Rice back at Bt15,000

[webfact]

RICE-PLEDGING
Rice back at Bt15,000
Nakarin Srilert,
Petchanet Pratruangkrai,
Yupin Pongthong
The Nation



BANGKOK: -- The Yingluck government has given in to pressure from farmers by maintained the Bt15,000 per tonne pledging price for the second rice crop in the 2012/13 harvest year. But it has left the price for the next harvest year open for a cut.

After the National Rice Policy Committee meeting yesterday, Deputy Premier and Finance Minister Kittiratt Na-Ranong said the decision was based on the finance available, as well as the well-supported stockpile release plan by new Commerce Minister Niwatthamrong Boonsongpaisal.

But the price for next year would be reset, taking the global market and forex rate moves into consideration. The price would be announced some time ahead of the next harvest year, so farmers can make a decision if they want to grow more rice or switch to other crops that could generate more cash.

"This is in line with the government's agricultural zoning scheme, to promote other economic crops like sugar cane," he said, adding that Thailand still needs an additional 30 million tonnes to satisfy demand from the sugar and biofuel industries.

In the latest harvest year, Thai sugar cane output hit a new record high - over 100 million tonnes. Other possible crops are rubber and palm oil. Under the zoning scheme, lists of crops suitable for each area will be announced as a guideline to farmers.

Thai Agriculturist Association chief Wichian Puanglamjiak said farmers should be consulted before the government possibly reduces the minimum price. And the government should also help farmers by reducing prices of fertiliser, seed, insecticide via subsidies or reduction in tariffs, along with government loans with lower interest.

The government has been under huge pressure over the past week from farmers to maintain the Bt15,000 price for 100 per cent paddy rice, at least until the end of the 2012/2013 harvest year. Earlier, the rice committee resolved to revise the second-crop price to Bt12,000 per tonne, to limit losses.

Stockpile releases to 'create room'

Kittiratt said yesterday there was a room to accommodate the change based on Agriculture Ministry data that the second-crop output is only 2.9 million tonnes. Plus, based on a talk between Niwatthamrong, his deputy Yanyong Phuangrach, plus Foreign Trade and Rice Department officials and exporters, stockpile releases should improve in the second half of this year and the proceeds would support the current price without hurting fiscal discipline. Even with the old price, the cost of the pledging scheme, which involves some 22 million tonnes of rice, would be within the Bt345 billion target for the harvest year.

"We're in the condition that we can still take care of farmers while concurrently upholding fiscal discipline," he said.

Taking the new job yesterday, Yanyong unveiled a plan to release more than four million tonnes of rice from July-September so the government can cut its spending on rice stocks and get money to send to the Finance Ministry. The release price should be more flexible - in line with the market or about US$500 a tonne of white rice. They would allocate big lots to major consuming countries such as Indonesia and the Philippines, but may not strike government-to-government deals with buyers. They could allow private exporters to handle the stocks, as they were more efficient. Stocks from pledging amount to 17 million tonnes.

Yanyong and Niwatthamrong also vowed to reduce corruption, and boost transparency and flexibility in rice selling to rebuild the ministry and country's image.

Niwatthumrong said: "Handling the rice project is one of my priority tasks. The ministry will consider a price that can help farmers, as well as ensure that Thai rice exports can compete and sell in the world market. Rice pledging and releasing should be more transparent. I will look for ways to prevent corruption under the project."

The government is under pressure to release rice and cut associated losses. But doing this now will mean losses. The cost, insurance and freight price of Thai 100-per cent polished rice is now quoted at around $500 per tonne (Bt15,000), above $450 from Vietnam and India. After losing over Bt130 billion in 2011/12, it has vowed to keep the annual loss below Bt100 billion.

But storing rice further may incur problems. Old stocks requiring heavy use of anti-pest chemicals, which has led to negative reports.

Some consumers have complained that old and possibly contaminated rice was sold in supermarkets. Lab tests are underway. And one Thai exporter was named in a US warning that related to 70 countries.


