Rice scheme demonstrates populism's dark side: Thai opinion

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Rice scheme demonstrates populism's dark side
Tulsathit Taptim



BANGKOK: -- Anyone can spend himself into trouble. It's one kind of trouble if it's your own money, but it's another if it's the taxpayers'. And it's bigger trouble still if all logic cries out for you to stop throwing tax cash all over the place, but you have to weigh that against the wants of the people who voted you into political office.

The government is being squeezed, trapped between its own ambitious election promise and its stubbornness to see it through. Just about every single person outside the ruling party's circle warned that buying a virtually unlimited amount of rice from farmers at Bt15,000 a tonne was a surefire way to commit budgetary suicide, but the government paid no attention. When something was purportedly being done for the poor, critics couldn't do much except pray.

Even pro-government economists foresaw a disaster. They couldn't look too scared, however, because not only was the prime minister nonchalant, but her big brother was firing on all cylinders in defence of the scheme. Thaksin Shinawatra told the world last September that the rice programme was so noble and economically beneficial that it should go on for several more years. The rest is history.

According to Thaksin, the rice scheme was providing economic gains three times its cost. No matter where his statistics came from, they have been overshadowed by the opposition's more direct numbers. Money spent on buying overpriced rice from farmers, and processing and storing the produce, has dwarfed the income the programme has generated or will ever generate. Corruption is rampant. Huge amounts of rice have either disappeared or been left to rot, and Thailand has slipped behind Vietnam and India as the world's biggest rice exporters.

To realise how desperate and clueless the government has become, one only had to watch a recent press conference chaired by Deputy Commerce Minister Nuttawut Saikua, a video clip of which has been circulating on the social media with a must-see tag. He was supposed to address key questions about the project, but answered none. "What have you been doing these past few days," a reporter asked him and senior officials - who passed simple questions to one another like they were hot potatoes.

After months of trying to stand its ground, the government caved in a few days ago, cutting the guaranteed price per tonne to Bt12,000, and aid to each farmer's family to Bt500,000. If that sounds reasonable, a vast number of Thai farmers do not think so.

Protests have taken place and are being planned, both by those opposed to the rice scheme and those benefiting or standing to benefit from it. "Courageous!" die-hard government supporters say. "Cowards!" scream farmers who have made financial arrangements with Bt15,000 per tonne in mind. "Told you so," the initial critics of the scheme shrug.

It's one thing to make a political U-turn when a project starts to go wrong, but it's another to backpedal when all previous warnings that went absolutely unheeded are coming to a head. The "courageous" compliment also flies in the face of real legal dangers that the government is facing. The enormous cost of the rice scheme threatens to jeopardise the government's budgetary mandate and complicate investment in other essential plans.

The government apparently feels that it has backtracked enough, while others believe that the rice scheme is only halfway down the slippery slope. The situation, therefore, is very tricky. Opponents think the government's attempts to control the damage are far from sufficient, while affected farmers think the government has done too much. The government's preferred choice is to stay precariously sandwiched, at least for the moment.

This is the problem with populism. Once it's let loose, it can barely be reined in. Populism-oriented governments collapse not just because of financial strain of their own making, but also because of the resentment of those who have been made irreversibly dependent on the state and who can't accept an about-face. Welfare is easy to give, but very difficult to take back.

What should the government do? A lot. For starters, it must accept that "You produce, we buy unconditionally" is a ludicrous economic concept. It's as ridiculous as the tenacious refusal to let banks fail in the United States. Only there, they won't allow the rich to fold, but here the poor are perceived as being the source of political power. Yes, politics is the art of doing the right thing for the wrong reason, and making the wrong reason seem right, but even in politics there are limits to how far you should go.

Unfortunately for the Yingluck administration, while there is a lot it should do, there isn't much in the "can do" department. Losing face is arguably the least of its worries, though. The rice scheme and its failure have become intertwined with the political divide. Politicians give because they want to take, and in this case the prospective takers may have too much at stake to just drop it.


-- The Nation 2013-06-26

[NongKhaiKid]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works when you have the money to do so.

[jaidam]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works when you have the money to do so.

I wonder what the mood is these days in the "red villages" that primarily grow rice. Confused I would imagine.

[Mampara]

This is like getting a salary increase and then having it taken away a few months later.

The problem is that the farmers work with a budget that coincides with the expected earnings for the season, so with the increase of the rice price, budgets were adjusted accordingly and possibly pre-spent, so by taking away the extra income most farmers will be in serious dept.

at best the ruling party should consider "sugaring the pill" by clearing the farmers depts. before implementing the price cut.

