The rice mountain: Thai govt sticks to its worst and most costly policy

[Espinete]

I think every government makes wise or wrong decisions. This rice pledging scheme happened to work out negative. Abhisit decided to forcefully deport 4,715 Lao H'mong (most were UNHCR registered refugees) back to Laos between X-mas and New Year 2009. I choose for the rice mistake.

[Thai at Heart]

I agree with the negative perspective of the Shinawatra clan and resent the disastrous impact of the populist rice subsidy. But I also think that the farmers who gave Yingluck the numbers to take over are not ignorant country bumpkins who fell for a 3 card trick.

The history of farmers in Thailand shows they have been exploited and abused (and murdered when they protested) by the social elite of large landowners for many years. The land laws are today designed for the large landowner, not for the hard working small farmers. Naturally these farmers want to vote for someone who opposes the Bangkok based hi-so elites. The elites had many years in which to develop fair agricultural and economic policies. That they did not has come back to bite them on the bum, and unfortunately has led to a situation where a megalomaniac is seen by the farmers as their best hope for the future, even if the rest of us think he is a disaster. If the Democrats want to win government, they could start with proposing some serious land reforms rather than offering their own version of rice subsidies. But as most MPs on both sides are big landowners, I won't hold my breath.

No one has the power or the balls to the right thing.

[Espinete]

Well, the rice plan made some people very very rich. PTP, Yingluck, Thaksin, all in it for themselves and to hell with everyone else and the country. It is how Thaksin has always operated and always will. If T actually gets back here and in power he'll strip the country down so far that Angola will start looking good. Greedy family that uses and abuses their power and privilege at every chance they can get.

There were prime examples tp emulate.

Suharto family in Indonesia

Marcos family in the Phillipines.

Next in the list?

-3- Bush family US (Carlyle Group, Halliburton)

[WitawatWatawit]

Why "costly" in the headline? Why not "ruinous"? Thank you for all the great reaction above and I think it will be read by a lot of people. Except those who really need to - and we all know who they are. For one time in my life I'm beginning to agree with the prophets of doom and gloom. I simply cannot see any way out of this nascent disaster.

KY is just the jelly being used to lubricate the rape of this country. (My apologies).

Wit

[daboyz1]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

[WitawatWatawit]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

No. I would have thought the evidence was obvious

[daboyz1]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

No. I would have thought the evidence was obvious

Yet his party keeps getting elected again and again. Doesn't say much about the voters.

[AleG]

I agree with the negative perspective of the Shinawatra clan and resent the disastrous impact of the populist rice subsidy. But I also think that the farmers who gave Yingluck the numbers to take over are not ignorant country bumpkins who fell for a 3 card trick.

The history of farmers in Thailand shows they have been exploited and abused (and murdered when they protested) by the social elite of large landowners for many years. The land laws are today designed for the large landowner, not for the hard working small farmers. Naturally these farmers want to vote for someone who opposes the Bangkok based hi-so elites. The elites had many years in which to develop fair agricultural and economic policies. That they did not has come back to bite them on the bum, and unfortunately has led to a situation where a megalomaniac is seen by the farmers as their best hope for the future, even if the rest of us think he is a disaster. If the Democrats want to win government, they could start with proposing some serious land reforms rather than offering their own version of rice subsidies. But as most MPs on both sides are big landowners, I won't hold my breath.

During Abhisit's short term land reform was under deliberation, things like limiting the amount of land that could be owned by a family, progressive land tax, and a land bank for poor farmers. All was scraped when PTP came to power.

[MaiChai]

I'm fascinated by the long-term implications of this policy. International buyers are just biding their time, waiting for the grand Thai-rice fire sale. There's no way Thailand will ever regain it's position as the world's top rice exporter. It's reputation for supplying high-quality jasmine rice has already gone if people are suspicious that old or foreign-sourced grain has been mixed in.  

