Farmers see only a part of rice scheme's rewards

[webfact]

SPECIAL REPORT
Farmers see only a part of rice scheme's rewards
Petchanet Pratruangkrai,
Yossarin Boonwiwattanakarn
The Nation


The government's Bt15,000-a-tonne rice price under its pledging programme does not only benefit farmers but also a range of related parties.

BANGKOK: -- According to a Nation survey, at the price, farmers benefit to the tune of up to Bt2,000 a tonne. The rest goes to landlords, fertiliser and pesticide companies, labourers, truck owners, millers and middlemen. All that adds up to a loss of Bt136 billion in the first year of the scheme.

Farmers' limited gain

When the government announced its rice pledging price of Bt15,000 in 2011-12, landlords increased rents from Bt500-Bt800 per rai (Bt3,125-Bt5,000 per hectare) to between Bt1,000 and Bt1,500 per rai.

Farm tractor rentals also increased from an average of Bt200 per rai per time to Bt380. Labour costs increased from Bt100-Bt150 per day to Bt300.

Phuti Srisamutnak, president of the Thai Farmers Support Association, said farmers remained poor, despite the high pledging price. Humidity was the main factor that pressured the price, allowing farmers to earn much less than Bt15,000 per tonne. Usually, they get only Bt12,000 a tonne from millers, claiming the rice is of low quality.

"The cost of production has increased considerably in line with the high pledging price. After the government set the price at Bt15,000, the cost of production [including rentals, pesticide, fertiliser, labour, transport, tractor rentals, and fuel) also went up by Bt3,000 a tonne. The cost of production has been increased from Bt5,000 per tonne per rai to more than Bt8,000," he said.

He called on the government to pay a direct income subsidy to farmers of Bt3,000 a tonne rather than set a high pledging price.

Phuti said farmers were aware that rice exports were sluggish because the price was too high.

Wichian Puanglamjiak, chief of the Thai Agriculturist Association, said that despite an increase in production costs, farmers' net benefit from selling paddy remained around Bt2,000 per tonne.

At 30-per-cent humidity, farmers get Bt12,000. At 28 per cent, they get Bt12,500. The rice that is generally sold to the scheme is in the region of 27-28 per cent, he said.

To him, the government has to do more if it wants to help farmers. In Vietnam, Japan and the US, the governments take into consideration all factors from the upstream to the downstream. The pledging price just takes care of part of the problems.

Thai Farmers Association chairman Prasith Boonchoey sees the pledging scheme as a short-term solution appealing to politicians with little real benefits for farmers. He stressed the value of self-development for farmers in realising holistic solutions such as reducing costs and increasing productivity.

Millers/traders real beneficiaries

Millers and middleman traders have been accused of extracting huge benefits from the pledging project and bargaining with farmers for low purchasing prices.

Yongyut Kuntaweethep, a retired village chief in Pathum Thani, said that rice millers who joined the pledging scheme could receive lump-sum payments for processing rice, fees for transport of about Bt500 per tonne and additional gains of Bt500-Bt550 per tonne from sales of by-products such as rice bran, husk rice, broken milled rice, and straw.

According to The Nation's survey, millers enjoy revenue from the pledging policy averaging Bt1,100 per tonne.

Pramoth Vanichanont, former president of the Thai Rice Millers Association, rebutted that millers have only acted as middlemen and stock keepers. Some millers with high morality will never cheat farmers, but they will gain incomes by participating in the government's pledging project. Still, he acknowledged that some unscrupulous traders might pressure farmers to lower their prices. Circumvention of the programme may be found, but is not a general practice, he insisted.

Exporters suffer

Thai rice exports have dropped dramatically in the past two years due to the high pledging price. Exports declined by 35 per cent from 10.6 million tonnes in 2011 to 6.9 million last year. This year, the Thai Rice Exporters Association projects that rice shipment will further drop to 6 million tonnes. Officially, Thailand exported 3 million tonnes in the first six months.

The country's leading rice ex-porters and medium-sized enterprises share similar views that their incomes and profit have declined greatly during the past two years.

A rice-exporter source said his company now faced some losses because of the high price, but it needed to accept some orders to maintain the business.

"Sometimes, only a few bidders participate in the government's rice sales, which have been opened quietly. Additionally, the median price in the auctions were based on the domestic price, which is not competitive in the global market," said the source.

Chookiat Ophaswongse, honorary president of the Thai Rice Exporters Association, said most rice exporters had suffered, as profit margin is only 1-2 per cent. Volume is the only significant factor to maintain income. However, the export volume has decreased substantially, down by around 40 per cent.

Because of their great number - about 200 registered with the association - the competition among Thai exporters has been intense. The large exporters can turn themselves into brokers, to seek rice from other countries and keep their customers. With a price that is 40 per cent higher than that of the global market, Thai rice cannot compete. The exporters that have not participated in the government rice auctions can continue their business if they have good customer bases or their brands have earned good names in global markets.

