Varathep defends Commerce Ministry on losses from rice pledging scheme

[webfact]

Varathep defends Commerce Ministry on losses from rice pledging scheme
By Digital Media

BANGKOK, Jun 15 - Minister of the Prime Minister's Office Varathep Ratanakorn insisted that losses from the government's rice pledging scheme was not as high as Bt260 billion as widely reported.

He said the Finance Ministry's accounting assessment sub-committee and the Commerce Ministry had different calculation methodologies for the losses from rice purchases over the past three harvest seasons.

The government spent Bt118.655 billion to purchase 6.92 million tonnes of paddy from the 2011/12 crop, he said, adding that the Commerce Ministry and the Finance Minister reported losses at Bt31 billion and Bt42 billion respectively.

In the 2011/12 second harvest, the minister said 14.6 million tonnes of paddy were bought at Bt218 billion and losses as reported by the Commerce Ministry and the Finance MInistry were Bt18 billion and Bt93 billion respectively.

He said Bt155 billion was spent to buy 9.9 million tonnes of rice in the 2012/13 harvest season but the final calculations have yet to be completed. (MCOT online news)


-- TNA 2013-06-15

[bigbamboo]

Fail.

[Tatsujin]

Not sure if im reading this right:

2011/2012 1st season losses = Bt31 billion and Bt42 billion = 73 BILLION

2011/2012 2nd season losses = Bt18 billion and Bt93 billion = 111 BILLION

TOTAL LOSSES = 184 BILLION BAHT

Well, I guess 184 is better than 260 in losses. Still one hell of a big loss tho.

[NongKhaiKid]

Another official pitches in saying the pledging scheme will not incur the losses claimed yet still no one knows the actual figures and may never do, well not the real ones anyway. He also points out the ministries involved have different methods of calculating which is a failure of government as why not just one unified system ?

Here we have the right way, the wrong way and the Thai government way

[AleG]

From what I remember there are 17 million tons of rice in stock looking for a buyer, Thai rice is about 40% more expensive than market price, so to sell it they'll have to lose 40%, at least, of the money they (xxxx, US!) paid for it. Rounding down to 15M tons, 15.000 per ton (not even counting the other expenses, which, allegedly represent a larger part of the budget), back of envelope calculation is around 90 billion more to add to the losses.

No wonder they don't want to talk about the rice in stock and how it factors in the loses of this scheme.

Edited June 15, 2013 by metisdead

[jaidam]

From what I remember there are 17 million tons of rice in stock looking for a buyer, Thai rice is about 40% more expensive than market price, so to sell it they'll have to lose 40%, at least, of the money they (xxxx, US!) paid for it. Rounding down to 15M tons, 15.000 per ton (not even counting the other expenses, which, allegedly represent a larger part of the budget), back of envelope calculation is around 90 billion more to add to the losses.

No wonder they don't want to talk about the rice in stock and how it factors in the loses of this scheme.

You are making the assumption that rice stored is not deteriorating in quality. Water damage, pests, mould, theft, all must be factored in so your 90 billion will be way too low.

[Neilly]

He said the Finance Ministry's accounting assessment sub-committee and the Commerce Ministry had different calculation methodologies for the losses from rice purchases over the past three harvest seasons.

[billd766]

Why don't they therefore publically layout ALL the methods used to calculate the costs and tell the truth?

How much they bought at what price?

How much they sold at what price

How much they still have in store and how much ALL the costs are and let the whole world know how honest and transparent they are?

Because they cannot tell the truth. If they do then the government would most likely collapse and most of them would be in jail.

[chainarong]

It is no use defending each other as we all know how you all work , you even walk crooked, for quiet some time this administration has come under the microscope when it comes to finance and they have failed on the issue of transparency every time, independent auditors should go over the rice pledge scheme and tell the people the truth, that's all that's asked.

[PoorSucker]

Personal attack removed.