I think the reality is Thai rice is no longer special. It's clear that the best Thai rice can be grown just as well else Where, and even enhanced by improved farming techniques and cross growing with other strains. Thailand has lost It's edge and reputation and never be able to recover it, unless it becomes more competitly priced.

[zydeco]

I'm fascinated by the long-term implications of this policy. International buyers are just biding their time, waiting for the grand Thai-rice fire sale. There's no way Thailand will ever regain it's position as the world's top rice exporter. It's reputation for supplying high-quality jasmine rice has already gone if people are suspicious that old or foreign-sourced grain has been mixed in.

I think the reality is Thai rice is no longer special. It's clear that the best Thai rice can be grown just as well else Where, and even enhanced by improved farming techniques and cross growing with other strains. Thailand has lost It's edge and reputation and never be able to recover it, unless it becomes more competitly priced.

What's the diff? I can tell the difference b/w white, brown, and wild rice. But when it comes to various types of white rice, it all might as well be Uncle Ben's as far as I'm concerned. And I'll bet that's the case for 99 percent of the people outside Asia. As for Asians, I'll bet they all opt for their own homegrown.

[Bodrules]

Well I can tell basmati, Jasmine and risotto rice apart, but for your run of the mill white rice, nope couldn't tell the US or Italian long grain apart (the latter two sources are the main white rice producers for imports into the UK IIRC) or probably any other bog standard white rice for that matter

[NCC1701A]

publicly burn all the stored tainted rice. start over. dumb tax payer people pay for lost rice and watch television and smile all the time. have water festival. vote for unworkable government policies. smart bank people write off debt and make more loans for new pick up trucks. have lunch in Monaco. farmers daughters become hookers to pay for fathers pick up truck. marry farang man and use just like water buffalo. white rice causes type 2 diabetes kills farang man. 36 months economy recovers. build more condos.

[edwinchester]

I think every government makes wise or wrong decisions. This rice pledging scheme happened to work out negative. Abhisit decided to forcefully deport 4,715 Lao H'mong (most were UNHCR registered refugees) back to Laos between X-mas and New Year 2009. I choose for the rice mistake.

Two totally different "mistakes".

The deportation of the refugees was reprehensible and rightly condemned.

The rice scam has cost Thailand hundreds of billions of bht, ruined it reputation for quality rice, has the possibility to near bankrupt the country and most likely will destroy the livelyhood of hundreds of thousands of rice farmers who just happen to be Thai. That PT ignored the advice of just about any sane economist speaks volumes on what their true intentions were and that they care next to nothing about ordinary people.

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

[FarangTalk]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

No. I would have thought the evidence was obvious

Yet his party keeps getting elected again and again. Doesn't say much about the voters.

Or it says more about the farang expat population and their ignorance of Thai history, politics and society.

[FarangTalk]

I agree with the negative perspective of the Shinawatra clan and resent the disastrous impact of the populist rice subsidy. But I also think that the farmers who gave Yingluck the numbers to take over are not ignorant country bumpkins who fell for a 3 card trick.

The history of farmers in Thailand shows they have been exploited and abused (and murdered when they protested) by the social elite of large landowners for many years. The land laws are today designed for the large landowner, not for the hard working small farmers. Naturally these farmers want to vote for someone who opposes the Bangkok based hi-so elites. The elites had many years in which to develop fair agricultural and economic policies. That they did not has come back to bite them on the bum, and unfortunately has led to a situation where a megalomaniac is seen by the farmers as their best hope for the future, even if the rest of us think he is a disaster. If the Democrats want to win government, they could start with proposing some serious land reforms rather than offering their own version of rice subsidies. But as most MPs on both sides are big landowners, I won't hold my breath.

During Abhisit's short term land reform was under deliberation, things like limiting the amount of land that could be owned by a family, progressive land tax, and a land bank for poor farmers. All was scraped when PTP came to power.

With exceptions for certain families of course.

The Democrats have no supporter base in the rural communities because of their policies in the 90's which brought great hardships for a good many farmers. It's a bit late now closing the stable door when the horse bolted 15 years ago.

