Rice losses at '200 billion Baht a year'

[webfact]

Rice losses at 'Bt200 bn a year'
The Nation


Yupa

Ministry completes audit; state banks enlisted to ease millers' liquidity

BANGKOK: -- The Finance Ministry yesterday put the annual losses from the government's controversial rice-pledging scheme in the vicinity of Bt200 billion after wrapping up its audit.

Supa Piyajitti, deputy permanent secretary and chairwoman of the audit team, did not disclose the exact figure from the audit report signed by her former boss Areepong Bhoocha-oom. Areepong was transferred from permanent secretary of the ministry to the post of secretary-general of the Public Sector Development Commission, reportedly for his inability to control Finance Ministry officials who repeatedly expressed concerns over the scheme's impact on the national fiscal position.

Former deputy prime minister Pridiyathorn Devakula has estimated a loss of at least Bt425 billion in the first two years of the scheme, which kicked off in 2011.

The audit report will be reviewed by the National Rice Committee before it is passed on to the Cabinet for acknowledgement.

"The report's scope does not cover observations on possible irregularities, but it insists that the account-closing committee include representatives from agencies like the Public Debt Management Office and State Enterprise Policy Office to prevent any impacts on the country's monetary and fiscal stances," Areepong said.

When he bade farewell to the ministry yesterday, he told all officials there to adhere to their tasks in nurturing the national fiscal position.

The ministry is the key agency that has to deal with the world, he said.

The pledging scheme is now in its third year. The Finance Ministry is being pressed to find fresh funds for the scheme, which has exhausted nearly Bt700 billion. Some state-owned banks are also being asked to help out.
Manoonrat Lertkomolsuk, president of the Small and Medium Enterprise Develop-ment Bank of Thailand, said Thai Credit Guarantee Corporation (TCG) was asked to guarantee the borrowings of rice mills with insufficient collateral.

This would augment their working capital to purchase rice from the scheme.

The bank's factoring product has been offered to rice mills and surveyors to improve their liquidity. About Bt400 million has been loaned to rice mills on expectation of Bt600 million more to be lent to them by the end of this month and Bt5 billion in total by the end of this year.

Vallobh Tejapaibul, general manager of TCG, said the corporation was in discussions with the bank to guarantee millers participating in the rice-pledging scheme for the 2013-14 harvest season in order to improve their liquidity to purchase rice.

TCG still has funds left in Phase 5 of the Bt240-billion Portfolio Guarantee Scheme for such a plan.

Luck Wajananawat, president of the Bank for Agriculture and Agricultural Cooperatives, said the bank was holding talks with TCG to guarantee rice mills with insufficient collateral.

The bank's normal credit line for rice mills is Bt2 billion.

-- The Nation 2013-10-22

[waza]

"The Finance Ministry is being pressed to find fresh funds for the scheme, which has exhausted nearly Bt700 billion.....[from the]..the Bank for Agriculture and Agricultural Cooperatives....[so the]..Thai Credit Guarantee Corporation (TCG) was asked to guarantee the borrowings of rice mills with insufficient collateral....TCG still has funds left in Phase 5 of the Bt240-billion Portfolio Guarantee Scheme for such a plan."

I may be a sceptic but if you read between the lines it sound like a trillion baht has been pumped into this scam so far with little or no foreseeable returns. That's a bit more than 200 billion in losses per year.

Edited October 22, 2013 by waza

[jaidam]

I may be a sceptic but if you read between the lines it sound like a trillion baht has been pumped into this scam so far with little or no foreseeable returns. That's a bit more than 200 billion in losses per year.

It would have been cheaper to buy every registered farmer a brand new Ferrari. Might raise some eyebrows around the evening lao khao bottle when it's put into that kind of perspective.

Edited October 22, 2013 by jaidam

[NongKhaiKid]

" The audit will be reviewed by the National Rice Committee before being passed on to the Cabinet for acknowledgement. "

They may acknowledge receiving the report but that's about all and will need to import BS to cover all that will be needed as they deny the audit findings and I'll bet those denials will still not include any ' official ' figures.

[ezzra]

Probably some hefty chunk of this money was swallowed in corruptions, back door dealings

and every day democracy...

[FarangTalk]

I may be a sceptic but if you read between the lines it sound like a trillion baht has been pumped into this scam so far with little or no foreseeable returns. That's a bit more than 200 billion in losses per year.

It would have been cheaper to buy every registered farmer a brand new Ferrari. Might raise some eyebrows around the evening lao khao bottle when it's put into that kind of perspective.

