Thailand cuts rice-buying subsidy after big losses

[Tatsujin]

Thailand the hub of Asian rice imports.

Thailand: The hub of warehouses full of stinking, rotting rice, that was bought at too high a price and now can't be sold to make a profit (not that that was ever the intention in the first place).

[DLock]

Well I was thinking months before an election..... Now I am thinking weeks. BUT Abhisit has to remain calm, and play his cards very very carefully if the slippery one in Dubai is to be outwitted.

Agreed, but he's sitting on a pair of Kings.

Thaksin is sitting on a 3 and a 9 off.

And another King just showed on the Flop.

Does he go all in, or does he slow roll Thaksin and try and take him out?

[kotsak]

Tulips anyone?

[AleG]

"The price revision is due to .......... the weakening of the baht," Teerat

Oh, please.

Its around the same rate as when they made the promise

While other exports not only didn't crash spectacularly as rice did during the same period, but actually increased in volume and value. So, no sale.

[SICHONSTEVE]

'Thaksin thinks, Pheua Thai does'.

Another policy by the mentor fails, another dent in his reputation. The party better come up with a few more thinkers, but from the ludicrous remarks of Chalerm and Plodprasop to the silence of the PM it's clear they haven't a clue.

An idiotic policy from the beginning. along with the first car tax reduction policy, aggravating Bangkok's traffic jams. Everybody knows there are not enough roads in Bangkok for the vehicles present, but the fools in government increase the number of vehicles.

Is it possible to be so foolish?

Clearly it is!!!

[thaiguzzi]

The country has paid its farmers around 50 percent more than the market value for rice since 2011 in an effort to boost incomes in the rural heartlands of the ruling party.

Wrong: The country has paid the rice mills around 50% more than the market value.

The rice farmers selling their crop to the rice mills received the same pittance as the years before.

+1.

[GentlemanJim]

From The OP

This year Thailand is forecast to buy 22 million tons of the grain at a cost of up to 500 billion baht, a cabinet statement said.

A cap of 500,000 baht will be introduced for each family per harvest.

Doesn't that mean that if 500 000 baht is the cap per family then there is enough for 1000 000 families ! I understand there are only 36 000 Farmers registered for this. Where is 22 Million tons of rice coming from and where is all that money going to?

[Thai at Heart]

From The OP

This year Thailand is forecast to buy 22 million tons of the grain at a cost of up to 500 billion baht, a cabinet statement said.

A cap of 500,000 baht will be introduced for each family per harvest.

Doesn't that mean that if 500 000 baht is the cap per family then there is enough for 1000 000 families ! I understand there are only 36 000 Farmers registered for this. Where is 22 Million tons of rice coming from and where is all that money going to?

The 36k farmers was a number just for Ayutthaya registered with baac. Edited June 20, 2013 by Thai at Heart

[joeaverage]

be a good time to shop for nearly-new used pickups in the north.

of course it had to be done, far better than not buying rice at all until the market corrects and the stock is sold off

Edited June 20, 2013 by joeaverage

[Ricardo]

"The price revision is due to .......... the weakening of the baht," Teerat

Oh, please.

Ir rice is priced/sold in US$ on the world-market, then the recent weaking of the Thai Baht would increase what the government gets, and reduce the losses, when it manages to find a buyer for some of the riceberg.

So the truth is exactly the opposite, of what the poo-yai says, why am I not surprised ?

The Commerce Ministry informed the Finance Ministry that 2.9 million tonnes of rice were missing from an official survey – a volume which Ms Supa described as impossible.

This is a huge amount which is significant in terms of accounting and it must be sorted out, she said. (MCOT online news)

Ooooops. Another 10%+ loss.

What the heck, it's only public-money, after all !

[webfact]

Thailand is retreating from its disastrous rice subsidy program, but not enough

BANGKOK: -- After years of stubbornly resisting widespread criticism over a populist rice subsidy policy, Thailand is finally showing signs that it might be willing to backtrack, but its reluctant retreat probably won’t be enough to reverse a dramatic plunge in its exports.

The country has an unusual approach to rice farming. Rather than pay famers a direct subsidy, the new government fulfilled an election pledge in 2011 to buy unlimited quantities of rice from its farmers at up to 50% over the market price.