-- The Nation 2013-07-02

[NongKhaiKid]

Politics as usual. Yingluck said the scheme was the bees knees and enriching farmers' lives but 2 days later it had to be " sustainable " so the pledge was being cut to B12,000. The farmers and some MPs got uppity so the issue it went into " consideration ", then came the uproar over the cabinet re-shuffle and the North East got upset.

Nothing can be done about the cabinet for a while but as if by magic the rice pledge will be unchanged for a few months at least.

It portrays a government in total control with foresight and sensible forward planning not one simply reeling from crisis to crisis!

[slapout]

Suspision is always arosed when the justification for an action, covers everything but what the orginal question asked required. More dubous figures on amount in storage facilities, harvest dates, etc.

What they need to do is to trace the total monies paid (to what entity) and for what purpose, Start with price /ton, drying cost, transport cost, milling cost/loss via milling, handling cost, cost of storage of grain, cost of treatment of grain, and finally the amount paid to farmer on each transaction and the by product recovered.

[OzMick]

This has to be a record for the most lies in a single press release.

[StefanBBK]

Dare I say it, but if you cant grow rice profitably, don't do it. Ok, this is simplifying the matter too much, but I am tired of this topic, as the government does not understand market forces.

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

[LuckyLew]

when your core base of voters get mad ...

Give them money and they will be happy

[jaidam]

If the Thai rice exporters chairman is to be believed and the scheme has already cost up to 700 billion, it is conceivable that by the end of this year it will have cost 1000 billion aka 1 trillion baht. Quite a considerable sum.

I would like to stop paying income and company taxes to protest the sheer wastage of taxpayers money, but wouldn't be able to renew visa if I did that. Shame.

[OzMick]

Posted Yesterday, 11:53

I know, let's put the price of rice back up!

[meatboy]

Suspision is always arosed when the justification for an action, covers everything but what the orginal question asked required. More dubous figures on amount in storage facilities, harvest dates, etc.

What they need to do is to trace the total monies paid (to what entity) and for what purpose, Start with price /ton, drying cost, transport cost, milling cost/loss via milling, handling cost, cost of storage of grain, cost of treatment of grain, and finally the amount paid to farmer on each transaction and the by product recovered.

youve hit the nail right smack on the head,back to 15,000bht that will raise the value of what stock is left.next anouncement nothing missing.

[Thai at Heart]

This won't go on much longer.

[kimamey]

This has to be a record for the most lies in a single press release.

For now.

[pedro01]

[Mosha]

Cambodia, India etc etc breathe a sight of relief

[Ricardo]

This is the correct decision, it would have been grossly-unfair to the farmers to have cut the price by 20%, mid-way through the current-crop.

And the PTP MPs and Red-Shirt leaders were getting understandably-furious feedback, from their heartlands, thus it makes political sense too.

So cue more permissions to BAAC, to go and borrow ever more, to finance the government's unaffordable spending, don't bother to pay the bank the vast sums now outstanding, carry on with purchasing tablet-computers from China and try to slide through the dams & waterworks, can't let the essential-supply of brown-envelopes falter, it's only public money after all.

And the curious apparent-need to boost the economy in the second-half of this year, despite the massive infusion of cash already achieved, well that will make a fine excuse to go and borrow 2.2 trillion over 50-years for the infrastructure-dream, what could possibly go wrong with that ?

Double ear-medicine all round !

Edited July 2, 2013 by Ricardo

[GentlemanJim]

This won't go on much longer.

I think the term is maybe 'This Can't go on much longer' !

I wonder if the BAAC will now withdraw it's freebie handout of 60 Billion Baht it was going to give farmers in leu of the price drop in rice?

So the scene is set. Just at the hint of protests from farmers the Government caved in. Now as soon as anyone in the NE wants anything they will start threatening protests.

How does selling any rice from previous crops cover the price hike back up to 15K for this crop??? That just means that 3000 baht per ton is immediately lost from the previous crop and that does not include the fact it will be sold at a loss anyway.

[Thai at Heart]

This won't go on much longer.

