EC not yet ready to okay Bt130 billion borrowing to pay rice farmers

[webfact]

EC not yet ready to okay Bt130 billion borrowing to pay farmers
Petchanet Pratruangkrai
The Nation

BANGKOK: -- The caretaker government yesterday cleared one barrier blocking it from implementing the next phase of the controversial rice-pledging scheme when the Election Commission allowed the sale of rice from the state's stocks, but it still faces a political backlash if the EC does not remove another hurdle.

The commission said yesterday that it would take around a week to consider a request by the government to borrow Bt130 billion to pay farmers for their crop from the October-February harvest season, as it was "such a huge decision".

Article 181 of the Constitution prohibits certain actions to be made by a caretaker government without prior permission from the EC.

"Each commissioner needs to study the request thoroughly, and individuals might be asked to testify to the EC. If testimonies are needed, the EC would invite individuals to appear, and this option will be considered starting next week," deputy secretary-general Tanith Sriprateth said.

Caretaker Commerce Minister Niwatthumrong Boonsongpaisan said the government's request to continue selling rice through government-to-government deals under a new contract was approved by the EC. The government needs the money to buy the pledged rice from the current harvest season.

Farmers have complained about delayed payments and have threatened to march against the government. The current rice-pledging round started in November and ends next month. Farmers say they have suffered from the month's delay in payment. They called for the government to expedite the payments as they owe money for production costs and need to feed their families.

Niwatthumrong said the Bank for Agriculture and Agricultural Cooperatives (BAAC) should be able to pay the farmers within 15 days.

"The government already has Bt77 billion cash on hand, and should be able to pay farmers about Bt3 billion to Bt4 billion a day," he said.

None of the farmers should be hurt too long by the delayed payments, he said.

About 10 million tonnes of new rice is expected to enter the pledging scheme, which would need about Bt140 billion to pay farmers.

The government has already paid Bt30 billion to the farmers who have pledged rice with the government since November. The remaining Bt77 billion will be soon paid, he said.

The government will need to earn Bt40 billion to pay farmers under the pledging scheme, which is capped at Bt270 billion, so it will urge the EC to allow the government to borrow Bt130 billion to ensure adequate funds to pay farmers.

The EC should approve the loan, since the pledging scheme is a continuing policy, he said. The government will not comment on whether it intends to continue the pledging project after the election as that could breach election rules, he said.

With the EC's consent, the government will continue selling rice from its stockpiles. The Commerce Ministry will urgently negotiate with its trading partners for more rice-purchase deals. China, for one, is interested in procuring 1 million tonnes of rice from Thailand.

Also, the government expects to sell more rice - about 500,000 tonnes - to private traders, he said.

Since the administration of Prime Minister Yingluck Shinawatra took office in 2011, the government has earned about Bt180 billion from rice sales. The Commerce Ministry believes it should be able to earn more money this year as many contracts were signed last year and the rice is awaiting shipment.

However, the ministry has not yet calculated how much the government should earn this year under its rice-sale plan.


-- The Nation 2014-01-09

[jaltsc]

"...Bt130 billion to pay farmers for their crop from the October-February harvest season, as it was "such a huge decision".

Really?. They just figured out that Bt130 billion is a lot of money? Perhaps if they had known this fact, they wouldn't have made promises they could not keep.

"None of the farmers should be hurt too long by the delayed payments, he said."

That is, unless they have loans to pay back to loan sharks.

Amazing Thailand government. Hub of "I ain't got a clue".

Edited January 9, 2014 by jaltsc

[khwaibah]

Just another crock of BS

[Ricardo]

Why doesn't the caretaker-government just transfer the money to BAAC, and get the overdue-bills paid ?

Why does the government have to borrow the money, from anyone, by selling bonds ?

Is the caretaker-government really that broke ?

[noitom]

This is a great example of Thai "catch-22."

[noikrit]

This Rice Scam will be a case study in many universities and Countries around the world at what not to do !! .... What a Joke !!

[Ricardo]

"Niwatthumrong said the Bank for Agriculture and Agricultural Cooperatives (BAAC) should be able to pay the farmers within 15 days."

Weren't the protesting farmers, blocking the road between Phitsanulok and Nakhon Sawan yesterday, "promised by a caretaker minister that they will receive their money on January 15" ?

http://www.thaivisa.com/forum/topic/695046-rice-farmers-disperse-after-payment-promise-but-vow-to-return/

So why does a definite promise of payment in several days' time suddenly become "within 15 days", only 24-hours later ?

Someone in the caretaker government is telling 'porkies', which seems a sure-fire way, to piss-off the poor rice-farmers even more !