[Thai at Heart]

This all stems in overreaching arrogance that the market will bow to the will of one man.

Works with mobiles, not with global commodities.

[jaidam]

This is like getting a salary increase and then having it taken away a few months later.

The problem is that the farmers work with a budget that coincides with the expected earnings for the season, so with the increase of the rice price, budgets were adjusted accordingly and possibly pre-spent, so by taking away the extra income most farmers will be in serious dept.

at best the ruling party should consider "sugaring the pill" by clearing the farmers depts. before implementing the price cut.

Not sure I would liken it to a "salary increase", which implies receiving value for hard work. I would rather liken it to finding a large bag of cash in the back seat of a taxi, keeping it and going to a 5 star restaurant to blow it, only to realize when the bill comes that the money is counterfeit.

[Ricardo]

If only the thinker had thought to put together some sort of agreement, with other major rice-exporting countries, to support his action in some way.

But that would have meant admitting, that he needs others to help-out, a very difficult thing to accept.

Instead they have eagerly leapt into the gap-in-the-market which he created, who can blame them !

Edited June 26, 2013 by Ricardo

[winstonc]

any predictions,until the government collapses,,,,,or will the people just wear it,out of blind loyalty,,

[ratcatcher]

any predictions,until the government collapses,,,,,or will the people just wear it,out of blind loyalty,,

Unfortunately, probably the latter.

[Thai at Heart]

If only the thinker had thought to put together some sort of agreement, with other major rice-exporting countries, to support his action in some way.

But that would have meant admitting, that he needs others to help-out, a very difficult thing to accept.

Instead they have eagerly leapt into the gap-in-the-market which he created, who can blame them !

I think he was willing a crop failure or two around the world. In global production terms, Thailand's exports are small, but everyone has been busy producing bumper crops for 3 years.

I can't help feeling that all the producers saw what Thailand was trying to do, and thought "no way we are going to be beholden to Thailand to name their price".

[GentlemanJim]

This is like getting a salary increase and then having it taken away a few months later.

The problem is that the farmers work with a budget that coincides with the expected earnings for the season, so with the increase of the rice price, budgets were adjusted accordingly and possibly pre-spent, so by taking away the extra income most farmers will be in serious dept.

at best the ruling party should consider "sugaring the pill" by clearing the farmers depts. before implementing the price cut.

oooh! That might be next on the list....watch this space ! Have all those graduates got their 15000 minimum monthly wage yet?

As regards clearing the farmers debt, that is a promise they are waiting to make just before the next election, an action which will end up putting Thailand behind the Democratic Republic of Congo in terms of it's economic prosperity.

Edited June 26, 2013 by GentlemanJim

[moe666]

If only the thinker had thought to put together some sort of agreement, with other major rice-exporting countries, to support his action in some way.

But that would have meant admitting, that he needs others to help-out, a very difficult thing to accept.

Instead they have eagerly leapt into the gap-in-the-market which he created, who can blame them !

They did try to set up an agreement with Burma, Cambodia, Vietnam, and India and a couple of more it is mentioned on another thread here about the same scam. They were turned down

[Bellweather]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works when you have the money to do so.

It's a great discussion point to try and decide at what point even the reddest of reds will start to question and it must come down to money. I'm not saying there will not be a fanatic element but money, or the lack of it, is No. 1 in this country and will stretch loyalty to its limits.

[kurnell]

I think the poo Thai party can see the end coming and are frantically trying to gather as much filthy lucre before it all comes crashing down

[rametindallas]

Farmers, and everyone else, are famous for 'counting their chickens before they hatch'. These farmers have made purchases/investments with the expected dividends of the original program. How much warning did the current government give them that the 'agreement' had changed? Seems like only a couple of weeks. What businessperson can budget when compensation agreements can be changed on a whim with little or no notice? The farmers have a right to be angry. Now, can anyone here give a list of segments Thai society that haven't been betrayed? I start with three: old line Amataya, who own the farmland and rice mills, businesses that got a tax cut, and the Military/Police. It's getting hard to make a dishonest baht in Thailand with the government raking off more than the cream.

[belg]

anyone here upto to start a joint venture of farangs and start building rice warehouses...seems a pretty good business

[Chicken George]

Industrail Revolution is a coming. The small farmer has had his day. But a lot of hardship is going to happen along the way.

[GentlemanJim]

anyone here upto to start a joint venture of farangs and start building rice warehouses...seems a pretty good business

Now if you would have said that 18 months ago..........keeeerrrrrrrrching!!!!

