Price cut 'not a solution'; Academics skeptical of Thai govt move: Pledging scheme

[webfact]

Price cut 'not a solution'
Wattana Khamchu,
Olan Lertrudtanadumrongkul
The Nation



Academics skeptical of govt move; Pheu Thai to brief MPs on appeasing farmers

BANGKOK: -- The ruling Pheu Thai Party is calling a meeting to brief party MPs on how to assuage upset farmers following the reduction in the pledging price of rice, even as academics yesterday argued that the price cut will not help resolve the financial losses and corruption problem.

A senior fellow at the Thailand Development Research Institute, Nipon Poapongsakorn, spoke at a seminar on "Whether the reduction of pledging price for rice will help solve the loss and corruption problems?" held by the Thai Journalists Association in cooperation with the Isara Institute.

Nipon said that most of the current corrupt activities occurred during the release of rice from stockpiles, which had not been conducted in a transparent manner.

The reduction in the pledging price had not reduced any benefits earned by the rice mills. While the government had not revealed any sales information on the rice, only some of the losses could be cut by reducing the pledging price.

Nipon said the government had yet come up with measures to plug corruption loopholes in the rice-pledging scheme, especially those selling activities of high-level authorities. The activity of siphoning the money from farmers would remain, despite the reduction in prices.

Nipon said the government should abandon regulations allowing any rice mill to take seven days to convert paddy into rice in order to prevent them from having time to bring cheap rice from neighbouring countries to replace the pledging rice set for delivery.

Meanwhile, Wiboonlasana Ruamraksa, director-general of the Internal Trade Department, said that in operating the rice-pledging scheme, authorities had not ignored measures set up to prevent corrupt activity. The committee was seriously in charge of the problem.

She said the reduction in the pledging price might result in some drop in corruption activity - but more efforts should be made to further cut it.

Wiboonlasana said she had not seen how the Finance Ministry's subcommittee overseeing the rice-pledging scheme's accounting, had calculated their balance sheet based on the highest cost assumptions.

Farmer representative Rangsan Kasulong said he would lead farmers to petition PM Yingluck Shinawatra on how the rice-pledging price reduction is unacceptable.

He said farmers had faced not only higher wage costs but increases in land leasing from Bt500-Bt700 to Bt1,000-1,500 per rai. He said price reduction would not help root out corruption, which has plagued the scheme from the start.

"Corruption is suspected at every step - right from the registering of farmers to the unusually high rice of planting areas, and irregularities in rice shipments from one miller to another. Irregularities are also suspected because the government cannot tell how much rice has been sold," he said.

Appointed Senator Yuthana Thaipakdee said he believed three private companies had reaped as much as Bt15 billion profit in the alleged irregularities involving the sale of packed rice under the Commerce Ministry's low-cost Blue Flag programme.

He said the Bt15 billion is added to the state's losses from the rice-pledging scheme and the government must be held responsible for the losses.

Meanwhile, the Pheu Thai Party has moved to stem farmers' growing discontent over the government's move to revise down the rice pledging price, following a leaked report of the scheme's huge losses.

Pheu Thai Party spokesman Prompong Nopparit will tomorrow hold a meeting so that concerned ministers can guide MPs on how to explain to farmers why the rice pledging price has dropped from Bt15,000 to Bt12,000 per tonne.

The government is facing growing pressure from farmers who have threatened to rally against the decision to cut the price.

Prompong said the government would come up with handbooks explaining details about the scheme to prevent the Opposition from distorting facts surrounding the scheme to discredit the government.

An opinion survey has found that more than 80 per cent of respondents believe the rice-pledging scheme was hit heavily by corruption. The survey was carried out by Assumption University's Abac Poll among 1,432 residents of 17 provinces from June 19-22.

Meanwhile, Phichit provincial Governor Chakrarin Plianwong ordered 33 rice millers involved in the rice-pledging scheme to stop shipments of rice from June 22-29. He said official inspections have revealed that more than 4,000 tonnes of rice pledged by farmers and another 4,000 tonnes of rice under the pledging scheme of the Marketing Organisation for Farmers (MOF) had disappeared from a warehouse in Photalay district. The governor instructed local police to be stationed at rice mills and ordered the MOF to file a police complaint over the missing rice.

The inspection was carried out after farmers in Phichit cried foul that they had not received money and certifications, which show how much rice they had pledged with the rice millers.


-- The Nation 2013-06-24

[Robby nz]

The activity of siphoning the money from farmers would remain, despite the reduction in prices.

Indeed, so much for helping the farmers.

Meanwhile, the Pheu Thai Party has moved to stem farmers' growing discontent over the government's move to revise down the rice pledging price, following a leaked report of the scheme's huge losses.

I see it had to take a "leaked report" to stir the Govt into action, without that things would have been just fine.

Prompong said the government would come up with handbooks explaining details about the scheme to prevent the Opposition from distorting facts surrounding the scheme to discredit the government.

Was wondering what proven facts they had given to be distorted?