[MaxLee]

The Pheu Thai did that on purpose to delegate another scape goat towards the Election committee:

"Dear rice farmers, if you want to blame someone, blame the EC, not us. We've lent them the money, and THEY are the ones who spent your revenue,... (we can't blame the Falang too much anymore and their policies, because they become too smart), good luck and peace"....

Edited January 9, 2014 by MaxLee

[bunnydrops]

This may not have anything to do with this topic but it is an example of how things work. My mother in law saw that the BAAC took 600 baht out of her account last week. She went to the bank to see what it was about. They told her "Yes, we borrowed it" but they had no idea why it was borrowed. I was surprised they could "borrow" without informing the holder first, but I guess it must be in the small print.

[JRSoul]

Math 101

Q/ The bank owes B77 billion to farmers and can pay at 3-4 billion per day. what is the least number of days will it take to pay all the farmers?

A/ 15 days

Result/ Fail. At the maximum rate of repayment, it will take a minimum of 20 days.

[h90]

"...Bt130 billion to pay farmers for their crop from the October-February harvest season, as it was "such a huge decision".

Really?. They just figured out that Bt130 billion is a lot of money? Perhaps if they had known this fact, they wouldn't have made promises they could not keep.

"None of the farmers should be hurt too long by the delayed payments, he said."

That is, unless they have loans to pay back to loan sharks.

Amazing Thailand government. Hub of "I ain't got a clue".

And we can wait for the Red ranting that the poor farmers in Isaan don't get the money because the rich elites in Bangkok want it for themself.

alternative:

"elite"-->"Democrats"

"want it" --> "stolen it"

[wedders]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

[DLock]

Regardless, it will all be paid by the 2nd February.

Yingluck is at home curled up the foetal position crying "...please be a coup, please be a coup, please be a coup...".

[Mosha]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

They paid the farmers directly, no need to wait on any middleman.

[Pib]

It's all just a game of "blame defection, finger pointing, passing the hot potato, etc."

[Mosha]

This may not have anything to do with this topic but it is an example of how things work. My mother in law saw that the BAAC took 600 baht out of her account last week. She went to the bank to see what it was about. They told her "Yes, we borrowed it" but they had no idea why it was borrowed. I was surprised they could "borrow" without informing the holder first, but I guess it must be in the small print.

I think it's got everything to do with the Op. It shows how BAAC will raise the cash.

Unfortunately if Thai banks operste like eg Europe. Once the money is in your bank account, it becomes the banks money. It helps the banks make money in normal times. Lending to other banks, monetary trading etc. Of course those banks have to have more cash held in reserve, than what exists in personal accounts. So one wonders if the same restrictions apply here.

[wedders]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

They paid the farmers directly, no need to wait on any middleman.

Still would have resulted in vast unsaleable stockpiles bought at an inflated price as the world market refused to be manipulated. Prices have dropped, Thailand will have to keep its stocks for a long time before schemes like this see a premium.

Sent from my GT-I9500 using Thaivisa Connect Thailand mobile app

[monkeycountry]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

The democrats had a rice policy when they were in power, one that most people, including the rice farmers, were happy with, and which did not cost the country a fortune.

The fact that you do not know about it suggests that neither side was complaining about the democrat policy, as you would then likely have heard about it in the news.

I do not recall the details, but I am sure you can google them. I am also quite sure the democrats are still in favour of that policy.

So your allegation that it would have been the same circus is wrong, as the democrats policy has already been tried, and evidently there was no circus.

And just to be clear. Many farmers, including their spokesmen, have been asked which rice policy they favour, the PTP or the Democrat? they generally favour the PTP policy, but at the same time they admit that the PTP policy does not bring them that much more money (do not recall the small difference). This begs the question, where are the massive losses from the PTP policy then going, if not to the farmers? (it's a rhetorical question)

Edited January 9, 2014 by monkeycountry

[pedro01]

"The government will not comment on whether it intends to continue the pledging project after the election as that could breach election rules, he said."

lol - so the government is not allowed to discuss future policies in the run up to an election? okaaaay....

[Mosha]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

They paid the farmers directly, no need to wait on any middleman.

Still would have resulted in vast unsaleable stockpiles bought at an inflated price as the world market refused to be manipulated. Prices have dropped, Thailand will have to keep its stocks for a long time before schemes like this see a premium.

Sent from my GT-I9500 using Thaivisa Connect Thailand mobile app

No cos The Dems would have kept the price realistic. If their is a coup. The army should take the farmers to where the rice is stored, and say. "Until that rice is sold, we aren't buying any more." Then show them how much it was bought for and what the markets will pay for it.

[wedders]

Well we shall never know, shall we. I was talking about a policy for the current situation, not one that was applied to a period when the financial problems of the farmers were less acute. Obviously there were schemes in place before, just as there were under earlier manifestations of PT.