-- The Nation 2013-07-15

[NongKhaiKid]

" Middlemen " is a euphemism for so much.

[chooka]

As the sun rises so does a new story of rice and the complete cluster f#@% known as the scheme.

[chooka]

The landlords do very well out of the scheme. My wife owns just over 200 Rai of fields (handed down through the generations) and has never worked a day in them but receives a % of the crop. Money for nothing.

[Tatsujin]

What a well-thought out policy as always with this Govt. . . . all the costs associated with rice farming went up also unsurprisingly, so the net gain for the farmers is actually more like ZERO . . . so who is it that has really benefited (as if we didn't already know)?

[reiltin]

If Thailand were a carnival (no doubt some here think it already is!) Thai farmers would be rubes(marks,easy pickins)The ministry minions would be shils(inside men) and the whole rice scam would be a hanky pank(a game in which the value of the prizes is lower than the cost of playing)Finally the expression "burn off'' is used when the carnival can never return to a town because they've "burned" too many locals,the bearded lady never to be seen again.But Hey the show must go on.......

[Ricardo]

"the median price in the auctions were based on the domestic price, which is not competitive in the global market"

So the Thai consumer, which is everyone in the country except the growers (who eat their own rice), is currently paying over-the-odds for this staple food ?

Yay for Helping the Poor !

[soi41]

"Circumvention of the programme may be found, but it is not general practice"

[OzMick]

Rents doubled - which benefited those owning large areas of rice-farming land. Who do you imagine might be a direct (though undeclared) beneficiary of this scam?

[Thai at Heart]

I don't see how an exporter can make any money whatsoever unless the government is selling them rice at below cost.

[IMA_FARANG]

Many of the points talked about in this article were posted on this forum months ago.

But, of course, we're only Farang and nobody cared to listen to our opinions then or now.

Oh well, so it goes.

At least it's not OUR Tax money being used to buy new luxury cars for high-so corrupt elitist politicians in Thailand.

But some of us Farang actually live here long term.

We hate to see a country we love, and more particularly people we love (0ur families) made hostage to greedy politicians whose only real interest in Thailand is to milk the country for all they can take.

One day, it will come back to them in violence and disruption, and quite possibly our loved ones and their children too, will be the ones who suffer for the greedy and corrupt politicians (all parties, not just one party) who currently run Thailand.

[Tatsujin]

Many of the points talked about in this article were posted on this forum months ago.

But, of course, we're only Farang and nobody cared to listen to our opinions then or now.

Oh well, so it goes.

At least it's not OUR Tax money being used to buy new luxury cars for high-so corrupt elitist politicians in Thailand.

But some of us Farang actually live here long term.

We hate to see a country we love, and more particularly people we love (0ur families) made hostage to greedy politicians whose only real interest in Thailand is to milk the country for all they can take.

One day, it will come back to them in violence and disruption, and quite possibly our loved ones and their children too, will be the ones who suffer for the greedy and corrupt politicians (all parties, not just one party) who currently run Thailand.

Actually it IS my tax money they are stealing/wasting, and I pay a lot more of it than most Thai's do.

[bigbamboo]

I see the Nation's investigative reporting desk is on the ball again.

I wonder how long before they apologise for embarrassing the government this time.

Edited July 15, 2013 by bigbamboo

[Neilly]

Thai Farmers Association chairman Prasith Boonchoey sees the pledging scheme as a short-term solution appealing to politicians with little real benefits for farmers. He stressed the value of self-development for farmers in realising holistic solutions such as reducing costs and increasing productivity.

Any more truths statements like that and Mr Boonchoey might not be chairman for much longer me thinks

[CrisRMenumate]

Many of the points talked about in this article were posted on this forum months ago.

But, of course, we're only Farang and nobody cared to listen to our opinions then or now.

Oh well, so it goes.

At least it's not OUR Tax money being used to buy new luxury cars for high-so corrupt elitist politicians in Thailand.

But some of us Farang actually live here long term.

We hate to see a country we love, and more particularly people we love (0ur families) made hostage to greedy politicians whose only real interest in Thailand is to milk the country for all they can take.

One day, it will come back to them in violence and disruption, and quite possibly our loved ones and their children too, will be the ones who suffer for the greedy and corrupt politicians (all parties, not just one party) who currently run Thailand.

Actually it IS my tax money they are stealing/wasting, and I pay a lot more of it than most Thai's do.

Likewise, - There are only 2.3 million people in the country of 67 million actually paying tax and of those only 60,000 who "officially" earn more than baht 4 million and end up paying the highest tax bracket for earnings above that level. there are more than 60,000 foreigners probably earning that much and more so that means there are almost no high paid Thais in the country paying the correct tax rate... no wonder....

[rubl]

Talking with taxi drivers here in Bangkok I indeed frequently hear that compared with the previous government's scheme income from rice has increased, but not really substancial with related costs having increased as well. Of course that doesn't say anything about the 40% 'missing' from the by now 700 billion pledged and paid by the government from taxpayer's money.