[daboyz1]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

No. I would have thought the evidence was obvious

Yet his party keeps getting elected again and again. Doesn't say much about the voters.

Or it says more about the farang expat population and their ignorance of Thai history, politics and society.

Farangs can vote? News to me.

As far as I can tell the voters keep electing the same useless people into office over and over since the politicians keep making extravagant promises they can't keep. "All Thais will be rich in 6 months." This rice thing is another one. The credit cards for the taxi drivers.

Then you have the fugitive thinking he's above the law, or for that matter most politicians thinking they are above the law. The constant nepotism. Pretty soon the Thaksin family dog will be an MP. Should I keep going? Because that's just scratching the surface.

[Thai at Heart]

I agree with the negative perspective of the Shinawatra clan and resent the disastrous impact of the populist rice subsidy. But I also think that the farmers who gave Yingluck the numbers to take over are not ignorant country bumpkins who fell for a 3 card trick.

The history of farmers in Thailand shows they have been exploited and abused (and murdered when they protested) by the social elite of large landowners for many years. The land laws are today designed for the large landowner, not for the hard working small farmers. Naturally these farmers want to vote for someone who opposes the Bangkok based hi-so elites. The elites had many years in which to develop fair agricultural and economic policies. That they did not has come back to bite them on the bum, and unfortunately has led to a situation where a megalomaniac is seen by the farmers as their best hope for the future, even if the rest of us think he is a disaster. If the Democrats want to win government, they could start with proposing some serious land reforms rather than offering their own version of rice subsidies. But as most MPs on both sides are big landowners, I won't hold my breath.

During Abhisit's short term land reform was under deliberation, things like limiting the amount of land that could be owned by a family, progressive land tax, and a land bank for poor farmers. All was scraped when PTP came to power.

It crashed and burned before ptp.

No one one any side if the political divide will support land reform here. It is tooooo much money involved.

[stoli]

There is no one in Thailand that makes less income than the farmers, and they work extremely hard for the small amount of money that they earn. No, this is not the US, but the rice scheme is common in the US, known as subsidies for the farmers. If you create a situation where your farmers just give up, you lose your food supply. The farmer, and those wishing to farm, need to be subsidized by the government just as the US as successfully done, with rice, corn, soybeans, wheat, hay, and 1,000 of other crops. The difference is the US does not try to sell the subsidized product above market rates. The subsidy money is paid directly to the farmer, who then sells the product at market prices. The government uses it tax monies to support the program. Just imagine a country where the farmers can no longer afford to farm, and the effect that food shortages would have on that country. The government is attempting to help the farmer succeed, but is using the wrong method. They just need to continue to support the farmer from tax dollars, and continue to sell the rice at world market prices. No storage fees for warehouses. Buy it, mill it, bag it, and sell it. Whatever you do, don't lose your farmers.

[Thai at Heart]

There is no one in Thailand that makes less income than the farmers, and they work extremely hard for the small amount of money that they earn. No, this is not the US, but the rice scheme is common in the US, known as subsidies for the farmers. If you create a situation where your farmers just give up, you lose your food supply. The farmer, and those wishing to farm, need to be subsidized by the government just as the US as successfully done, with rice, corn, soybeans, wheat, hay, and 1,000 of other crops. The difference is the US does not try to sell the subsidized product above market rates. The subsidy money is paid directly to the farmer, who then sells the product at market prices. The government uses it tax monies to support the program. Just imagine a country where the farmers can no longer afford to farm, and the effect that food shortages would have on that country. The government is attempting to help the farmer succeed, but is using the wrong method. They just need to continue to support the farmer from tax dollars, and continue to sell the rice at world market prices. No storage fees for warehouses. Buy it, mill it, bag it, and sell it. Whatever you do, don't lose your farmers.

Natural attrition means they are going to be extinct in 50 years anyway.