The point I was making was about political expediency, and how 'buying votes' of such a major voting block would have happened in some form or other, whoever was in power. It would still have been a cock-up, just with a different political stamp on it. This is Thailand, after all.

Sent from my GT-I9500 using Thaivisa Connect Thailand mobile app

[Robby nz]

"The government already has Bt77 billion cash on hand, and should be able to pay farmers about Bt3 billion to Bt4 billion a day," he said.

If the Govt has 77 billion on hand why don't they give it to the bank now, or last week..?

Then the farmers could be paid.

The government will not comment on whether it intends to continue the pledging project after the election as that could breach election rules, he said.

They have already said that they want a chance to continue with their policies, "vote for us"

However, the ministry has not yet calculated how much the government should earn this year under its rice-sale plan.

Would be nice if they could also calculate how much they will lose.

[Nickymaster]

After 2.5 years the taxpayers ares till in the dark. All companies in Thailand have to submit its statements yearly and larger ones are audited by a third party. PT government can spend 800 billion baht without any justification and transparency.

This has to stop. Don't the democracy loving red shirts agree? Would love to hear their opinion on this.

[Old Man River]

Why doesn't the caretaker-government just transfer the money to BAAC, and get the overdue-bills paid ?

Why does the government have to borrow the money, from anyone, by selling bonds ?

Is the caretaker-government really that broke ?

It is normal to sell bonds for cash flow, as G2G loans take time and BOT reserves need to be kept in reserve. Money is printed and it is "washed" through the bond markets. It doesn't mean the government is broke,

With the Thb 2 trillion loan they would have had plenty of money to pay the farmers, allegedly carve something out for themselves and start the infrastructural Projects. Any shortfalls for infrastructure would come from tax collections, new G2G loans, foreign government aid, or wherever. The old "robbing Peter to pay Paul" is not that uncommon as cash flow is co-mingled, but things become tighter when corruption is involved as is alleged.

My best guess is that the EC will move this decision over to the Supreme Court.

Sent from my iPad using Thaivisa Connect Thailand

[Robby nz]

Well we shall never know, shall we. I was talking about a policy for the current situation, not one that was applied to a period when the financial problems of the farmers were less acute. Obviously there were schemes in place before, just as there were under earlier manifestations of PT. The point I was making was about political expediency, and how 'buying votes' of such a major voting block would have happened in some form or other, whoever was in power. It would still have been a cock-up, just with a different political stamp on it. This is Thailand, after all.

Consider wedders that the previous Govt had an assistance scheme in place that paid the rice farmers direct cutting out the middle man and avoiding most of the corruption.

That scheme cost the country around 60 billion in their time in office.

Had that been continued over the term of this Govt then :

The country would have saved over 400 billion.

There would be no rice mountain.

Thailand would still be the worlds top rice exporter.

Thailand would still have a reputation for a quality product.

The farmers would not be protesting for they would have been paid for the rice they sold to private traders.

The BAAC would not be in a close to broke situation.

[kimamey]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

The democrats had a rice policy when they were in power, one that most people, including the rice farmers, were happy with, and which did not cost the country a fortune.

The fact that you do not know about it suggests that neither side was complaining about the democrat policy, as you would then likely have heard about it in the news.

I do not recall the details, but I am sure you can google them. I am also quite sure the democrats are still in favour of that policy.

So your allegation that it would have been the same circus is wrong, as the democrats policy has already been tried, and evidently there was no circus.

And just to be clear. Many farmers, including their spokesmen, have been asked which rice policy they favour, the PTP or the Democrat? they generally favour the PTP policy, but at the same time they admit that the PTP policy does not bring them that much more money (do not recall the small difference). This begs the question, where are the massive losses from the PTP policy then going, if not to the farmers? (it's a rhetorical question)

I think there was some corruption involved with that scheme as well. Not that it's realistic to expect no corruption. I remember seeing an interview with some farmers who explained how they worked their scam. At least the Democrat's scheme didn't damage Thailand's position as the top rice exporter.

It is true however that they need to show that they have the interests of all the country in mind when they make policy.

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[monkeycountry]

Well we shall never know, shall we. I was talking about a policy for the current situation, not one that was applied to a period when the financial problems of the farmers were less acute. Obviously there were schemes in place before, just as there were under earlier manifestations of PT. The point I was making was about political expediency, and how 'buying votes' of such a major voting block would have happened in some form or other, whoever was in power. It would still have been a cock-up, just with a different political stamp on it. This is Thailand, after all.

Consider wedders that the previous Govt had an assistance scheme in place that paid the rice farmers direct cutting out the middle man and avoiding most of the corruption.

That scheme cost the country around 60 billion in their time in office.

Had that been continued over the term of this Govt then :

The country would have saved over 400 billion.