[Bellweather]

Another official pitches in saying the pledging scheme will not incur the losses claimed yet still no one knows the actual figures and may never do, well not the real ones anyway. He also points out the ministries involved have different methods of calculating which is a failure of government as why not just one unified system ?

Here we have the right way, the wrong way and the Thai government way

A nice system here, get more than one ministry to produce figures each using their own calculating system so the government can pick the one it likes to make public. If neither suit then stick to the original tale that the final figures have to wait so see you in a couple of years and by the way all the critics are wrong anyway.

[slapout]

Another minister shows up in this 'whip around', throwing out numbers with no reference to a unit, other than billions. The PM as Chairman was a, no show, for yesterdays meeting between the math whizzes being quoted, and this 'delbert' is tasked to give a press release.

The program has farmers awaiting payment for their paddy, which is somewhere in the system. the Ag. bank says 40 million ton of paddy has been purchased from the start of program up to 2013, which translates to about 28 million tons of milled rice and then add paddy sold since the first of this year (at least one crop) up north.

We hear of different accounting methods, different number of participants in program, different time frame for calculation, differnt amount of rice involved, different amounts spent on rice and then the ccatch all term "IRRAILIVANT EXPENSES". which it seems, have to be found???

[OzMick]

Not sure if im reading this right:

2011/2012 1st season losses = Bt31 billion and Bt42 billion = 73 BILLION

2011/2012 2nd season losses = Bt18 billion and Bt93 billion = 111 BILLION

TOTAL LOSSES = 184 BILLION BAHT

Well, I guess 184 is better than 260 in losses. Still one hell of a big loss tho.

Not sure the quoted figures were intended to be added, I think rather how each calculated the loss. But how 2 agencies can look at the same transaction and get a result B75 billion different is a real 7-day wonder.

[A Member]

There's an old saying about being in a hole and stopping digging, so apt for the government who are in a hole over this scheme and are now pulling in in on themselves.

It's a PR disaster that even the new all singing, all dancing PR team won't be able to handle as if by some miracle the government actually produces the most accurate figures in the world now nobody is going to believe them.

[rubl]

The figures get interesting especially those not mentioned. Possibly 135 billion loss over 2011/2012 (2 seasons), with only 337 billion spent for the 21.52m tonnes of paddy. That's 'only' 40%, but at least we still have all of the rice in a growing mountain.

2012/2013 starts good with 155 billion for 9.9m tonnes paddy. An increase in paddy by 43% in volume, but only 30% in money. We're getting thrifty I guess. The second season must be a real miracle to behold when this show manages to excel.

With BAAC having spent 614 billion, only got less than 120 billion returned by the government and with the MoC indicating to need about 200 billion extra, the figures get more and more interesting. Fortunately this 700 billion is not part of the National Budget and the money is lent from a government bank. Especially the difference between the guestimated losses as reported by the Finance Ministry and by the Commerce Ministry, will ensure Moody's will be pleased.

[assayer]

<sup>Not sure if im reading this right:
2011/2012 1st season losses = Bt31 billion and Bt42 billion = 73 BILLION
2011/2012 2nd season losses = Bt18 billion and Bt93 billion = 111 BILLION
TOTAL LOSSES = 184 BILLION BAHT

Well, I guess 184 is better than 260 in losses. Still one hell of a big loss tho.</sup>

^{And, with 2012-2013 not in yet does that not sound like maybe 260 billion is a good number??}

[OzMick]

Wasn't each ministry supposed to spin their own reports so there would be no contradiction? Less than a week and we have a spokesman from the Ministry of Lies pitching in to help a severe credibility defecit deficit.

[rubl]

Possibly between 48 and 135 billion loss over 2011/2012 (2 seasons), with only 337 billion spent for the 21.52m tonnes of paddy. As we possibly know today, uptill now although not explicitly said..

