Next Thai rice subsidy purchase expected at Bt15,000/tonne

[webfact]

Next rice subsidy purchase expected at Bt15,000/tonne
By English News



BANGKOK, Aug 8 – The government is expected to buy rice from the 2013/2014 harvest season under the rice pledging scheme at Bt15,000 per tonne with a maximum purchase of Bt400,000 from each farming household, a farmer leader said.

Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the government’s limited budget.

He said farmers have discussed with the Commerce Ministry and agreed with the purchase which will be made under more stringent measures to prevent corruption.

The Commerce Ministry will have to raise the issue with the National Rice Policy Committee for approval, he said, adding that the government should be able to start the new purchase on October 1 as the harvest season ends in late September.

At least 15 million tonnes of paddy, or seven million tonnes of rice after milling, should go under the pledging scheme in the new season, he said. (MCOT online new)


-- TNA 2013-08-08

[Bluespunk]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

Edited August 8, 2013 by Bluespunk

[pedro01]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

[zydeco]

Maybe the Democrats should plan a march on the grain silos.

[dru2]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

The initial premise was quite wrong. It wasn't conceived as a EU or US style subsidy aimed at helping farmers. Thaksin actually envisaged hoarding rice, forcing up world prices and then profiteering when there was a human disaster somewhere in the world at which point 'Thailand' (in fact Thaksin) could make billions by exploiting the misery of others. Only a real scumbag could think (and talk) in such terms.

Farming subsidies, rationally applied and paid directly to farmers - yes. But this was always just a revolting scam by a manipulative criminal that fortunately failed to work.

[OzMick]

15 million tonnes at B15,000 per tonne is B225 billion, plus storage costs for rice that is unsellable at anywhere near that price. PTP must be in training for the gold medal in Economic Stupidity.

[moe666]

I loved the article in the BP a few days ago that it is rich farmers that are benefiting from this program and that the people who deserve the help are not allowed to participate

[Bluespunk]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

The problem is that they are buying rice at 40% or more above market rates and then trying to sell it at that rate. The result has been the collapse of the rice industry as the market leader. Subsidising farmers but not trying to get that money by increasing the price of the rice might have maintained Thailand's market position, but that would have required a well thought through policy, Something PT seem incapable of. Subsidies are complex creatures and tend to end up biting you on the derrière unless you're careful.

[OzMick]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

Can you think of ANY country that allocates 10% of government spending to subsidise one agricultural product, and does so in a many that guarantees loss of quality? And what happens to the rice industry, and associated industries, when the whole system inevitably collapses and farmers are left with low prices, full storages and a glut?

[Bluespunk]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

Can you think of ANY country that allocates 10% of government spending to subsidise one agricultural product, and does so in a many that guarantees loss of quality? And what happens to the rice industry, and associated industries, when the whole system inevitably collapses and farmers are left with low prices, full storages and a glut?

Only one, but I'm guessing that Thailand doesn't count as an answer.

[zydeco]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

Well, a major difference is that in the US they pay farmers NOT to plant crops, so that gluts don't occur and land is not overworked.

[pedro01]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

Can you think of ANY country that allocates 10% of government spending to subsidise one agricultural product, and does so in a many that guarantees loss of quality? And what happens to the rice industry, and associated industries, when the whole system inevitably collapses and farmers are left with low prices, full storages and a glut?

No - but what has that got to do with my comment?

Like I said - farming subsidies are normal. The approach PTP took was not.

[NongKhaiKid]

With all that's happening on he political front there was no way the subsidy would be cut as PTP will be looking for all the support it can get rather than protests on several fronts.

[Bluespunk]

With all that's happening on he political front there was no way the subsidy would be cut as PTP will be looking for all the support it can get rather than protests on several fronts.

Exactly.

[jbrain]

15 million tonnes at B15,000 per tonne is B225 billion, plus storage costs for rice that is unsellable at anywhere near that price. PTP must be in training for the gold medal in Economic Stupidity.

I think you got your figures in a twist.

.At least 15 million tonnes of paddy, or seven million tonnes of rice after milling,

[Thai at Heart]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

I disagree - most Western countries subsidise farmers, I don't see why Thailand should be different.

I just think the approach was wrong because the way they went about making the subsidy ensured the farmers hardly saw any of it.

That would depend precisely how you go about subsidising them. A subsisy without a quota will cause a glut. And what do they have? A glut. You can't force the price of a commodity up, if you don't shorten the supply.

[harrry]

It is a system which while needed by the farmers is more suited to the middlemen and higher. It replaced some "subsidies that went more directly to benifit small farmers who really need it to survive. The scheme seems to be a get rich scheme..but not for the farmers.

[Ricardo]

So what allowance will PM-Yingluck, friend of the poor & benefactor of hiso consumer-goods companies, be adding to the price promised in May-2011, to compensate the farmers for inflation since then ?

[OzMick]

15 million tonnes at B15,000 per tonne is B225 billion, plus storage costs for rice that is unsellable at anywhere near that price. PTP must be in training for the gold medal in Economic Stupidity.