There would be no rice mountain.

Thailand would still be the worlds top rice exporter.

Thailand would still have a reputation for a quality product.

The farmers would not be protesting for they would have been paid for the rice they sold to private traders.

The BAAC would not be in a close to broke situation.

Not to mention, that with the Democrat policy it was possible to calculate profit/loss and show the public, which apparently is not possible with the PTP scam!

[monkeycountry]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

The democrats had a rice policy when they were in power, one that most people, including the rice farmers, were happy with, and which did not cost the country a fortune.

The fact that you do not know about it suggests that neither side was complaining about the democrat policy, as you would then likely have heard about it in the news.

I do not recall the details, but I am sure you can google them. I am also quite sure the democrats are still in favour of that policy.

So your allegation that it would have been the same circus is wrong, as the democrats policy has already been tried, and evidently there was no circus.

And just to be clear. Many farmers, including their spokesmen, have been asked which rice policy they favour, the PTP or the Democrat? they generally favour the PTP policy, but at the same time they admit that the PTP policy does not bring them that much more money (do not recall the small difference). This begs the question, where are the massive losses from the PTP policy then going, if not to the farmers? (it's a rhetorical question)

I think there was some corruption involved with that scheme as well. Not that it's realistic to expect no corruption. I remember seeing an interview with some farmers who explained how they worked their scam. At least the Democrat's scheme didn't damage Thailand's position as the top rice exporter.

It is true however that they need to show that they have the interests of all the country in mind when they make policy.

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

I have absolutely no doubt there was corruption in the Democrat policy, but at a much much smaller scale, which is proved by the much smaller total loss under that policy - and the fact that the Democrats did not hide the accounts from the public, or claim they were not able to calculate the profit/loss.

[rametindallas]

Slight tangent, but I'm curious to know what policy the Dems would have come up with, had they been in power, to assist the powerful NE voting area (after all that would have been their priority too) - faced with depressed prices, a growing rice stockpile.

Many countries around the world would introduce subsidies in these circumstances. I wonder how much more efficient and immune to corruption the Dems' solution would have been.

It would have been the same circus, different acts.

They paid the farmers directly, no need to wait on any middleman.

Still would have resulted in vast unsaleable stockpiles bought at an inflated price as the world market refused to be manipulated. Prices have dropped, Thailand will have to keep its stocks for a long time before schemes like this see a premium.

Sent from my GT-I9500 using Thaivisa Connect Thailand mobile app

Actually, no. The Dem scheme was to offset the World market price and the cost of production and pay the farmers directly. It cost the taxpayers around 78 billion Baht a year. Since the government was not buying the rice, there was no buildup or stockpile; market forces were still in effect and Thailand was the World's largest rice exporter. The huge stockpiles we now have are the result of the government distorting market forces by having the government buy the rice and for 40% above market prices. Now there is a glut and the government cannot sell the rice they bought and when the government is broke from this scheme, the farmers will have no market and will be in competition with the government to sell their rice. The proof is in the pudding; Thailand is now number 3 in rice exports, the farmers are deeper in debt as they scrambled to increase their production by leasing more land, much of which was unsuitable for growing rice, buying new equipment, buying fertilizer and seedlings at inflated prices, et. al. to paraphrase Ronald Reagan, "The trouble with our Thaksinista friends is not that they're ignorant; it's just that they know so much that isn't so."

Edited January 9, 2014 by rametindallas

[seajae]

Well we shall never know, shall we. I was talking about a policy for the current situation, not one that was applied to a period when the financial problems of the farmers were less acute. Obviously there were schemes in place before, just as there were under earlier manifestations of PT. The point I was making was about political expediency, and how 'buying votes' of such a major voting block would have happened in some form or other, whoever was in power. It would still have been a cock-up, just with a different political stamp on it. This is Thailand, after all. Sent from my GT-I9500 using Thaivisa Connect Thailand mobile app

in other words, the posters nullified your hope you could rubbish the dems so you are now going off on another tangent. The dems had the farmers covered very well but the ptp/thaksin offered them a motza of cash to buy their votes(and cant pay it) and like many thais they loved the idea of getting more money. By saying you must buy the norths votes shows where it is all wrong, you shouldnt have to buy any votes as the people are supposed to vote for what is best for their country not "what in it for me". This has outlined why the people of the south and Bangkok are pissed at the north, the farmers are not taking the countries best into consideration, just their pockets but the south and Bangkok are the ones paying for it because the farmers dont pay the taxes that pay for it. The ptp were told to stop the buy back scheme last year by the advisors as it was unafordable but they put the norths votes first and not the country, lets hope the electoral commision see this for what it is, a pure vote buying excercise by the ptp and that they do not approve it.