[SOTIRIOS]

...what a scam....

[caughtintheact]

Like all governments everywhere, the results of every policy interferes with market mechanisms, and there are results that can be foreseen, but usually are not, and there are worse impacts that are not foreseen. Unfortunately far too many people only see the words on paper, i.e., "B15,000 baht per tonne.", or, "a higher minimum wage", and think, "Isn't it a wonderful thing that the government is doing for the poor?" However, as time passes and the results of those "wonderful" policies can be measured, the people do not realize that those "helpful" policies are costing everyone more, including those that the policies purported to help. And to compouns trings even more, the people want to re-elect the same policiticna who will still go around claiming that they have "helped the poort". This kind of ignorance on the part of the people uis not just common to Thailand.

[belg]

when middlemen

who do less to nothing

are earning x amount times more than the farmer

who does all the work

time to find another occupation... i hear there is a big shortage of factory workers...

555

[MaxLee]

SPECIAL REPORT

Farmers see only a part of rice scheme's rewards

Yes, they do, $$$$$$$MONEY HUGE AMOUNT OF DEBT CREDIT$$$$$

surprised???

[drdoom6996]

What a well-thought out policy as always with this Govt. . . . all the costs associated with rice farming went up also unsurprisingly, so the net gain for the farmers is actually more like ZERO . . . so who is it that has really benefited (as if we didn't already know)?

But they will get new credit cards to accumulate more debt that they can not pay back. And it goes on and on and on.

[SICHONSTEVE]

What a well-thought out policy as always with this Govt. . . . all the costs associated with rice farming went up also unsurprisingly, so the net gain for the farmers is actually more like ZERO . . . so who is it that has really benefited (as if we didn't already know)?

Oh dear, I just don't understand it, after all it's Thaksin's baby so how on earth can things have gone so badly wrong?

Still, it is clearly much better than Abhisit's suggestion of giving money directly to the farmers, isn't it, as he is a Democrat so what would he know or care about poor people. Funny how the 'Thai Rice Traders leader (or whatever his title is) endorses this idea.

The only problem with this is that it makes corrupt practices so much harder to indulge in by politicians and all of those down the line, excepting the farmers of course and for whom it is supposed to benefit!!!

Its a funny old country we live in.

[GAZZPA]

Many of the points talked about in this article were posted on this forum months ago.

But, of course, we're only Farang and nobody cared to listen to our opinions then or now.

Oh well, so it goes.

At least it's not OUR Tax money being used to buy new luxury cars for high-so corrupt elitist politicians in Thailand.

But some of us Farang actually live here long term.

We hate to see a country we love, and more particularly people we love (0ur families) made hostage to greedy politicians whose only real interest in Thailand is to milk the country for all they can take.

One day, it will come back to them in violence and disruption, and quite possibly our loved ones and their children too, will be the ones who suffer for the greedy and corrupt politicians (all parties, not just one party) who currently run Thailand.

If you pay taxes in Thailand, local or ex pat then it is your tax money. The national debts get paid with income tax, if the government borrow (on behalf of the country / people) then it's the people who have to pay it back. Thailand already has a budget deficit, when this finally does come home to roost the tax payer will be accountable, sad but true.

[OzMick]

My dog is almost pathetically grateful for the bones I throw him from my meals. It's a shame that Thai rice farmers can't show equal gratitude........well actually, they do, even though my dog seems to be getting more of the "meat". And he doesn't contribute to the purchase price. It's a funny place, this Thailand.

[tingtongteesood]

In the Thai mindset, Joe Bloggs is getting more money and so why the hell shouldn't I ?! When the 300 baht daily minimum wage was introduced, prices of some things in some places went up for no real reason, just they feel entitled to charge more as people have more money. We recently had in the news university lecturers who already get 55,000 or more per month complaining they should get more since the minimum had risen to 15,000 for new graduates. Bunch of greedy money grubbing b$@*&$%s. It is human nature to a certain extent, but Thais always seem to try and push their luck just too far...

[caughtintheact]

When the 300 baht daily minimum wage was introduced, prices of some things in some places went up for no real reason,

Prices went up for a reason...because businesses had higher costs to operate as a result of the minimum wage increase. Those costs get passed to consumers, because the increase in the minimum wage was artificially induced by government, not because of a rise in demand for labor or an increase in the demand for the product. . . Minimum wage increases have many and real impacts. They present an entry barrier to those seeking work, and many of those are young and poor and people with no experience that will not get jobs because the government raised the minimum wage and now companies will not hire. The increase benefited only those who were already getting the minimum wage and because of increased costs and prices the increase over the longer term is just inflationary and not beneficial to anyone. It just sounds good.

[NeverSure]

As the sun rises so does a new story of rice and the complete cluster f#@% known as the scheme.

Yes. We much watch the news every day to see what the three new conflicting stories are on the rice scam.