The poor rural farmers who form the core of the government’s political base jumped at the opportunity, but it was an economic disaster—India and Vietnam quickly undercut Thailand’s position as the world’s biggest rice exporter, and the government got stuck with over 17 million tons of overpriced rice, which is costly to maintain and can only be stockpiled for a year or so.

Prime Minister Yingluck Shinawatra’s government, which has been facing a barrage of criticism from opposition politicians over the rice scheme, isn’t backing down entirely, announcing on Wednesday [more...]

Full story: http://qz.com/95785/thailand-is-retreating-from-its-disastrous-rice-subsidy-program-but-not-enough/

-- QUARTZ 2013-06-20

[WAERTH]

Well this really is quite a hole the Shin clan dug for themselves.

Basically they are damned if they go on with the scheme and damned if they cancel or lower it. There does not really seem to be any good way out on this one.

And it could not have happened to a "nicer" group of people

[Baerboxer]

'Thaksin thinks, Pheua Thai does'.

Another policy by the mentor fails, another dent in his reputation. The party better come up with a few more thinkers, but from the ludicrous remarks of Chalerm and Plodprasop to the silence of the PM it's clear they haven't a clue.

An idiotic policy from the beginning. along with the first car tax reduction policy, aggravating Bangkok's traffic jams. Everybody knows there are not enough roads in Bangkok for the vehicles present, but the fools in government increase the number of vehicles.

Is it possible to be so foolish?

This would have been a wonderful policy but for one thing. The mentor forgot Thailand does not have the world monopoly for producing and selling rice. He's not used to having to deal with competitors and free market forces. Doh!

[notmyself]

Basically they are damned if they go on with the scheme and damned if they cancel or lower it. There does not really seem to be any good way out on this one.

Shutting it down straight away is surely the only option. Political suicide though.

[Halion]

At last logic prevails and the brown mater hits the revolving blades. This whole scenario was a vote buying and corrupt exercise in cronyism and the albatross is hovering over their heads.

Stupidity at this level must surely lead many to the realisation of the gross incompotence and level of corruption exhibited by this current cast of moral and social syncophants and the true measure of the Shiniwatra clan.

[iancnx]

Basically they are damned if they go on with the scheme and damned if they cancel or lower it. There does not really seem to be any good way out on this one.

Shutting it down straight away is surely the only option. Political suicide though.

Shutting it down is the only honourable option!

[Traveling Sailor]

At last logic prevails and the brown mater hits the revolving blades. This whole scenario was a vote buying and corrupt exercise in cronyism and the albatross is hovering over their heads.

Stupidity at this level must surely lead many to the realisation of the gross incompotence and level of corruption exhibited by this current cast of moral and social syncophants and the true measure of the Shiniwatra clan.

Unfortunately this is Thailand, where logic does not prevail. In other countries the 2nd sentence would probably be true, but not here. Here, most people are blindly loyal and cannot think for themselves (thanks to the Thai school system).

[Robby nz]

There is a sort of a way to end the subsidy but it does not answer the problem of how to get rid of the rice mountain.

Sure I read somewhere that the Govt has budgeted for 100 billion loss from the next crop.

If this is correct or whatever the number is then:

Policy statement.

The rice pledging scheme will end today.

The projected budget loss for the coming seasons loss of (???? will be divided up equally between all rice farming families and paid out directly to the farmers, this will be done in a completely open and transparent manner.

The farmers are then free to sell the new seasons crop for market price as they have in the past.

As the rice in storage is sold there will be a true and correct accounting of quantity and price sold and each sale will be made public.

A farmers fund will be set up and 50% of all funds received from the sale of stored rice will be paid into the farmers fund managed by the BOT and will be a matter of public record.

Each year on the date the scheme ended the funds received by the farmers fund will be paid out as above.

Accrued interest on the farmers fund will be retained by the bank until such time as the last of the stockpiled rice is sold then the fund will become a voluntary savings fund that farmers will be invited to join.

At no time will new seasons rice be allowed to be stored or mixed with old stock so buyers can be assured of the quality of the rice they are buying.

Signed, Ministry of never never.

[aguy30]

15,000 in the pledge for white rice. Are they still paying 20,000 for Hom Maliwas that also reduced?

