Bt136 billion losses from rice subsidy in 2011/2012 crop

[webfact]

Bt136 billion losses from rice subsidy in 2011/2012 crop
By English News



BANGKOK, June 18 – The Finance Ministry reported losses from the rice pledging scheme in the 2011/2012 harvest season at Bt136 billion, according to Minister to the Prime Minister’s Office Varathep Rattanakorn.

He said the figure was concluded by the Finance Ministry’s accounting assessment sub-committee and reported to the National Rice Committee (NRC) yesterday.

According to the sub-committee, the government spent Bt352 billion to buy 21.7 million tonnes of rice in the 2011/2012 crop while Bt156 billion worth of rice remains in the stockpiles and the sold volume was Bt59 billion, leaving net losses of Bt136.908 billion.

The accounting assessment sub-committee could not conclude the losses in the 2012/2013 harvest season due to different figures on rice in the stockpiles, he said.

Relevant agencies were instructed to check rice stocks and report to the sub-committee, he said.

Mr Varathep said the Bt136 billion losses were estimated, but the actual losses, speculated to reach Bt260 billion, could not be calculated until rice is completely released from all stockpiles.

The NRC also instructed the accounting assessment sub-committee to conclude its figures on a quarterly basis and the next closing entries would be for May 31 this year, he said.

Meanwhile, Commerce Minister Boonsong Teriyapirom said the NRC meeting initially agreed to lower the pledging rice price of Bt15,000 per tonne to between Bt12,000-13,500 per tonne, while the price of jasmine rice will be settled in the next few months after thorough study and then will be proposed to the committee and the cabinet for consideration. (MCOT online news)

-- TNA 2013-06-18

[Thai at Heart]

The NRC also instructed the accounting assessment sub-committee to conclude its figures on a quarterly basis and the next closing entries would be for May 31 this year, he said.

So the figures they report in September will use figures from may?

[Totster]

omg

totster

[jaidam]

Correct me if I'm wrong but so far the only concrete evidence of any rice sales has been to Siam Indica ltd, which belongs to Arisman's wife who purchased rice for 5,000B per tonne and immediately re-pledged it for closer to 10,000B. All paperwork and documents were displayed during the censure motion last month.

[pedro01]

So let's get this right.

They brought 21.7M tonnes for 352Bn

They have 156Bn of rice left - although they don't say if this value is the purchase price or projected selling price. Let's figure it as the purchase price.

156Bn is 44.3% of 352Bn - meaning they sold 55.7% of the rice or approximately 12M tonnes for 59Bn - which by my calculations is about 4,900 Baht per tonne.

Is my maths incorrect here?

Edited June 18, 2013 by pedro01

[GentlemanJim]

I believe that the Moody's and other independent assessments will come to show the truth and losses will be close to the order of 260 Billion. I also wish a good journo or investigator would start looking closely at what Arisman's wife is up to and where the money is going.

We are all talking numbers here that lose any form of significance. 100 billion, 150 billion, 260 billion, we are discussing them so much we become desensitized as to actually how much that really is. To try and put in to perspective just how much has been 'lost', in the real world, the most expensive scientific research program going CERN in Switzerland (You all know it, the God particle - Higgs-Boson, that piece of astonishing engineering 100 meters below ground with a 27 KM circumference tunnel) the Large Hadron Collider, employs 4000 people and hosts up to 10 000 visiting scientists and cost 10 Billion dollars. The machine/project that has the whole world at the cutting edge of science and attracts scientists and grants from every country, cost 10 billion dollars. This Government just on rice pledging alone have lost in the order of 9 Billion Dollars. Think about that. That is a LOT of coin!

[AleG]

So let's get this right.

They brought 21.7M tonnes for 352Bn

They have 156Bn of rice left - although they don't say if this value is the purchase price or projected selling price. Let's figure it as the purchase price.

156Bn is 44.3% of 352Bn - meaning they sold 55.7% of the rice or approximately 12M tonnes for 59Bn - which by my calculations is about 4,900 Baht per tonne.

Is my maths incorrect here?

I don't think they've sold anything close to 12 million tons, from the top of my head I seem to remember they (claim) to have sold around 7M tons.

I wouldn't put much credence in any of the numbers, the only ones known more or less for certain are how much they have syphoned into the scheme, how that was used, on what, tonnage, sale figures, etc, etc... are all bound to have been "fixed" to paint a rosy picture, or at least not the likely abysmal failure of the policy.