I think you got your figures in a twist.

.At least 15 million tonnes of paddy, or seven million tonnes of rice after milling,

As I understand it, the farmers are being paid B15,000 for paddy, less the normal rip-offs for moisture content, etc.

[monkeycountry]

A few months ago the government wanted to lower the price to 12k/ton. The farmers through the farmer associationcomplained, and said the price could be lowered to 13.5k/ton for the next crop, but not the current one. The government did as the farmers requested. Now it comes time to discuss the next crop, which the farmers have already agreed can be lowered, but no, the government still keeps the price at 15k/ton.

In related news:

"According to a recent study by the Thailand Development Research Institute, the rice-pledging programme will increase public debt by an average of 4 per cent per annum.
Research undertaken by MR Pridiyathorn Devakula found that without the rice-pledging scheme, total public debt is expected to increase from Bt4.9 trillion at the end of September 2012 to Bt8.6 trillion in September 2019.

However, with the losses accrued from the scheme, public debt is expected to surge to about Bt10.3 trillion by September 2019."

Unfortunately the poor voters will not understand what any of this means, until Thailand becomes Greece

[GarryP]

Unfortunately, in the long run it is the very people that this scheme is purported to be helping that will get shafted. No market for their produce, no one interested in buying it, and in many cases a mindset that holds them back from planting alternative crops to make ends meets. The lucky ones may now be able to place a deposit on a new pickup but three years down the road when the government has stopped buying their rice, will they be able to keep up with their installments.

[slapout]

Since the cock and bull stories about government to government deals was exposed as false, the statement that rice storage was secure, clean and accountable, proved false, government statement as to amount of rice/paddy in storage proved false, governments accounting of total cost proved false, then add a dog and poney show photo session of leaders eating rice to verify no contamination proved false. I think the Thai public can safefly say the people who proposed, run, monitored, funded dispersed funds and inspected this program are habitual liars. They will ignore critics and contine to stuff their bank accounts as fast as additional funds arer found/alloted.

Other than those faults, the program is doing exactly what it was set up to do.

[ramrod711]

I think it was Will Rogers that said; "if you find your self in a hole, stop digging". PTP would do well to heed that advice.

[ratcatcher]

"Prasith Boonchuey, president of the Thai Farmers Association, said the rice purchase would be made for only one crop given the governments limited budget."

One crop, two crops whatever. This purchase is only going to further cripple Thailand's rice industry and push the country into bankruptcy. While the farmers want to be paid a price they feel their effort deserves (fair enough, it's a tough job) the fact is you cannot pay more for a product than you can sell it for.

Exactly!

The government isn't 'buying' the rice, they are buying the farmers.

[bigbamboo]

A few months ago the government wanted to lower the price to 12k/ton. The farmers through the farmer associationcomplained, and said the price could be lowered to 13.5k/ton for the next crop, but not the current one. The government did as the farmers requested. Now it comes time to discuss the next crop, which the farmers have already agreed can be lowered, but no, the government still keeps the price at 15k/ton.

In related news:

"According to a recent study by the Thailand Development Research Institute, the rice-pledging programme will increase public debt by an average of 4 per cent per annum.

Research undertaken by MR Pridiyathorn Devakula found that without the rice-pledging scheme, total public debt is expected to increase from Bt4.9 trillion at the end of September 2012 to Bt8.6 trillion in September 2019.

However, with the losses accrued from the scheme, public debt is expected to surge to about Bt10.3 trillion by September 2019."

Unfortunately the poor voters will not understand what any of this means, until Thailand becomes Greece

And finally, get your money on an early election.

[jbrain]

15 million tonnes at B15,000 per tonne is B225 billion, plus storage costs for rice that is unsellable at anywhere near that price. PTP must be in training for the gold medal in Economic Stupidity.

I think you got your figures in a twist.

.At least 15 million tonnes of paddy, or seven million tonnes of rice after milling,

As I understand it, the farmers are being paid B15,000 for paddy, less the normal rip-offs for moisture content, etc.

That would be generous as it would mean that Thai rice costs 30.000 Bht per tonne purchase price.

[rubl]

Any update on the immensly profitable 2011/2012 and 2012/2013 price pledging schemes? How much of the 700 billion Baht spent can be safely written off as 'loss' ?

[OzMick]

15 million tonnes at B15,000 per tonne is B225 billion, plus storage costs for rice that is unsellable at anywhere near that price. PTP must be in training for the gold medal in Economic Stupidity.

I think you got your figures in a twist.

.At least 15 million tonnes of paddy, or seven million tonnes of rice after milling,

As I understand it, the farmers are being paid B15,000 for paddy, less the normal rip-offs for moisture content, etc.

That would be generous as it would mean that Thai rice costs 30.000 Bht per tonne purchase price.

Well, yes, with the proviso that normally milling losses are not in excess of 50%. But who ever said this was an economically sound decision? There have been numerous posts over time indicating that the price approaches B15,000 for paddy.

When you are buying votes with other people's money, who gives a rat's about the price until there is a final accounting.

Edited August 8, 2013 by OzMick