[Skywalker69]

Why is it absolutely necessary to have the "exporters" in the middle of this deal? Why can't the government offer FOB pricing and allow foreign companies to bid directly FOB?

What exactly does an exporter bring to this deal? Just another layer of necessary profiLogistics

This government couldn't organise a drink in a brewery, they need someone to do the thinking and organising for them, and they have debts to pay.

they need someone to do the thinking and organising for them

Yingluck?

[GAZZPA]

This is a terrible situation for Thailand to be in, I won't comment on whose fault it is as there are many posts doing that (and I agree with most). I have posted on this before but I have to add that I feel for the poor people of Thailand (my new adopted home). This is going to have be dealt with sooner or later, it cannot just go away. So, I hope the mud slinging can take a back seat whilst a real solution is found to reverse the current trend and map a way out.

I like the post about making wine out of it, the wine can store for many years, longer then rice I am sure. Also, there must be other products manufactured from rice where the rice can be sudsidised to local production under the agreement that the end product is not dumped into the market. The local government will benefit from tax returns and it will boost other manufacturers margins (maybe).

Whatever the solution it has to be quick as I can only imagine what the impact will be like when it comes crashing down, as I said in my opening sentence terrible situation to be in.

It is an interesting idea. Problem is, what would that do to the world supply of rice wine? Send it up 10 times, and put a load of businesses in Japan and China out of business. Hardly an appealing idea when dealing with your largest international trading partners. Despite it's low output, maybe bio-fuel would be a possibility. I mean, it can just be added to existing biofuel dilution in Thailand, or sold overseas as ethanol stock. Not sure if it would be financially viable, but at least you transform it from one unsellable commodity to one that is being consumed. But then, maybe that would adversely effect the sugar prices.

Either way, they have created a gargantuan monster, and no amount of trying to push the can down the road will work. Eventually, so much of it will be spoiled they won't be able to sell any of it for food.

I think you're probably right. But right now with things the way they are they have to do something and create alternative ideas to just selling the rice as it won't happen. Be it wine, bio fuel or whatever, i just hope that they do it soon.

[GAZZPA]

An honest question. Has Thaksin or his proxies ever done anything good for Thailand? There has to be something. Even a blind squirrel finds an acorn now and then.

No. I would have thought the evidence was obvious

Yet his party keeps getting elected again and again. Doesn't say much about the voters.

Or it says more about the farang expat population and their ignorance of Thai history, politics and society.

Does it? can't see how you got that from daboyz1's comments.

[tominbkk]

There is no one in Thailand that makes less income than the farmers, and they work extremely hard for the small amount of money that they earn. No, this is not the US, but the rice scheme is common in the US, known as subsidies for the farmers. If you create a situation where your farmers just give up, you lose your food supply. The farmer, and those wishing to farm, need to be subsidized by the government just as the US as successfully done, with rice, corn, soybeans, wheat, hay, and 1,000 of other crops. The difference is the US does not try to sell the subsidized product above market rates. The subsidy money is paid directly to the farmer, who then sells the product at market prices. The government uses it tax monies to support the program. Just imagine a country where the farmers can no longer afford to farm, and the effect that food shortages would have on that country. The government is attempting to help the farmer succeed, but is using the wrong method. They just need to continue to support the farmer from tax dollars, and continue to sell the rice at world market prices. No storage fees for warehouses. Buy it, mill it, bag it, and sell it. Whatever you do, don't lose your farmers.

Agree with you, it's a pity though that the Thai govt. is not more creative about what they subsidize for the farmer. Rather, they have a carpet bomb policy towards agriculture, with everybody growing as much rice as possible without any consideration towards market value or feasibility.

Then again, this rice scheme was never meant to help out the average farmer, it was to get a few people very rich and to hell with the rest. Like all PTP/Thaksin schemes, the goal is to enrich the Shiniwatra accounts and throw breadcrumbs at the ignorant masses. In that perspective, his rice policy has been extremely effective. By the time the country is on its knees and bankrupt, he will have all of Thailand's money elsewhere.