Edited June 20, 2013 by aguy30

[finnomick]

Shoot me down in flames if I've got the whole scenario wrong, but aren't there are two types of farmers selling their rice ? There are those who sell to the government under the rice pledging scheme who get an inflated guaranteed price, and those who sell to the rice mills. The farmers who sell under the rice pledging scheme have to take their rice to ' certain ' mills on a date advised by the mill/government. They cannot just turn up with a truck/pickup load of rice as and when. The farmer who turns up with his rice when he chooses gets paid cash there and then but the price is lower than that pledged. Last year, the price around here after the first week was around 11,000 baht per tonne.

The country has paid its farmers around 50 percent more than the market value for rice since 2011 in an effort to boost incomes in the rural heartlands of the ruling party.

Wrong: The country has paid the rice mills around 50% more than the market value.

The rice farmers selling their crop to the rice mills received the same pittance as the years before.

So, taking the above post into consideration along with the announcement that the price pledged for this harvest will be lower than before, the mills will hit the normal farmer with prices way below 11,000.

Quote :- The government has previously said it is confident that it can find buyers for it's rice on world markets at a price that will raise the living standards of it's farmers : end quote. I don't see how the government can expect to raise the living standards of it's farmers when the price for the next crop will be way lower than last year with a possible ' free for all ' at the mills when the farmers who have previously been pledged a price may find the mills offering the same as the government. The only people who will lose are the poorest farmers but then they'll have their Farmer's Bank credit cards to rely on, won't they ?

[Roadman]

Cutting paddy pledging price fails to end losses

By English News

BANGKOK, June 20 – The government’s decision to lower the pledging price of paddy to Bt12,000 per tonne will minimise losses from the subsidy scheme but the new stock will add a blow to the remaining stockpiles from the two previous harvest seasons which have yet to be sold to buyers, a senior official said.

Supa Piyajitti, deputy permanent secretary for finance, said the additional purchase from the 2013/2014 harvest season will add to the stockpiles from the 2011/2012 and 2012/2013 crops.

If that is the case, the announced losses of Bt130 billion for the first harvest season will be higher, she said.

The National Rice Policy Committee on Tuesday decided to reduce the pledging price of paddy from Bt15,000 per tonne to Bt12,000 per tonne, hoping to quell widespread criticisms against the controversial rice pledging programme.

Ms Supa said warehouse inspection officials will be requested to hold a one-day simultaneous check at 1,500 rice mills under the rice pledging scheme to prevent grain transport from one rice mill to another.

The Commerce Ministry informed the Finance Ministry that 2.9 million tonnes of rice were missing from an official survey – a volume which Ms Supa described as impossible.

This is a huge amount which is significant in terms of accounting and it must be sorted out, she said. (MCOT online news)

-- TNA 2013-06-20

2.9 million tonnes missing, a volume described as impossible. Ms Supa needs to realise that when incompetent mafia populists are in control then anything is possible. And awww how sweet...someone is also including that there are also 2012/13 losses. Shinawatra incompetence at its best. They do not have a clue how to run a business only how to buy, bully and lie their corrupt way through at the Thai populace's well being at a higher level of corrupt and incompetent cost than what Isaan have ever faced before. The return for a measly ฿500 per 4 years that Isaan sells its soul for.

[webfact]

PM: Paddy pledge price flexible in response to world market price
By English News

BANGKOK, June 20 - Prime Minister Yingluck Shinawatra confirmed today the government will proceed with its rice pledging scheme but said the pledge price will be flexibly related to that of the world market.

The prime minister said the scheme will continue but in the long term, the agricultural sector will be overhauled for good balance of the whole system.

Regarding the cabinet resolution to cut the pledge price from 15,000 to 12,000 baht per tonne as proposed by the National Rice Policy Committee, Ms Yingluck said provincial governors and ministers are assigned to explain the decision to farmers.

The cabinet’s resolution is for off-season paddy and the government must consider the global market price and farmers’ income as well as its own fiscal discipline, she said.

It is difficult to keep all the factors in balance, she said, but emphasised the government is ready to adjust the price if the world market trend is on the rise. She affirmed that the government wants to see farmers’ quality of life improve.