Besides that, and a point I haven't seen anyone making when PTP and Yingluck the Immaculate wax poetic about how they have achieved DemocracyTM is that this scheme, and others from the government, have effectively poisoned whatever level of democracy there was in Thailand. They have created several money black holes that can't be plugged up, any party that sees the damage being done and would go to the polls of a promise of ending the unsustainable programs would be defeated by a party which would promise to continue or even expand them, thus the country will circle down the drain as the Greeks did.

Would anyone expect the rice farmers to support the Democrats come next election if they promise to end this scheme? of course not, they want more money and they'll vote for whoever promises them the most.

[slapout]

Now it is the Finance Ministery who is all knowing.and understanding of the rice pledge system, cost, losses, fees, etc.It has to be a miracle worthly of saint hood for all the unknowns to be deciphered over the past few working days. To put paid, finished, to this via the Minister to the PM, coming from the Finance Ministry, whose accounting methods gets confused in counting banded stacks of bills.

[whybother]

So let's get this right.

They brought 21.7M tonnes for 352Bn

They have 156Bn of rice left - although they don't say if this value is the purchase price or projected selling price. Let's figure it as the purchase price.

156Bn is 44.3% of 352Bn - meaning they sold 55.7% of the rice or approximately 12M tonnes for 59Bn - which by my calculations is about 4,900 Baht per tonne.

Is my maths incorrect here?

It seems that they haven't released detailed figures just so that you won't know if your maths is correct or not.

[kurnell]

Technically the money is not lost if it is in a politicians bank account

[GentlemanJim]

Technically the money is not lost if it is in a politicians bank account

So technically it is therefore missing, until we find out which politicians account!

[trainman34014]

Whatever figure they give it will be erroneous. Truth is they will never know how much money has been 'lost', and worse still, they won't care, as the losses won't be coming out of their personal pockets. A lot of people have got a lot richer out of this, but it's not the Farmers, it's the middle men.

[Ricardo]

Wonder whether they've remembered to include the storage & financing costs, for both still-in-store and claimed-to-have-been-sold stocks, there's plenty of wiggle-room there !

And if they really intend to cut the pledging-price, by between 10% & 20%, I think there might just be a few farmers who aren't too happy about this ?

Interesting times ahead !

[kurnell]

Technically the money is not lost if it is in a politicians bank account

So technically it is therefore missing, until we find out which politicians account!

If I was Thai I would insist that the people I vote into office should be honest and transparent.

[animatic]

The usual smoke and mirrors.

None or which will fool Moody's a jot.

Edited June 18, 2013 by animatic

[davehowden]

kurnell

Oh you are a joker

[iancnx]

Well we should welcome the publication of something.... Even if there is speculation as to what is at cost and what is at market price etc. no doubt that will come out in the wash and the figure will be adjusted accordingly?

Just as important is the hidden costs of the scheme. I suspect these are not in the above figures. So I should imagine the Thai tax payer and any affected farmers (those allegedly not fully paid) will be asking the following questions:

How much rice, if any, was misappropriated or stolen?

How much rice has been written off as spoilt?

What is the cost of road haulage and other transportation or plant hire?

What is the cost or silo, warehouse, or shed storage?

What is the cost of security and policing?

Who were the main contractors for all of the above? Were these government contracts subject of a transparent bidding process. Are the same contracts still in place?

Will the NRC be appointing independent auditors to verify what they (the NRC) has just provisionally reported to the Thai people?

[worgeordie]

If the real losses ever get disclosed, and the questioning gets really tough about where the rice and the money

went to, they will just dissolve Parliament , and in a couple of months arise again ,most likely

under an other brand new and squeaky clean political party name , and swear blind it was the last Government

that caused all the damage, nothing will change,pity the Thai populace they deserve so much better,if all that

money that has been wasted over the years, lost ,put into projects that never worked,etc,etc, its mind boggling really,Thailand

could have been up there with the likes of Singapore.

regards Worgeordie

[bigbamboo]

Correct me if I'm wrong but so far the only concrete evidence of any rice sales has been to Siam Indica ltd, which belongs to Arisman's wife who purchased rice for 5,000B per tonne and immediately re-pledged it for closer to 10,000B. All paperwork and documents were displayed during the censure motion last month.

Well that's a relief. At least Arisman can afford to pay the tax on his new Bentley.

[OzMick]

A question that should be asked of the PM - How much have you profited from this scheme?

[davehowden]

Thailand, the hub of incompetence and self interest, nothing will ever change?

[rubl]

THB 352 billion spent and only 136 billion lost till now, but with a trifling chance of further losses.

Till now the loss figure is 38.64%. Clearly a great success which surely should be repeated for a few more years as our Great Thinker said last year.