[Thai at Heart]

There is no one in Thailand that makes less income than the farmers, and they work extremely hard for the small amount of money that they earn. No, this is not the US, but the rice scheme is common in the US, known as subsidies for the farmers. If you create a situation where your farmers just give up, you lose your food supply. The farmer, and those wishing to farm, need to be subsidized by the government just as the US as successfully done, with rice, corn, soybeans, wheat, hay, and 1,000 of other crops. The difference is the US does not try to sell the subsidized product above market rates. The subsidy money is paid directly to the farmer, who then sells the product at market prices. The government uses it tax monies to support the program. Just imagine a country where the farmers can no longer afford to farm, and the effect that food shortages would have on that country. The government is attempting to help the farmer succeed, but is using the wrong method. They just need to continue to support the farmer from tax dollars, and continue to sell the rice at world market prices. No storage fees for warehouses. Buy it, mill it, bag it, and sell it. Whatever you do, don't lose your farmers.

Agree with you, it's a pity though that the Thai govt. is not more creative about what they subsidize for the farmer. Rather, they have a carpet bomb policy towards agriculture, with everybody growing as much rice as possible without any consideration towards market value or feasibility.

Then again, this rice scheme was never meant to help out the average farmer, it was to get a few people very rich and to hell with the rest. Like all PTP/Thaksin schemes, the goal is to enrich the Shiniwatra accounts and throw breadcrumbs at the ignorant masses. In that perspective, his rice policy has been extremely effective. By the time the country is on its knees and bankrupt, he will have all of Thailand's money elsewhere.

The idea is to avoid paying the father directly.

[Espinete]

I think every government makes wise or wrong decisions. This rice pledging scheme happened to work out negative. Abhisit decided to forcefully deport 4,715 Lao H'mong (most were UNHCR registered refugees) back to Laos between X-mas and New Year 2009. I choose for the rice mistake.

Two totally different "mistakes".

The deportation of the refugees was reprehensible and rightly condemned.

The rice scam has cost Thailand hundreds of billions of bht, ruined it reputation for quality rice, has the possibility to near bankrupt the country and most likely will destroy the livelyhood of hundreds of thousands of rice farmers who just happen to be Thai. That PT ignored the advice of just about any sane economist speaks volumes on what their true intentions were and that they care next to nothing about ordinary people.

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

The rice scam is not capable to ruin Thailand's economics by any means. It will be a black mark on it but does not have the potential to make Thailand bankrupt. The variety of other (export)industry rules that out. The reputation; a reputation can be won back again in a relatively short period. As long as the price and quality is balanced (again). As an example; the closure in Dec.2008 of Suvarnabhumi's airport by the Yellow Cattle. Press shouted it would destroy Thailand tourism sector. 2009 was back to normalcy, 2013 is a topper.

[stoli]

I think every government makes wise or wrong decisions. This rice pledging scheme happened to work out negative. Abhisit decided to forcefully deport 4,715 Lao H'mong (most were UNHCR registered refugees) back to Laos between X-mas and New Year 2009. I choose for the rice mistake.

Two totally different "mistakes".

The deportation of the refugees was reprehensible and rightly condemned.

The rice scam has cost Thailand hundreds of billions of bht, ruined it reputation for quality rice, has the possibility to near bankrupt the country and most likely will destroy the livelyhood of hundreds of thousands of rice farmers who just happen to be Thai. That PT ignored the advice of just about any sane economist speaks volumes on what their true intentions were and that they care next to nothing about ordinary people.

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

The rice scam is not capable to ruin Thailand's economics by any means. It will be a black mark on it but does not have the potential to make Thailand bankrupt. The variety of other (export)industry rules that out. The reputation; a reputation can be won back again in a relatively short period. As long as the price and quality is balanced (again). As an example; the closure in Dec.2008 of Suvarnabhumi's airport by the Yellow Cattle. Press shouted it would destroy Thailand tourism sector. 2009 was back to normalcy, 2013 is a topper.