[Thai at Heart]

anyone here upto to start a joint venture of farangs and start building rice warehouses...seems a pretty good business

The horse has bolted on that one. They will never have this much stock again.

Now a company converting nearly new warehouses into something useful might be good.

[bigbamboo]

The Democrats must think it's Christmas, New Year and Songkran all rolled into one. A year ago they looked dead and buried but Thaksin (of all people) has given them a lifeline they could only have dreamed about.

But will they be able to grab it?

[louse1953]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works when you have the money to do so.

It's a great discussion point to try and decide at what point even the reddest of reds will start to question and it must come down to money. I'm not saying there will not be a fanatic element but money, or the lack of it, is No. 1 in this country and will stretch loyalty to its limits.

Money number 1,nothing to do with loyalty.Promises and cash will start flowing pre election.

[indyuk]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works wnyonehen you have the money to do so.

This is very cynical, and is no help to anyone.

[Thai at Heart]

The cracks are ever widening. There are news reports that rice farmers in the central belt have supposedly warned the government if they reduce the B15,000 pledge it will be a case of " see you in court ". It won't be long before this really spreads to " red " Isan as despite almost fanatical support for PTP in some areas it will come down to politics being one thing but money the ONLY thing.

Buying loyalty only works wnyonehen you have the money to do so.

This is very cynical, and is no help to anyone.

You want people to post helpful posts? Helpful to whom? The forum is full of posts telling clearly the risks of this pledging scheme.

Unfortunately no one in government was reading.

[BlackJack]

has anyone checked the pickups and trucks doing border runs with foreign grown rice ???

[Baerboxer]

This all stems in overreaching arrogance that the market will bow to the will of one man.

Works with mobiles, not with global commodities.

Only works when you have a monopoly and can dictate to the market.

[Thai at Heart]

This all stems in overreaching arrogance that the market will bow to the will of one man.

Works with mobiles, not with global commodities.

Only works when you have a monopoly and can dictate to the market.

Well of course. It was a nice idea that Thailand come up with some kind of RPEC to control the supply of rice regionally. Of course, I am sure this involved Thailnad being the centre of the hub, with virtually nothing in it for any of the other countries, so they basically said stick it. As though, Cambodia, Vietnam and India want to co-operate with Thailand to their own disadvantage.

[NeverSure]

There are new tractors, new rice harvesters and new pickups all over Isaan. I passed 4 small farms in a row that all had new rice harvesters parked out in front.

Is it possible that this was all bought on credit, believing that this 15,000 - 20,000 baht per ton would go on forever?

So what is the ripple effect of this to the banks if the scheme is cut back?

[jaidam]

This all stems in overreaching arrogance that the market will bow to the will of one man.

Works with mobiles, not with global commodities.

Only works when you have a monopoly and can dictate to the market.

Well of course. It was a nice idea that Thailand come up with some kind of RPEC to control the supply of rice regionally. Of course, I am sure this involved Thailnad being the centre of the hub, with virtually nothing in it for any of the other countries, so they basically said stick it. As though, Cambodia, Vietnam and India want to co-operate with Thailand to their own disadvantage.

OPEC, or any oligopoly only functions through trust. That being each member must trust the others that the quantity of product being released to market is limited as agreed. I can't imagine that situation occurring between the nations of SE Asia, it would be just too tempting to cheat. Particularly difficult with a perishable product which any surplus ultimately would need to be destroyed.

[Thai at Heart]

This all stems in overreaching arrogance that the market will bow to the will of one man.

Works with mobiles, not with global commodities.

Only works when you have a monopoly and can dictate to the market.

Well of course. It was a nice idea that Thailand come up with some kind of RPEC to control the supply of rice regionally. Of course, I am sure this involved Thailnad being the centre of the hub, with virtually nothing in it for any of the other countries, so they basically said stick it. As though, Cambodia, Vietnam and India want to co-operate with Thailand to their own disadvantage.

OPEC, or any oligopoly only functions through trust. That being each member must trust the others that the quantity of product being released to market is limited as agreed. I can't imagine that situation occurring between the nations of SE Asia, it would be just too tempting to cheat. Particularly difficult with a perishable product which any surplus ultimately would need to be destroyed.

It assumes that you can control how much farmers produce. They can't even manage that in Thailand alosn, how on earth would they manage to get everyone across all of these countries in line. And then, would they ever manage to trust each other.

[hanuman2543]

There will be a lot of rice paddies up for sale cheap in the not too distant future

Edited June 26, 2013 by hanuman2543