What use is the Ferrari when all the roads are broken and you can't drive it? And there's no-one that is educated enough to fix it, and the parts are not available due to a breakdown in the supply chain and poor logistics.

We will never know the true losses this scheme has accrued but rest assured the 'right' people have got rich, the rest be damned.

[Katipo]

"Areepong was transferred from permanent secretary of the ministry to the post of secretary-general of the Public Sector Development Commission, reportedly for his inability to control Finance Ministry officials who repeatedly expressed concerns over the scheme's impact on the national fiscal position."

Isn't it funny. I would have thought the greater concern would have been the governments inability to control the spiralling losses. But no, once again, shoot the messengers.

Thailand, where it's worse to say someone is doing something bad than it is to actually do something bad. Because if you don't say it happened, it never did.

[Seri]

Probably some hefty chunk of this money was swallowed in corruptions, back door dealings

and every day democracy...

Take "probably" out of the equation.

Sent from my iPhone using Thaivisa Connect Thailand mobile app

[worgeordie]

So they did an Audit and still could not find out how much

the Country has lost on this fiasco,but they are still going

to continue on the same destructive path,how long would

we last if we ran our households or businesses like the

Government runs the country.

When the Country is dragged to its knees ,no one will be

held responsible and Thais will still not learn that you get

the Government you vote for.

regards Worgeordie

[ratcatcher]

So they did an Audit and still could not find out how much

the Country has lost on this fiasco,but they are still going

to continue on the same destructive path,how long would

we last if we ran our households or businesses like the

Government runs the country.

When the Country is dragged to its knees ,no one will be

held responsible and Thais will still not learn that you get

the Government you vote for.

regards Worgeordie

"..........and Thais will still not learn that you get

the Government you vote for. deserve"

[johnsuma]

If that note is true guess the money is not lost for everyone. Corrupted people are a shame for a country and tarnish the image and put economy at risk. Such people deserve no less than a dead sentence. (in Thailand that will lead to "remove" 50% of the immature population.) 5555

[jaltsc]

I may be a sceptic but if you read between the lines it sound like a trillion baht has been pumped into this scam so far with little or no foreseeable returns. That's a bit more than 200 billion in losses per year.

It would have been cheaper to buy every registered farmer a brand new Ferrari. Might raise some eyebrows around the evening lao khao bottle when it's put into that kind of perspective.

Great idea. After a few bottles of Lao Khao, they would all feel like they are millionaires and drive their Ferraris like a millionaire. Well, at least there would be fewer policemen left asking them for tea money.

[theblether]

It's not a loss, it's a political investment to bribe the core electorate.

[Pib]

200 billion baht loss in one year....there may be a simple solution. Now I'm not quite sure about my math since there are so many zeros involved but Thailand says it has around 20 million tourists per year...so, if they charge each tourist a 10,000 baht entry fee...call it a Keep the PTP in Power Fee... I think that works out to covering the 200 billion baht loss per year.

The govt probably should also consider combining this new fee of 10,000 baht with the new 500 baht quality tourist fee....I think a Thailand entry fee of 10,500 baht is quite fair because Thailand is such a unique country (its own little universe).

[GeorgeO]

"The Finance Ministry is being pressed to find fresh funds for the scheme, which has exhausted nearly Bt700 billion.....[from the]..the Bank for Agriculture and Agricultural Cooperatives....[so the]..Thai Credit Guarantee Corporation (TCG) was asked to guarantee the borrowings of rice mills with insufficient collateral....TCG still has funds left in Phase 5 of the Bt240-billion Portfolio Guarantee Scheme for such a plan."

I may be a sceptic but if you read between the lines it sound like a trillion baht has been pumped into this scam so far with little or no foreseeable returns. That's a bit more than 200 billion in losses per year.

What they are clearly saying is that of the THB 1 trillion (approx) that has been pumped into this scheme, THB 400 billion has been lost, but that the scheme will nevertheless be allowed to continue.

Obviously, I can't speak for the government, but if I had invested a trillion baht in something and found that it had lost 40% of its value, I reckon I would ditch it...

This is a very quiet way for the Minister to actually admit that the reports recently released by senior academics and former institute heads are, in fact, spot on...!

The horse died a long time ago, isn't it about time to stop flogging it...?!

