Help from rice mills could offer lifeline to Thai govt

[webfact]

Help from rice mills could offer lifeline to govt
PETCHANET PRATRUANGKRAI
THE NATION

NAKHON RATCHASIMA MILLS OFFER PADDY AS SURETY ON LOANS FOR CASH-STRAPPED FARMERS

BANGKOK: -- THE CARETAKER government would appear to have an opportunity for survival if rice mills commit to giving a hand and help suffering farmers awaiting overdue payments under the flagship rice-pledging scheme.

Meanwhile, the Commerce Ministry has accelerated as much as possible the release of rice from the state's inventory. But some farmers' groups are maintaining their protest rallies to keep pressure on the government to pay them off, threatening to block all lanes of the Asia Highway routes.

Eighteen rice mills in are committed to help farmers by using paddy in their granaries as a surety to secure loans from banks for farmers. Such a deal would take only 15 days.

The government, however, should draw up regulations on this matter as quickly as possible, said Prapit Manathanya, president of leading rice mill Chia Meng.

Suthep Thaugsuban, secretary of the anti-government People's Democratic Reform Committee (PDRC), yesterday said on the Silom stage he would support financial institutions, politically speaking, if they would lend the government finance for the rice-pledging scheme.

However, this could not be done legally at present given that the caretaker government has no legitimacy to create any loans that could burden the next government.

"I would like to announce that I'm asking all commercial banks to lend to the Yingluck government urgently, and let nobody thwart them. Let's see what further excuses it [the government] will make," said Suthep.

He added that the PDRC has Bt25 million donated by people that would be used to help fund the cases of farmers suing the government to claim back their delayed payments.

Suthep said the PDRC would hold another big protest rally between tomorrow and February 16, campaigning that Thailand belongs to all Thai people - and is not only the private property of the Shinawatra family.

Yesterday, the Commerce Ministry opened bidding for 467,623 tonnes of rice, part of a 1.2 million-tonne rice-selling plan, which has drawn many traders. This will ensure the government will receive an additional Bt10 billion from its rice sales to pay farmers within a month and a half.

About 18 bidders joined the auction. The result will be announced today (after the ministry bargains for the best price to potential bidders).

The 1.2 million tonnes would be sold through bidding and direct selling to exporters (about 840,000 tonnes) in late January. The ministry will also today open bidding for about 220,000 tonnes of rice to the Agriculture Futures Exchange of Thailand.

The ministry plans to open bidding for another 500,000 tonnes of rice in the stockpiles next week.

Since 2011, the Yingluck government has managed to sell a total of 2.2 million tonnes of rice via the bidding. The ministry reported that since early January to the first week of February, it should be able to return Bt15 billion to the Bank for Agriculture and Agricultural Cooperatives (BAAC) so that it could continuously pay overdue payments to farmers.

Surasak Riangkrul, director-general of the Foreign Trade Department said the ministry might need to accept a selling price slightly below the market price from the bidding as traders have included their operation and transportation costs. If the bidding was too low, the ministry would not accept the price offered by traders.

A source in the Pheu Thai Party said the government may use loans from commercial banks through |borrowing from the Government Savings Bank and BAAC to pay off the farmers.

Protesting farmers in Uttaradit |put pressure on the government to |pay them the rice pledge, threatening they would block the Asia Highway if they didn’t receive payment in seven days. Meanwhile, more than 1,000 growers from 15 provinces in the North and Central regions yesterday gathered in Nakhon Sawan's Muang district to protest against Suthep, accusing him of obstructing loans to fund the government's rice subsidy programme.


-- The Nation 2014-02-13

[Ace of Pop]

I would be supprised if the Rice Mill owners have a line of credit left. They all seem to have blown it on Luxury Cars round here,

[Thait Spot]

The extremely large hole in this is where is the cash coming from?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[thesetat2013]

So by their own account the bidding is to buy the rice at less than market value. Maybe the caretaker gov does not care about the huge loss of taxpayers money as long as they win the support of the farmers again. The kicker is that the PTP and YL fully support this scheme still and if they continue in office they will continue this scheme at ANY COST!

It also makes me wonder how much rice being bought thru bidding will be sent back since it is almost certain a good portion of their stockpiles are rotten.