I think the term is maybe 'This Can't go on much longer' !

I wonder if the BAAC will now withdraw it's freebie handout of 60 Billion Baht it was going to give farmers in leu of the price drop in rice?

So the scene is set. Just at the hint of protests from farmers the Government caved in. Now as soon as anyone in the NE wants anything they will start threatening protests.

How does selling any rice from previous crops cover the price hike back up to 15K for this crop??? That just means that 3000 baht per ton is immediately lost from the previous crop and that does not include the fact it will be sold at a loss anyway.

At this rate there will be a run on the bank.

Would you keep any money in there?

[AleG]

Taking the new job yesterday, Yanyong unveiled a plan to release more than four million tonnes of rice from July-September so the government can cut its spending on rice stocks and get money to send to the Finance Ministry. The release price should be more flexible - in line with the market or about US$500 a tonne of white rice.

Their plan is to dump the rice in the market at a lower price than what they paid for it... Hmmm, what could possible go wrong with that?

[Tatsujin]

"We're in the condition that we can still take care of farmers while concurrently upholding fiscal discipline," he said.

And they still believe this . . . incredible

[worgeordie]

One thing Thailand is the hub for , U-turns on the roads and

in politics,

regards Worgeordie

[tominbkk]

Dare I say it, but if you cant grow rice profitably, don't do it. Ok, this is simplifying the matter too much, but I am tired of this topic, as the government does not understand market forces.

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

I've seen examples of farmers using their land creatively, growing unique crops in part of the land and having a garden to grow food year round for their family. But the lure of the quick buck, low interest loans, etc. won;t be available if they don't buy into the program. Now the farmers are stuck from the the government's get rich quick program and can't get out.

[tominbkk]

If the Thai rice exporters chairman is to be believed and the scheme has already cost up to 700 billion, it is conceivable that by the end of this year it will have cost 1000 billion aka 1 trillion baht. Quite a considerable sum.

I would like to stop paying income and company taxes to protest the sheer wastage of taxpayers money, but wouldn't be able to renew visa if I did that. Shame.

I feel the same way. I probably pay more in taxes than 95% of the thai people, and that is fine. Just wish that @$@# tax money was spent wiser.

[tominbkk]

Taking the new job yesterday, Yanyong unveiled a plan to release more than four million tonnes of rice from July-September so the government can cut its spending on rice stocks and get money to send to the Finance Ministry. The release price should be more flexible - in line with the market or about US$500 a tonne of white rice.

Their plan is to dump the rice in the market at a lower price than what they paid for it... Hmmm, what could possible go wrong with that?

Is that the poisoned rice that was rejected by the US?

[whybother]

Once again ... Lost for words.

[jonclark]

Mark these words - Rice will never go below 15'000 Baht. Now the government has buckled, the farmers have learned that they hold the keys to office and all they need to do is the same again, in a similar situation and the government will be forced into relenting or risk alienating their entire support base.

[mrtoad]

PTP owe the red shirts, and the vote base will dictate part policy even if it isn't or the benefit of the country. Bit like the trade unions in the UK 40 years ago.

[jonclark]

PTP owe the red shirts, and the vote base will dictate part policy even if it isn't or the benefit of the country. Bit like the trade unions in the UK 40 years ago.

That is exactly the situation we have here. Maybe we'll get a Thai Maggie Thatcher in a few years to complete the picture.

[stoli]

Those must have been the "code words" when the government told the farmers that they did not need to come to Bangkok to protest. Help is on the way, and we are going back to 15,000.

[Nickymaster]

meanwhile... Yingluck is packing her bags to go on another overseas trip.

She has just put some new staff on the sinking ship in order for the captain to run and hide for a few days until the whole thing cools of. But it won't... This has to come to an end.

[ChrisY1]

Ahhhhhhh.......this will be good news for many......now they can reinstate their Beemer and Benz orders!!!!!!

Probably get a few for the rels as well......

[bigbamboo]

I do hope this is not an example of the strong leadership we can expect now that the PM is also in charge of the military.