Hasn't the whole thing discredited the Govt enough without anyone else having to do anything?

[NongKhaiKid]

The handbooks to explain the situation are likely to be in line for an award in the category of " Works of Fiction ".

[StefanBBK]

This wohle rice scheme is not well thought through. Better than price cuts would be direct help to farmers, i.e. xbaht per rai farmed. The rest will have to follow market rules. Demand will dictate price.

sad to say, if thai rice cant compete with world proces, it is doomed.

Only way out would be to produce excellent quality, that can demand high price.

pledging itself is not a good idea, never mind how much.

Sent from my GT-I9100 using Thaivisa Connect Thailand mobile app

[Bellweather]

How can the government produce handbooks to explain details of the scheme when they don't know themselves ? In recent weeks we have seen the Commerce and Finance Ministries publicly disagree over facts and figures, a senior civil servant said figures on recent losses were " not wrong " and there's the PM who looks even more lost then usual when asked about the scheme and changed her delivery 3 times in 4 days.

Will the first line of these handbooks start " once upon a time " ?

[Mampara]

Make the balance sheet public, so that we can all scrutinise and query the contents, after all this topic is of major concern to all in Thailand.

[jonclark]

Wouldn't it just be cheaper to pay the farmers to not grow rice?

[Ricardo]

Will the first line of these handbooks start " once upon a time " ?

And the story-book will end "and they all (except the poor farmers) lived Amply Richly ever after", perhaps ?

The way to avoid distortion-of-facts, is to start telling the full truth about the scheme, so that will never happen !

[winstonc]

it gets better by the day here im loving it,,me thinks the farmers may one day open there eyes because,i see any benefit going there way,,its sad because there doing the back braking work,,,,i see them in there fields in the heat of the day,,,,how do they do it,,,,,,

[Thai at Heart]

it gets better by the day here im loving it,,me thinks the farmers may one day open there eyes because,i see any benefit going there way,,its sad because there doing the back braking work,,,,i see them in there fields in the heat of the day,,,,how do they do it,,,,,,

It's quite tragic that Thailand chased the title "largest rice exporter" at the expense of diversifying into other crops.

[joeaverage]

The committee was seriously in charge of the problem.

job done then.

[rubl]

In 2011/2012 we paid 352 billion of pledged rice, we sold for 59 billion, we still have 156 billion in stock, therefore we have a loss of 136 billion. Most likely we will only improve somehow over 2012/2013, at least in money paid out.

Surely from this detailed accounting farmers will understand the rice pledge price needs lowering?

[Thai at Heart]

In 2011/2012 we paid 352 billion of pledged rice, we sold for 59 billion, we still have 156 billion in stock, therefore we have a loss of 136 billion. Most likely we will only improve somehow over 2012/2013, at least in money paid out.

Surely from this detailed accounting farmers will understand the rice pledge price needs lowering?

Yup, farmers all over the world love it when they are lied to by politicians.

[jonclark]

it gets better by the day here im loving it,,me thinks the farmers may one day open there eyes because,i see any benefit going there way,,its sad because there doing the back braking work,,,,i see them in there fields in the heat of the day,,,,how do they do it,,,,,,

It's quite tragic that Thailand chased the title "largest rice exporter" at the expense of diversifying into other crops.

Not tragic at all.....its tradition. And the Thais are so proud of their traditions and culture...right? So how could it possibly be tragic?

[Thai at Heart]

it gets better by the day here im loving it,,me thinks the farmers may one day open there eyes because,i see any benefit going there way,,its sad because there doing the back braking work,,,,i see them in there fields in the heat of the day,,,,how do they do it,,,,,,

It's quite tragic that Thailand chased the title "largest rice exporter" at the expense of diversifying into other crops.

Not tragic at all.....its tradition. And the Thais are so proud of their traditions and culture...right? So how could it possibly be tragic?

Well when you read the story, it would lead you to believe that all these tricks of corruption have magically come into existence in the last couple of years. Where in the world would you be allowed to drive milled rice from one mill to another to get paid twice, and have EVERYONE keep quiet about it, and NO ONE come forward to report it?

I am sorry, but the entire process has been set up for years to screw the little guy and gouge every satang they can out of the system. It's quite nice that these stories are coming out now that it is taxpayers money on the table, but the reality is, it has been going on forever.

It makes you chuckle, that the Thai's for example got their knickers in a twist about the USA patenting a rice seed that mimics Thai Jasmine rice, and the nationalistic hooha about how special, wonderful, loved and precious Thai rice is. The world can't do without it, and we the Thai's go out of the way to protect it, nurture it, because these farangs, you know, they don't know how to take care of it.

Meanwhile, they have been smuggling it across borders since time immemorial to take advantage of the price differential. In reality, makes you wonder when you bought Thai Hom Mali anywhere in the world in the last 10 years, how much of it was Thai? How much of it was genuinely Hom Mali? Looking at these tricks, they can't possibly know how much rice of which type has actually been grown in the country for the last 10 years.