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

[worgeordie]

I thought the rice millers had not been paid by the Government for

storage fees for the last year, and now the are going to loan money

to the Government to pay the farmers,and a caretaker Government

at that, better to put it on a horse or spin of the roulette wheel.

regards Worgeordie

[drand11]

Do you not know that this rice policy is setup to lose money. This is the very purpose of the program. It loses approx. 20% and has done so for 2 years. All payments are up to date thru Oct 2013. (Some bilks owed for Sept due to confirmation of paperwork). These are all facts.

[drand11]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Edited February 13, 2014 by drand11

[rogerdee123]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

I know the US pays some farmers not to produce crops .... when surpluses are expected ..... which is very controversial also.

I know that the USG often buys surplus commodities like wheat and soybeans etc (I thought at market prices) and then gives it away as foreign aid.

But I don't know of the US paying significantly more (double ?) than the market price for commodities. I could be wrong. Is it true?

I'm not challenging you ... just wondering ... in the spirit of "there must be a better way to help poor farmers than this crazy rice scheme".

[allan michaud]

The extremely large hole in this is where is the cash coming from?

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

Apparently the banks, although I can't see too many banks agreeing to use rice as collateral. Far too many holes is this idea for it to have a remote chance of working.

Again this article has more dubious numbers being quoted.

The govt is to release another 467,000 tons, for which they expect to get Baht 10billion = 21,385 per ton (no chance when the global price is nearer 12,000 per ton)

or

The govt is to release another 1.2million tons, for which they expect to get Baht 10billion = 8,300 per ton (more realistic and gives a good idea just how much money these idiots are costing the country.

But, either way it's a drop in the ocean of the money owed to the farmers.

[ggold]

I would be supprised if the Rice Mill owners have a line of credit left. They all seem to have blown it on Luxury Cars round here,

I think the government are hoping some of the scam proceeds will be returned to them for the farmers!

[ggold]

Do you not know that this rice policy is setup to lose money. This is the very purpose of the program. It loses approx. 20% and has done so for 2 years. All payments are up to date thru Oct 2013. (Some bilks owed for Sept due to confirmation of paperwork). These are all facts.

Is that supposed to be some sort of Justification for the scam? I think you'll find the lose is more than 20% per annum. and the fact still remains that they haven't been able to sell the rice as claimed!!!

[Crushdepth]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Not like this they don't.

[mic6ard]

So by their own account the bidding is to buy the rice at less than market value. Maybe the caretaker gov does not care about the huge loss of taxpayers money as long as they win the support of the farmers again. The kicker is that the PTP and YL fully support this scheme still and if they continue in office they will continue this scheme at ANY COST!

It also makes me wonder how much rice being bought thru bidding will be sent back since it is almost certain a good portion of their stockpiles are rotten.

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

But unfortunately it's a little too late, I think that they farmers have no trust left for this gov't. Also price of rice is way below the price the gov't have to pay the farmers. There will still be shortfalls in payment.

Release the rice too fast, you'll flood the market, causing price to drop, increasing the differences in payment yet again.

It's a no win situation for anybody

[smedly]

So by their own account the bidding is to buy the rice at less than market value. Maybe the caretaker gov does not care about the huge loss of taxpayers money as long as they win the support of the farmers again. The kicker is that the PTP and YL fully support this scheme still and if they continue in office they will continue this scheme at ANY COST!

It also makes me wonder how much rice being bought thru bidding will be sent back since it is almost certain a good portion of their stockpiles are rotten.

Sent from my GT-S5310 using Thaivisa Connect Thailand mobile app

and you're only getting this now Sherlock - try and keep up

Most people became aware 2 years ago

Sorry for being so blunt

[thesetat2013]

Do you not know that as of a week ago your "some farmers" was approximately 1.3 million people? I dont know about you but that is a lot more than just SOME.

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[allan michaud]

Do you not know that this rice policy is setup to lose money. This is the very purpose of the program. It loses approx. 20% and has done so for 2 years. All payments are up to date thru Oct 2013. (Some bilks owed for Sept due to confirmation of paperwork). These are all facts.

20% loss! What planet have you been on for the past 2 years? You must be joking, the losses are at least 50%. Look at the latest proposed sale. They bought at 15,000 per ton and are planning to sell 1.2 million tons at 8,300 per ton (45% drop in value)... and that does not take into account the admin and storage costs.