Mind you if a 'few' billion Baht loss can be indicated I would assume that the Minister of the Prime Minister's Office Varathep Ratanakorn can also provide a few more details as to how this loss is calculated, what items incurred the loss, things like that. To just say that there is a possible loss of between 48 to 135 billion is avoiding the need to be specific. Doesn't this 'good news only' government feel a need to be specific in all glorious items so profitable to poor farmers? A nice colourful picture to simplify the relation between billions and rolls-royces and other fancy cars?

[slapout]

Another newspapers press interview, allowed that there is a 134 billion loss as per the PM's office. So now we have 2 different numbers from the PM's office, 1 from commerce, 1 from finance, 1 from ag bank. It may be that it will take a real incentive to get truthful, accurate answers.

If this is the type of transparency/accounting we can expect from this bunch, wait until they get 350 billion for water projects and then 2 trillion for other incendental spending sprees they go on. These people are probably the same ones who wanted to play jacks on the school ground and then poketed the jacks they managed to pick up, by hook or crook. They were called 'bullies' then, now they seem to be called ministers or aids to same.

[ChrisY1]

I'm sure major credit ratings agencies will be on their case soon enough...when 2 trillion baht in loans is being hunted....I'm certain financiers will be taking advantage of poor ratings....and the more they try to justify their massive losses in rice, rubber and what ever else they scam money on......the more expensive loans will become.....there ain't 2 trillion in Thailand for borrowing!

[bigbamboo]

Doesn't this government realise that all these contradictory statements and figures just make them look even more incompetent.

And wouldn't the best solution be to ignore the monkeys and go straight to the organ grinder in Dubai and ask him for the true numbers? If he can't tell you then nobody knows.

[ginjag]

I am trying to put myself in the governments position on this, The actual idea of the sceme was brilliant ??? it was never a loser ???

There were always BIG question marks from the onset and now is the time to defend and worm your way out of it......NEVER -- dig your own grave-sure

[longway]

The figures get interesting especially those not mentioned. Possibly 135 billion loss over 2011/2012 (2 seasons), with only 337 billion spent for the 21.52m tonnes of paddy. That's 'only' 40%, but at least we still have all of the rice in a growing mountain.

2012/2013 starts good with 155 billion for 9.9m tonnes paddy. An increase in paddy by 43% in volume, but only 30% in money. We're getting thrifty I guess. The second season must be a real miracle to behold when this show manages to excel.

With BAAC having spent 614 billion, only got less than 120 billion returned by the government and with the MoC indicating to need about 200 billion extra, the figures get more and more interesting. Fortunately this 700 billion is not part of the National Budget and the money is lent from a government bank. Especially the difference between the guestimated losses as reported by the Finance Ministry and by the Commerce Ministry, will ensure Moody's will be pleased.

Whats also interesting that their purchases total about 492 billion baht, so where has the other 122 billion been spent?

[rubl]

Objectively the Minister of the Prime Minister's Office Varathep Ratanakorn has provided some data with loss figure 'statements' from two Ministrial departments only differing by a trifling THB 87 billion. He said 337 billion was spent on 21.52m tonnes of rice. He didn't say if the 337 billion spent was just on rice, but it seems implied. That means the normal administrative costs of a few billion, handling/preserving/storage costs, various other minor charges seem excluded. Also very unclear what the loss relates to and how.

I'm sure that a former CEO PM and the current PM who was a former company president will be appelled by this type of financial reporting. SET would suspend trading of shares in such company, the Company share holders would demand the head of the CEO and/or president, etc., etc.

Mind you, as foreigner I not only do not understand but most likely will be unable to understand this level of Thainess in higher economics, administration and auditing.

[SICHONSTEVE]

Why don't they therefore publically layout ALL the methods used to calculate the costs and tell the truth?

How much they bought at what price?

How much they sold at what price

How much they still have in store and how much ALL the costs are and let the whole world know how honest and transparent they are?

Because they cannot tell the truth. If they do then the government would most likely collapse and most of them would be in jail.

Just thought that I would point out that you have spelt a word wrong near the end.