Regarding the farmers’ request that the acceptable pledge price is 13,500 baht per tonne, the National Rice Policy Committee will take it into consideration, she said.

Deputy Prime Minister and Finance Minister Kittiratt Na Ranong also echoed the premier's comment, saying if the global rice prices increase, the government is ready to readjust the rice pledge for better returns to farmers.

The new condition of the rice pledging scheme approved by the cabinet takes effect June 20, accepting the pledge price for a maximum of 500,000 baht for each farming household, while the reduction of the pledge price to 12,000 baht will take effect June 30. (MCOT online news)


-- TNA 2013-06-20

[whybother]

as well as its own fiscal discipline

[Jay Sata]

Rice prices are heading down with Thailand returning to the market. Hard to see how they'll shift the stockpile or keep the farmers happy.

Thailand's agriculture is stuck in the middle of the last century and will never deliver decent returns.

[GentlemanJim]

IMPORTANT

I am unsure where to put this info so have opted for the current rice thread. We just a had a call from a close family friend who works in the food industry. He has just said that whatever you do, do not buy any cheap Thai white rice. There will be lots coming on sale soon at low prices. The brand/packaging belongs to one of the biggest food brands in Thailand and it will be sold in supermarkets that I am not willing to name either. You are clever enough to know and work it out when you see it. We are told on 100% reliable info that they are taking a lot of the old rice and washing it in formalin to make it look white again. Eat at your peril, you have been warned.

[whybother]

IMPORTANT

I am unsure where to put this info so have opted for the current rice thread. We just a had a call from a close family friend who works in the food industry. He has just said that whatever you do, do not buy any cheap Thai white rice. There will be lots coming on sale soon at low prices. The brand/packaging belongs to one of the biggest food brands in Thailand and it will be sold in supermarkets that I am not willing to name either. You are clever enough to know and work it out when you see it. We are told on 100% reliable info that they are taking a lot of the old rice and washing it in formalin to make it look white again. Eat at your peril, you have been warned.

That's the sort of thing that you see "shared" on Facebook.

[rubl]

IMPORTANT

I am unsure where to put this info so have opted for the current rice thread. We just a had a call from a close family friend who works in the food industry. He has just said that whatever you do, do not buy any cheap Thai white rice. There will be lots coming on sale soon at low prices. The brand/packaging belongs to one of the biggest food brands in Thailand and it will be sold in supermarkets that I am not willing to name either. You are clever enough to know and work it out when you see it. We are told on 100% reliable info that they are taking a lot of the old rice and washing it in formalin to make it look white again. Eat at your peril, you have been warned.

That's the sort of thing that you see "shared" on Facebook.

It's too easy to write up new conspiracy theories. The internet is like the 'World Wild Web'.

[Thaddeus]

The cabinet’s resolution is for off-season paddy and the government must consider the global market price and farmers’ income as well as its own fiscal discipline, she said.

Two years too late for that.

Oh, no, it was the votes first wasn't it.

[rubl]

The cabinet’s resolution is for off-season paddy and the government must consider the global market price and farmers’ income as well as its own fiscal discipline, she said.

Two years too late for that.

Oh, no, it was the votes first wasn't it.

Correct. The THB 136 billion came second only.

[webfact]

Private sector believes rice in pledging scheme might be rotten

BANGKOK, 20 June 2013 (NNT) - The Thai Rice Exporters Association expresses a belief that there is rotten rice in the government’s stock due to a lack of storing space and bad storage conditions.

Honorary Chairman of the Thai Rice Exporters Association Chukiat Opaswong said there might be as much as 17-18 million tons of rice under the government’s rice pledging program being kept in stock. Most of the them had been kept in the warehouses for a long time as related officials were unable to sell them. Therefore, chances were that some of the rice would become rotten, Mr Chukiat said.

He went on to say that the conditions of rice in stock also depend on the efficiency of participating rice mills which own warehouses. He called on the government to strictly inspect whether the rice was properly stored.

Meanwhile, Honorary Chairman of the Thai Rice Mills Association Watthana Rattanawong said the rice in stock has very little chance of rotting if it has been treated under a standardized procedure. He however admitted that if the rice has not received proper fumigation against dampness, chances of rottening are high.


-- NNT 2013-06-20