[smedly]

anyone that thinks the 2 trillion loan being discussed is not a bail out needs a to think harder especially since it is being requested outside of normal governmental budgetary procedures - which means it can be spent on anything they like without any sort of accountability - funny sh-- this

another observation - this government is refusing to allow it's own finance ministry to do it's job or even recognise it's findings - <deleted> is that all about - what a mess

since this government has taken office we have seen price hikes in many things - extreme measures from a government that hides the truth with rampant deception and lies, how can it be allowed to continue

[Bakseeda]

Probably some hefty chunk of this money was swallowed in corruptions, back door dealings

and every day democracy...

I don't think "Probably" is the strongest word for this statement.. and "some hefty chunk" does not quite fit this bill.. It should read.. 99% of this cash which belonged to the Thai public.. was sucked up and dissapeared into total corruptions..!!

[Robby nz]

It would seem that there is more to the state of the Ag bank than reported here.

It was reported yesterday that it will borrow 140 billion baht with the Finance Ministry's guarantee to fund the 270-billion-baht budget set for the government's rice-pledging for the coming season.

So in fact the Ag bank has run out of money to cover paying for rice and has to borrow (did not say from where) in order to be able to keep paying out.

They will of course have to pay interest on this borrowing.

Combine that with the 30 to 40% loss on all the money they have and will be paying out and it doesn't leave the bank in a very great position.

Close to bust could be a better way of putting it.

Incidentally , from what I read elsewhere the losses for the first 2 years were put at 466 billion.

[Spare]

Thai govt loss = poor farmers gain.

Thank you Yingluvk

[Thaddeus]

The bank's factoring product has been offered to rice mills and surveyors to improve their liquidity.

Is it the millers that have a liquidity problem?

While this ridiculous scheme keeps throwing money at them, I don't think so.

[Baerboxer]

Everybody knows this is loss making, riddled with corruption and a nonsense idea purely aimed at securing votes.

PTP have reluctantly accepted that Moody's, the World Bank and other non-Thai organizations won't be fobbed off with the usual bullshit they get away with when telling little white lies to their own people.

So now, after an arduous and thorough audit, they come up with a approx loss figure, which they think is the smallest they can get away with. If the outside world swallows this, then more vague deals will be announced showing the the stocks are being sold off so the losses will be reduced and not that important compared to the social benefits.

Same old stories and drivel from the PTP bool of excuses and little white lies.

[AleG]

From figures I've seen they have spent 28.000+ for every ton of rice they've bought at 15.000... where did the other 13.000 per every ton go?

Obviously not to the farmers, as the Commerce Minister lies about.

[moe666]

How do you make a million in Thailand bring two.

[siampolee]

Ministry completes audit; state banks enlisted to ease millers' liquidity

Ministry completes audit, state banks forced to contribute further to this scam scheme to ensure politicians cash flow continues unabated.

[waza]

From figures I've seen they have spent 28.000+ for every ton of rice they've bought at 15.000... where did the other 13.000 per every ton go?

Obviously not to the farmers, as the Commerce Minister lies about.

A chunk of it has gone into the London real estate market........

Thais snap up London real estate Buy 200 units worth over 10 billion baht

[Thaddeus]

From figures I've seen they have spent 28.000+ for every ton of rice they've bought at 15.000... where did the other 13.000 per every ton go?

Obviously not to the farmers, as the Commerce Minister lies about.

Storage fees ............ I wonder who stores it all, obviously not the farmers again.

[belg]

demoCRAZY at its best

while countries like singapore & hong kong tries to get rid of corruption, this is really the HUB overhere

[mikemac]

I believe the beloved Shin clan is banking on the fact that the average Issan rice farmer whose paid for vote keeps the rotten thieves in power can not comprehend how vast a billion of anything really is.

[Nickymaster]

Makes me sick if I think about how many people in need could have been helped with this money. Homeless kids, abused woman, sick people who have no money for medicine etc etc.

And yes, also street dogs and cats who are suffering everyday.

I just hope that all these corrupt people and politicians who are stealing money will suffer the same one day.

[Thai at Heart]

It would seem that there is more to the state of the Ag bank than reported here.

It was reported yesterday that it will borrow 140 billion baht with the Finance Ministry's guarantee to fund the 270-billion-baht budget set for the government's rice-pledging for the coming season.

So in fact the Ag bank has run out of money to cover paying for rice and has to borrow (did not say from where) in order to be able to keep paying out.

They will of course have to pay interest on this borrowing.

Combine that with the 30 to 40% loss on all the money they have and will be paying out and it doesn't leave the bank in a very great position.

Close to bust could be a better way of putting it.

Incidentally , from what I read elsewhere the losses for the first 2 years were put at 466 billion.

Didn't they report only a few months ago that the bank had more than enough funds?

Why do these people lie so easily?