I would have to say that getting tourists back to Thailand is far different than getting back your rice buyers. If people want to see Thailand, there is only one place to go, and that is Thailand. If people want to buy rice, they have far more options. Now that the rice importers have established relations and buying contracts at far more favorable rates, (Vietnam for instance), they are getting what they need, good quality, and at the price they needed to stay competitive. There is no need for them to change once again just because Thailand says they were sorry. It will take a very long time to get those buyers back. Once again, the government can and should subsidize the farmers to keep them farming before they lose them. Then they need to sell their rice at market rates. This is how they should have done it in the first place,

[apetley]

 

I think every government makes wise or wrong decisions. This rice pledging scheme happened to work out negative. Abhisit decided to forcefully deport 4,715 Lao H'mong (most were UNHCR registered refugees) back to Laos between X-mas and New Year 2009. I choose for the rice mistake.

Two totally different "mistakes".

The deportation of the refugees was reprehensible and rightly condemned.

The rice scam has cost Thailand hundreds of billions of bht, ruined it reputation for quality rice, has the possibility to near bankrupt the country and most likely will destroy the livelyhood of hundreds of thousands of rice farmers who just happen to be Thai. That PT ignored the advice of just about any sane economist speaks volumes on what their true intentions were and that they care next to nothing about ordinary people.

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

 

The rice scam is not capable to ruin Thailand's economics by any means. It will be a black mark on it but does not have the potential to make Thailand bankrupt. The variety of other (export)industry rules that out. The reputation; a reputation can be won back again in a relatively short period. As long as the price and quality is balanced (again). As an example; the closure in Dec.2008 of Suvarnabhumi's airport by the Yellow Cattle. Press shouted it would destroy Thailand tourism sector. 2009 was back to normalcy, 2013 is a topper.

Ratings agencies are threatening to downgrade because of the rice scam, Iraq, Thailands single biggest customer has said they will not buy for the next three years according to the big boss and other importers are not ordering. It will be impossible to reduce the price of Thai rice exports because that will effectively bankrupt the BACC who payroll the scheme. The rice in store is an 'asset' valued at above market rates, madness, and to sell it lower than cost, dumping, will be breaking WTO rules.

It will not be easy at all for Thailand to regain it's reputation when there other cheaper exporters. Rice is rice, not a unique tourist destination.

Sent from my GT-I9003 using Thaivisa Connect Thailand mobile app

[khunron13]

All that "face saving" BS sure is expensive!

[OzMick]

With exceptions for certain families of course.

The Democrats have no supporter base in the rural communities because of their policies in the 90's which brought great hardships for a good many farmers. It's a bit late now closing the stable door when the horse bolted 15 years ago.

The Agricultural revolution brought hardship to many farmers, and it's long overdue here.

[dcutman]

Good read here.

What Thai farmer are missing out on and what Thai farmers cant do because this and prior Govts dont think increasing yield and production is important.

U.S. Rice Farmers Cash In On Venezuelan SocialismBy Sara Schaefer Muñoz | The Wall Street Journal – 9 hours ago

• Email
• Print

STUTTGART, Ark.—Steve Orlicek, a rice farmer here, is living the American dream. He owns a thriving business; he vacations in the Bahamas.

His good fortune springs from many roots, including an unlikely one: He is a prime beneficiary of the socialist economic policies of Hugo Chávez, Venezuela's late president and critic of what he called U.S. "imperialism."

Sara Schaefer Muñoz/The Wall Street Journal A rice farm in Venezuela.

It is a paradoxical legacy of Mr. Chávez's self-styled socialist revolution that his policies became a moneymaker for the capitalist systems he deplored. During his 14 years in power, he nationalized large farms, redistributed land and controlled food prices as part of a strategy to help the poor.

http://finance.yahoo.com/news/u-rice-farmers-cash-venezuelan-030600234.html