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

[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.

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.

The middleman is too often portrayed as the bogeyman, leaching off the income the producers should earn, or bringing about inflated prices to the end consumer.

Ok in Thailand it's one more opportunity for corruption. But the reality is throughout the capitalist system middlemen bring essential expertise that 'can' result in lower prices, greater efficiency, and a vital service to suppliers of a service or product.

I've acted as the principal UK transport middleman for a US manufacturer with a $66 billion worldwide annual turnover for the last 23 years. That's despite the business being put out to tender every couple of years, competing against multinational transport companies, and a total lack of corruption involved. Market forces have decided that it benefits the manufacturer, its suppliers, and consumers.

The complexity of international commerce makes the involvement of middlemen inevitable. Manufacturers/government etc don't have the expertise or manpower to deal with each supplier or customer. Suppliers would need extra employees and knowledge to deal with all the supplementary sales work and red tape.

So in many, many circumstances, the middleman is a necessary evil. So long as he isn't too greedy.

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[NoBrainer]

The last line of this story "However, the ministry has not yet calculated how much the government should earn this year under its rice-sale plan." should read

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

And as was asked earlier, YES the government is broke, which is why they have to borrow even more money for this scheme. All of the money so far

used for this scheme has been borrowed, and the government now owes the BAAC in excess of 500 Billion Baht, so they have been running this whole scheme on borrowed money that will have to be paid back by the next generations.

They should not be allowed to continue borrowing like a drunken sailor.

Edited January 9, 2014 by NoBrainer

[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

in other words, the posters nullified your hope you could rubbish the dems so you are now going off on another tangent.

So oh wise one, how do you square that with the fact that I think PT rice scheme was ludicrous and doomed to failure, that PT's policies since 2011 have been largely catastrophic, and that I would be delighted to see a party in power, Democrat or otherwise, capable of rising above the current fiasco and of good, corruption-free governance?

No, I was expressing the somewhat pessimistic view that currently whoever is in power is incapable of government free of corruption, cronyism, favouritism, collusion, nepotism. We are a long way from seeing a genuine meritocracy in Thailand.

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[Scamper]

It is ironic that the very oversight that should have been possible in parliament - but was not - to dissect all the messy details of these massive procurements are now - at long last - being microscoped in embarrassing detail by the EC. And what a tale of intrigue they will uncover. It's delicious.

[Robby nz]

The middleman is too often portrayed as the bogeyman, leaching off the income the producers should earn, or bringing about inflated prices to the end consumer.

Ok in Thailand it's one more opportunity for corruption. But the reality is throughout the capitalist system middlemen bring essential expertise that 'can' result in lower prices, greater efficiency, and a vital service to suppliers of a service or product.

I've acted as the principal UK transport middleman for a US manufacturer with a $66 billion worldwide annual turnover for the last 23 years. That's despite the business being put out to tender every couple of years, competing against multinational transport companies, and a total lack of corruption involved. Market forces have decided that it benefits the manufacturer, its suppliers, and consumers.

The complexity of international commerce makes the involvement of middlemen inevitable. Manufacturers/government etc don't have the expertise or manpower to deal with each supplier or customer. Suppliers would need extra employees and knowledge to deal with all the supplementary sales work and red tape.

So in many, many circumstances, the middleman is a necessary evil. So long as he isn't too greedy.

There is no doubt for the need of the so called middleman, the miller, cartage contractor, packaging Co, retailer, exporter, shipping Co, importer.

However the idea is to support the farmer not the whole chain.

That being the case then why should the money be paid to someone farther up the chain when it is possible to pay it direct as was done in the past ?

[Ulic]

Sell rice to pay the farmers,.........no problem,..........borrow money to pay the farmers,..... big problem....

Farmers not paid before the election,..........Biggest problem.

[spirit47]

Look at the rice price chart http://www.indexmundi.com/commodities/?commodity=rice&months=240&currency=thb (world market) for 20 years, and tell me what is the problem. If they can not produce for this prices, than anything must be wrong.

Its normal in a global market, that small farming can not perform with mass-products.

I only know, that this votes from rice farmers are the most expensives that Thailand have ever seen.

Im sure that the land-grabers standing ready...

[tingtongteesood]

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

I am getting so bored of the 'Dems are just as bad as Thaksin' argument.....

[MaxLee]

Sell rice to pay the farmers,.........no problem,..........borrow money to pay the farmers,..... big problem....

Farmers not paid before the election,..........Biggest problem.

Taxpayers who HAVE to pay the price,... Atomic bomb annihilation!!!!!!!!!!

[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 ?

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

Thanks, and I do understand some of the day-to-day financing of government spending, but when they offer B75-billion of bonds to the markets at a raised premium, but only sell half that amount, wouldn't you agree that something is seriously wrong ?

And why is it the BAAC and farmers, who get the shitty unpaid-end of the stick, rather than paying the police or politicians late, is that policy (then the farmers should be told !) or incompetence ?

This problem has been several months in-the-making, that it wasn't foreseen or solved in advance, I find deeply worrying.

[Thait Spot]

Farmers make rice

Rice Makes Paper

Paper Makes Money

Money Makes Banks

Banks Make Loans

Loans Make Beggars

Beggars Make Rice

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[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

Thanks, and I do understand some of the day-to-day financing of government spending, but when they offer B75-billion of bonds to the markets at a raised premium, but only sell half that amount, wouldn't you agree that something is seriously wrong ?

And why is it the BAAC and farmers, who get the shitty unpaid-end of the stick, rather than paying the police or politicians late, is that policy (then the farmers should be told !) or incompetence ?

This problem has been several months in-the-making, that it wasn't foreseen or solved in advance, I find deeply worrying.

It means they priced the bonds too low for investor's perceived risk. Sweeten it, and the bonds will sell. They are far from junk bonds.

Thaksin's popularity is built on trust. There is no need to disclose anything that could negatively impact that trust, unless you absolutely have to and they are not there yet. The farmers will ultimately be paid. The gov't apparently had some things in the works, but they didn't happen, slowing down the payment process. The EC has given them approval to sell the bonds so now it is all up to how expensive it will be.

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[fish fingers]

is anyone going to jail for this rice scam? How much has it cost thailand and how much are farmers relying on these extra handouts?