thai at Heart]

The ministry added that the government had already earned Bt120 billion from release of rice stocks. I thought it was Thailand

that should have earned Bt120 billion not the government, is he talking about how much they have lined their pockets with from this scam or?

The government bought all the rice. It is their product to sell. Just not sure when and at how much of a loss.

I thought that they used Bank for Agriculture and Agricultural Cooperatives (BAAC) money, a state enterprise for the rice pledging scheme, not their own.

Not sure it's 100%, but at the end of the day it's in the governments hands. The loss will accrue inside the bank which is 100% owned.

The government owns the rice.

[moe666]

Talk about the worst case of smoke and mirrors. They are doing everything to hide the amount of money that has been flushed down the rice drain

[Mosha]

It's not possible to calculate the TOTAL losses yet but 260billion is about where the deficit stands just now. It's likely to go higher not lower.

By the way, we've heard all sorts from his monkeys but do you think we will hear from the organ grinder himself? It's his master plan after all but he seems unusually silent at the moment. I hope he's not feeling sick.

He's thinking.

[Gulfsailor]

Well. This sets an interesting precedent. I guess I won't file any corporate income accounts this year. I haven't sold all my inventory, so I have no idea if the company is making a loss or profit.... Thai RD will have to wait on those taxes.

[Thait Spot]

Government caught with pants down tries to spin and trips over its knickers.

[meatboy]

i wonder who's doing the stock taking? is it the same bloke that estimated the car tax refunds around 200% shortfall.

do they have those rice eating rats here in thailand?whole wharehouse's full can disappear overnight.

[Neilly]

Ministers give unclear explanation on rice pledging losses

[SICHONSTEVE]

Yingluck and Boonsong between them do not even understand Economics 101 that in any project you have a budget and a forecast before you get any money allocated. The budget was the costings of what you were going to do, and the forecast allows you to update as you move through the project to show gains or losses. That these clowns do not even have any idea of what they are projecting to lose at any scenario is incompetence at its best. And these thevies are going to steal Baht 2 trillion to spend in the same incompetent way?

Moody's should kick there ass's on the world stage harder than it is getting kicked now.

What are you on about!!!

What has economics got to do with bringing Thaksin home a free man, silly??

[drdoom6996]

Boonsong says not possible to calculate losses until scheme ends, stockpile sold.

And I am out of the country with Taksin.

[zig]

ou are right, sorry.

The ministry added that the government had already earned Bt120 billion from release of rice stocks.

(spent)Bt661.224 - (Worth)Bt226 + (sold)Bt120 = Bt335.224 Billion. Bt215.224.

Plus finance and loan fees and warehousing/storage and spoilage loss. The Bt260 billion loss is right in the ballpark.

Nope... (spent)Bt661.224 - (Worth)Bt226 + (sold)Bt120 = Bt335.224 Billion Bt215.224. Bt315.224

And some wonder that the government cannot arrive at the right figure..

[iancnx]

It is up to the people of Thailand to hold their government to account. The opposition has grounds enough to call for a vote of no confidence...... They may not win it at the first time of asking, but the more challenges made by opposing politicians, might just kick the media and world press into action, which might just filter enough knowledge down to the grass roots Thais in the towns and villages. Where I live everyone seems blissfully unaware of what the issues really are and the consequences that each and everyone of them will surely suffer at some point in the future. They appear brainwashed to me and are seemingly afraid to ask awkward questions, or it might be the appalling level of education (and the nature of that education) is what is really the crux of the unwillingness to hold officials to account.