The description of "sold volume is 59 billion" sound interesting, but doesn't indicate a volume. Same with stockpile as high as 156 billion remaining. How much of that 21.7m tonnes from 2011/2012 remains? What about previous figures of 100 - 120 billion paid to BAAC already from rice stock sales ?

BTW a few days ago we had regarding 2011/2012 21.52m tonnes bought for 336.655 billion with 135 billion loss.

PS with first indication that more is spent on buying rice in 2012/2013 it's no longer surprising that the non-revolving fund of 500 billion needs an extra injection of 200 billion.

[Bagwan]

Well we should welcome the publication of something.... Even if there is speculation as to what is at cost and what is at market price etc. no doubt that will come out in the wash and the figure will be adjusted accordingly?

Just as important is the hidden costs of the scheme. I suspect these are not in the above figures. So I should imagine the Thai tax payer and any affected farmers (those allegedly not fully paid) will be asking the following questions:

How much rice, if any, was misappropriated or stolen?

How much rice has been written off as spoilt?

What is the cost of road haulage and other transportation or plant hire?

What is the cost or silo, warehouse, or shed storage?

What is the cost of security and policing?

Who were the main contractors for all of the above? Were these government contracts subject of a transparent bidding process. Are the same contracts still in place?

Will the NRC be appointing independent auditors to verify what they (the NRC) has just provisionally reported to the Thai people?

I think your imagination has runaway with you. It would be super nice if a body with a lot of weight behind it did ask all those questions - and kept asking them until they got some credible answers. However I think it more likely that there will be a massive shrugging of many shoulders and mutterings of SNAFU.

[rubl]

With THB 352 billion spent to buy 21.7m tonnes of rice resulting in a loss till now of 136 billion what additional amount has been spent in administration, process, storage, sales expenses, etc.? If included in the 352 billion it would suggest most of the rice is still on the mountain and even less has been sold.

The 'helpful information' provided by the Minister of the 'Good News' PM Office is raising more and more questions.

[waza]

More lies and cover ups. The leaked documents show that 660 billion baht has been spent, 260 billion baht of that is lost and there is over 17 million tons of rice rotting in storage. These number were backed up by the BAAC.......

Mr. Supat at the Bank of Agriculture said that 336 billion baht had been spent in the first year of the program through last September, plus another 125 billion baht after it was renewed for the crop year beginning in October 2012. http://www.nytimes.com/2013/02/08/business/global/thai-rice-subsidy-program-short-of-money.html?_r=0

The BAAC has only Bt20 billion of cash flow left - and the state-run bank has to spend money to finance other projects

Edited June 18, 2013 by waza

[pb1936]

There seems little point in speculating about losses incurred because the information released is likely to be a complete fabrication, and doubtless will remain so.

[laurab74]

Someone's loss is someone else's gain I suppose. If you buy rice at above the market price, you would expect to lose money, wouldn't you? I do hope some of the 136 billion found its way into small farmers' pockets. It sounds remarkably like the CAP in EU (Common Agricultural Policy) with its wine lakes and butter mountains. How do you raise farm incomes, I wonder, without paying over the odds?

[laurab74]

There seems little point in speculating about losses incurred because the information released is likely to be a complete fabrication, and doubtless will remain so.

The losses seem to be very high. I read, albeit some time ago, that Thailand used to be the No 1 exporter of rice in the world, but that the value of the exports was only $1 billion. I remarked it because it seemed such a pitifully small amount (compared to the businesses I was managing). $1 billion is only about 30 billion baht, if my math is correct...so to lose 4 1/2 times the total value of your exports seems to be a tad reckless, or as you say, a fabrication.

[pedro01]

Someone's loss is someone else's gain I suppose. If you buy rice at above the market price, you would expect to lose money, wouldn't you? I do hope some of the 136 billion found its way into small farmers' pockets. It sounds remarkably like the CAP in EU (Common Agricultural Policy) with its wine lakes and butter mountains. How do you raise farm incomes, I wonder, without paying over the odds?

You give subsidies to small farmers with a cap on how many tonnes per farmer you subsidize.

That way you get the money to the people that need it and ONLY to the people that need it.

[billd766]

Correct me if I'm wrong but so far the only concrete evidence of any rice sales has been to Siam Indica ltd, which belongs to Arisman's wife who purchased rice for 5,000B per tonne and immediately re-pledged it for closer to 10,000B. All paperwork and documents were displayed during the censure motion last month.

Well that's a relief. At least Arisman can afford to pay the tax on his new Bentley.

Was that the one that got burnt on the delivery truck?