I would love to see the 'facts' you claim to have regarding a 20% loss, please post.

[allan michaud]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Yes that is correct but can Thailand afford to lose $3 to $5billion per year on this, not to mention the damage to the export business? It is also a matter of the apparent corruption (not suggesting there is no corruption in the west).

If you really wanted to help the farmers the best way is direct payments, not buying the rice and stockpiling it in the mistaken hope of pushing the global price up. Barring a massive global catastrophe the price of Thai rice will only continue to drop as everyone knows they have a massive stockpile that no one wants to buy. The scam has cost at least twice what it would have if they just paid the farmers directly; in addition they have destroyed the Thai rice export business and driven down it's resale value.

[robblok]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Yes that is correct but can Thailand afford to lose $3 to $5billion per year on this, not to mention the damage to the export business? It is also a matter of the apparent corruption (not suggesting there is no corruption in the west).

If you really wanted to help the farmers the best way is direct payments, not buying the rice and stockpiling it in the mistaken hope of pushing the global price up. Barring a massive global catastrophe the price of Thai rice will only continue to drop as everyone knows they have a massive stockpile that no one wants to buy. The scam has cost at least twice what it would have if they just paid the farmers directly; in addition they have destroyed the Thai rice export business and driven down it's resale value.

The reason they did the program the way they did is simple. This way they did not have to budget too much for it as it would make the cost look low. Only when they sold the rice would losses come and they did not sell and try to hide it all the time.

Had they done it an other way by a direct payment to the farmer not only could they scam less also the budget would have been higher and other projects (where they scammed and stole from too) would have their budgets slashed.

They had to make this program on paper look cheap (nobody believed it but on paper they could ignore everyone)

On paper this looks cheap and the direct payment expensive but that is only on paper the reality is totally different. Welcome to the universe of PTP where lying is a way of life just ask the minister of white and black lies.

It was a setup from the beginning to maximize corruption on all fronts.

Edited February 13, 2014 by robblok

[aimbc]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

No one is arguing about subsidy program and it's merit. What is in question is the 700Billion spent on the polices and yet 1.4 millions farmers have not been paid. Do you think the corn farmers in US would stand for 1.4 million bounced checks? You really missed the boat on this one.

[aimbc]

IMO these millers are making a deal with the government. I will bet they will be allowed to charge some extra administrative fees to the government for their supposedly good deed. This is where more corruption can be had. Nothing is free my friends. What will the millers put as collateral, the 20 million tons of rice, which may be way less than that. I feel sorry for those who will have to suffer not getting paid. And who is going to be paying the interest incurred by the loan. The people of Thailand I guess. Got to love the Great Rice Robbery. Steal and leave the taxpayers holding the bag. Classic PTP SOP (Standard Operating Procedure). And no wonder why the law enforcement agencies are a joke here in Thailand.

[Crushdepth]

So by their own account the bidding is to buy the rice at less than market value. Maybe the caretaker gov does not care about the huge loss of taxpayers money as long as they win the support of the farmers again. The kicker is that the PTP and YL fully support this scheme still and if they continue in office they will continue this scheme at ANY COST!

It also makes me wonder how much rice being bought thru bidding will be sent back since it is almost certain a good portion of their stockpiles are rotten.

The bidders know the government is in distress, they'll be looking for fire-sale prices.

[billd766]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Yes that is correct but can Thailand afford to lose $3 to $5billion per year on this, not to mention the damage to the export business? It is also a matter of the apparent corruption (not suggesting there is no corruption in the west).

If you really wanted to help the farmers the best way is direct payments, not buying the rice and stockpiling it in the mistaken hope of pushing the global price up. Barring a massive global catastrophe the price of Thai rice will only continue to drop as everyone knows they have a massive stockpile that no one wants to buy. The scam has cost at least twice what it would have if they just paid the farmers directly; in addition they have destroyed the Thai rice export business and driven down it's resale value.

That is a greatidea. I wonder why nobody ever thought of that.

Wait just a minute. It is coming back to me now.

It WAS done back between the PPP and the PTP governments but what was their name now. That's right the Democrat Party did it.