Edited June 24, 2013 by Thai at Heart

[alant]

A solution? Does anyone want a solution? Everything seems to indicate a solution is not desirable, and it is reasonable to argue not needed with a financial system that does not seem to have to write down non realisable assets. I dont know the details of the 2015 ASEAN trade agreement, but I do wonder what will happen about the rice pledging scheme then. Unless home sales are protected I wonder if cheaper rice will undermine the basis of rice farming here. Having said that I cant help feeling that will be the case for many industries over the next 10 years. Until then I would not expect any solution, I would expect the problem to fade away.

[Neilly]

Appointed Senator Yuthana Thaipakdee said he believed three private companies had reaped as much as Bt15 billion profit in the alleged irregularities involving the sale of packed rice under the Commerce Ministry's low-cost Blue Flag programme.

No wonder so many high end luxury cars were heading up country

[Thait Spot]

I have a question:

does a minimum wage of 300B per day allow for profitable rice production in the global market in 2013 or has Thailand priced itself out of the market?

[Thai at Heart]

I have a question:

does a minimum wage of 300B per day allow for profitable rice production in the global market in 2013 or has Thailand priced itself out of the market?

They don't pay 300 a day for labour in the villages yet.

[OzMick]

If you asked a rice farmer to buy his neighbour's crop for B15,000 and sell it to the government for B12,000 he would laugh at you for asking him to do something so stupid.

The same man will ask the government to buy HIS crop for B15,000, or even B12,000, not caring that they cannot sell it for anywhere near that amount. What gives him that perceived right to a free grab at taxpayer's funds? Is it because he is prepared to turn a blind eye to the government's corruption?

The small percentage of the money lost in the rice scam that actually makes it to farmer's is reduced even further by the inflated rents since the scam was initiated. Are these farmer's so naive that they don't realise whose pockets are being filled, and that the money being thrown away like confetti actually belonged to them as taxpayers and could have been used to improve their lot?

[Always18]

I'm surprised there's so little mention of the moisture content scam that's become so much more popular with the millers since the rice pledging began.

I doubt very much if ANY extra cash has found it's way into the farmers pockets as, allegedly, the local mills all seem to operate fraudulent moisture meters claiming falsely high moisture content for delivered rice and thereby being able to reduce payments and increase their profits even more.................the farmers, of course, are unable to verify or rebut these readings and have to take them on trust.

[Thai at Heart]

I'm surprised there's so little mention of the moisture content scam that's become so much more popular with the millers since the rice pledging began.

I doubt very much if ANY extra cash has found it's way into the farmers pockets as, allegedly, the local mills all seem to operate fraudulent moisture meters claiming falsely high moisture content for delivered rice and thereby being able to reduce payments and increase their profits even more.................the farmers, of course, are unable to verify or rebut these readings and have to take them on trust.

Absolutely. And that one has been going on forever.

[billd766]

This wohle rice scheme is not well thought through. Better than price cuts would be direct help to farmers, i.e. xbaht per rai farmed. The rest will have to follow market rules. Demand will dictate price.

sad to say, if thai rice cant compete with world proces, it is doomed.

Only way out would be to produce excellent quality, that can demand high price.

pledging itself is not a good idea, never mind how much.

Sent from my GT-I9100 using Thaivisa Connect Thailand mobile app

Strangely enough that is what the Democrats were doing when they were in power.

[Chrisswe]

Then Academics what is the solution then

!!!???

[Thai at Heart]

This wohle rice scheme is not well thought through. Better than price cuts would be direct help to farmers, i.e. xbaht per rai farmed. The rest will have to follow market rules. Demand will dictate price.

sad to say, if thai rice cant compete with world proces, it is doomed.

Only way out would be to produce excellent quality, that can demand high price.

pledging itself is not a good idea, never mind how much.

Sent from my GT-I9100 using Thaivisa Connect Thailand mobile app

Strangely enough that is what the Democrats were doing when they were in power.

It would appear that they may as well accept that whatever system they put in place, will have at least 30% corruption, or they just let the market take care of everything, or they completely nationalise everything including fertiliser supplies.

With this mix and match of government and private, whatever system is in place, a huge percentage is fraudulently wished away, and there is little or no guarantee that the farmers get paid. Hell, they haven't even got title deeds for half the land outside the cities yet. How does anyone prove how many rai a farmer really produces?

This isn't unique to Thailand mind. Fraud in the EU at least used to be massive on olives.

[tingtongfarang]

I have a question:

does a minimum wage of 300B per day allow for profitable rice production in the global market in 2013 or has Thailand priced itself out of the market?

They don't pay 300 a day for labour in the villages yet.

or even many parts of bangkok.

[whybother]

Then Academics what is the solution then

!!!???

Reporting the facts would be a good start.

[StefanBBK]

Then Academics what is the solution then

!!!???

 

Reporting the facts would be a good start.

and to become competative again encourage top quality.

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