Surely you mean SHOULD, don't you??

[Thai at Heart]

The figures get interesting especially those not mentioned. Possibly 135 billion loss over 2011/2012 (2 seasons), with only 337 billion spent for the 21.52m tonnes of paddy. That's 'only' 40%, but at least we still have all of the rice in a growing mountain.

2012/2013 starts good with 155 billion for 9.9m tonnes paddy. An increase in paddy by 43% in volume, but only 30% in money. We're getting thrifty I guess. The second season must be a real miracle to behold when this show manages to excel.

With BAAC having spent 614 billion, only got less than 120 billion returned by the government and with the MoC indicating to need about 200 billion extra, the figures get more and more interesting. Fortunately this 700 billion is not part of the National Budget and the money is lent from a government bank. Especially the difference between the guestimated losses as reported by the Finance Ministry and by the Commerce Ministry, will ensure Moody's will be pleased.

Whats also interesting that their purchases total about 492 billion baht, so where has the other 122 billion been spent?

I think that is the outstanding balance after funds being returned through some sales. I read somewhere that baac had received 120bn odd back from sales revenue.

[longway]

The figures get interesting especially those not mentioned. Possibly 135 billion loss over 2011/2012 (2 seasons), with only 337 billion spent for the 21.52m tonnes of paddy. That's 'only' 40%, but at least we still have all of the rice in a growing mountain.

2012/2013 starts good with 155 billion for 9.9m tonnes paddy. An increase in paddy by 43% in volume, but only 30% in money. We're getting thrifty I guess. The second season must be a real miracle to behold when this show manages to excel.

With BAAC having spent 614 billion, only got less than 120 billion returned by the government and with the MoC indicating to need about 200 billion extra, the figures get more and more interesting. Fortunately this 700 billion is not part of the National Budget and the money is lent from a government bank. Especially the difference between the guestimated losses as reported by the Finance Ministry and by the Commerce Ministry, will ensure Moody's will be pleased.

Whats also interesting that their purchases total about 492 billion baht, so where has the other 122 billion been spent?

I think that is the outstanding balance after funds being returned through some sales. I read somewhere that baac had received 120bn odd back from sales revenue.

Its not how its reported in the OP; that could be The Nation being sloppy, but If they still can't get their stories straight after more than a week, things must be unbelievably bad.

Edited June 15, 2013 by longway

[siampolee]

What might be an interesting matter would be a revelation of senior P.T.P. party members both here and abroad current financial status. One is inclined to ask where has the money gone ?

This scam scheme was put into place to benefit one family and their brown nosing acolytes nothing more nothing less. No wonder ministers are squirming when pertinent questions are asked with regards to financial practices and the current account status.

[allan michaud]

Totally meaningless figures without the facts to back them up. It's impossible to calculate the real loss, as with so much unsold it's growing everyday. Rice may have a long storage life but it still loses value. Moody's must be rolling around on the floor in hysterics at these comments.

Then of course there are the Government to Government deals, like the apparent stitch up of an African country who complained that around 25% of what was delivered was rotten (I reckon "Thainess" took over and they assumed that the stupid foreigners wouldn't know the difference). How on earth are they ever going to sell this ever increasing pile of rice if they just try to rip everyone off.

Morons of the first degree.

[Baerboxer]

More figures and nonsense. The figures are the figures - any reputable qualified accountant or auditor could produce the true calculated predicted loss. That's what finance people do. The goverrnment know the reality - how much and where it's gone. But, this won't be revealed. More and more figures and confusion will be the name of the game - muddy the waters, cloud the view.

How long before some bright spark produces figures that show no loss, or even a profit? And, good old Tarrit will investigate and find out that the previous government's "loss making" scheme was really the issue.

The government clearly believe, and probably with some reason, that many people will simply accept this bs without question. What is worrying is they seem arrogant enough to think that the credit agencies and the international financial markets will also take it in.