They did it. It was cheaper and more efficient than ANY Thaksin rice scheme but as it was a Democratic party plan the PTP promptly scrapped it in favour of the (Thaksin thinks and PTP obeys) plan which is why the country is where it is today.

[Scamper]

" Yesterday, the Commerce Ministry opened bidding for 467,623 tonnes of rice, part of a 1.2 million-tonne rice-selling plan, which has drawn many traders. This will ensure the government will receive an additional Bt10 billion from its rice sales to pay farmers within a month and a half. "

The administration does not have that time. The administration's greatest foe at this point is the clock. The constraints of Article 7 will be fully in effect on April 1. If their chief worry is staying in power, they've lost that. There are no scheduled elections for the 28 candidate-lacking constituencies because the administration does not agree with the EC that they require a new decree. Advance elections and senate elections have been scheduled, but no addressing of all the constituencies that closed prematurely or did not open at all. All of that points to Article 7, inevitably, under any conceivable timeline. Article 7 - unlike the Yingluck administration - is determined through specific timelines. That clock started ticking on February 2. The Yingluck administration does not know which ball to look at. There are daily announcements regarding CMPO's latest targets, daily announcements that the farmers will be paid, though the means always appear maddeningly vague, but no announcements whatsoever on the incomplete election process. The only question will be - which will come first - the courts - or Article 7.

Edited February 13, 2014 by Scamper

[belg]

yes, let the middleman profit again, as he did in this scheme

and he can get a nice loanshark profit on top of it

but these people are willing to get, but to give... I guess not...

why not an obligation, at the airports, for every tourist, to buy 10 kg of rice for a premium price off course, usual overcharge fees will apply

[rogerdee123]

IMO these millers are making a deal with the government. I will bet they will be allowed to charge some extra administrative fees to the government for their supposedly good deed. This is where more corruption can be had. Nothing is free my friends. What will the millers put as collateral, the 20 million tons of rice, which may be way less than that. I feel sorry for those who will have to suffer not getting paid. And who is going to be paying the interest incurred by the loan. The people of Thailand I guess. Got to love the Great Rice Robbery. Steal and leave the taxpayers holding the bag. Classic PTP SOP (Standard Operating Procedure). And no wonder why the law enforcement agencies are a joke here in Thailand.

For sure the millers aren't going to buy into this unless they too can make a 200% profit.

[rogerdee123]

People question the policy of losing money on a Rice subsidy plan. Well, many industrialized nation has govt programs for subsidized food products. It is very common. USA subsidizes our farmers to help them maintain farms against less costly products that are imported from other countries.

Yes that is correct but can Thailand afford to lose $3 to $5billion per year on this, not to mention the damage to the export business? It is also a matter of the apparent corruption (not suggesting there is no corruption in the west).

If you really wanted to help the farmers the best way is direct payments, not buying the rice and stockpiling it in the mistaken hope of pushing the global price up. Barring a massive global catastrophe the price of Thai rice will only continue to drop as everyone knows they have a massive stockpile that no one wants to buy. The scam has cost at least twice what it would have if they just paid the farmers directly; in addition they have destroyed the Thai rice export business and driven down it's resale value.

That is a greatidea. I wonder why nobody ever thought of that.

Wait just a minute. It is coming back to me now.

It WAS done back between the PPP and the PTP governments but what was their name now. That's right the Democrat Party did it.

They did it. It was cheaper and more efficient than ANY Thaksin rice scheme but as it was a Democratic party plan the PTP promptly scrapped it in favour of the (Thaksin thinks and PTP obeys) plan which is why the country is where it is today.

Yes this is classic Thaksin business idea ... he couldn't run a profitable business without a monopoly ... he's so clever because he manipulated the markets he got into .. like the Thai mobile phone business and his monopoly ...

So he intended to manipulate the world rice market. Of course he's an idiot for thinking he could do what he did in Thailand on a worldwide scale ... but of course everyone knows he's arrogant and this is the way he thinks ... manipulation is his strategy and objective. His business ideas cannot succeed in a (real) competitive free market economy.

It's no secret he was trying to manipulate the world rice market .. even he himself admits this. He's a manipulator and willing to screw anyone who gets in the way (like India, Vietnam, and other rice producers & exporters ... including USA ha ha).

It just doesn't make sense to me why people would want someone like this for PM ....

Edited February 13, 2014 by rogerdee123