Rice-pledging scheme: Urgent funding sought for Thai farmers

[webfact]

Urgent funding sought for farmers
PIYANART SRIVALO
THE NATION

BANGKOK: -- THE NATIONAL Rice Policy Committee will today ask the Cabinet to allocate Bt10 billion to Bt20 billion from the central budget as an urgent measure to help farmers owed payments under the rice-pledging programme.

"The committee will further seek approval from the Election Commission if the Cabinet gives the nod," caretaker Commerce Minister Niwatthumrong Boonsongpaisan said yesterday after chairing a meeting of the committee.

The committee also accepted that because of the government's caretaker role, it could not proceed with the rice-pledging project for the second-crop rice season beginning in June, which could affect farmers' incomes.

Niwatthumrong said the committee agreed to ask for a special budget from the Cabinet to help farmers in the short term, while the government would accelerate rice sales to raise more money for them.

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

However, Niwatthumrong accepted that its expected earnings from rice sales would not by themselves be enough to cover the Bt110 billion or so still owed to farmers within a short period. The caretaker government needs to get approval from the EC to issue bonds, and also for some budget allocations from the Cabinet.

The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.

Also yesterday, the Bank for Agriculture and Agricultural Cooperatives held a board meeting to consider how to raise funds to help the farmers. The meeting had not concluded by press time.

Recently, it emerged that the BAAC might issue promissory notes worth Bt80 billion to pay the farmers. The first batch was expected to be Bt20 billion. The state-owned Vayupak Fund was reportedly one targeted purchaser of the notes.

MFC Asset Management, one of the Vayupak fund managers, said yesterday that the fund would follow its investment policy as designed previously.

The fund is allowed to invest in equities categorised in SET 50 listed companies and is able to hold bonds as liquidity to manage its investment shift to equities more easily.

"As of now, the Vayupak Fund, which has two committees - regulatory and investment - has not called for a meeting. So the fund's investment policy will be unchanged," said MFC first executive vice president Pannarat Bhanpato.

Meanwhile, Veera Vutthikongsiri-gool, senior executive vice president of Krungthai Asset Management, another Vayupak fund manager, said the fund committee would have to see whether the BAAC's promissory notes would offer an interesting yield and maturity period.

However, he said that if the fund decided to invest in the promissory notes, it would not mean that it would have to offload its investment in equities in order to buy them.

Sombat Narawutthichai, secretary-general of the Government Pension Fund, yesterday again denied a rumour that the Finance Minister had an idea to ask the Finance Ministry might ask the GPF to invest in the promissory notes issued by the BAAC to fund the government's rice project. Moreover, he insisted that the GPF had not called for an urgent meeting of its board members to discuss the matter.

"The next meeting, which is an ordinary one, will take place by the end of March," said Sombat, adding that the fund's portfolio was now fully invested.


-- The Nation 2014-02-25

[notmyself]

Sounds like an IOU to me.

[Robby nz]

The committee also accepted that because of the government's caretaker role, it could not proceed with the rice-pledging project for the second-crop rice season beginning in June, which could affect farmers' incomes.

Behind the time mate the harvest has already started, taken last week :

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.

Given that they sold 6.95 million tons of rice last year it would seem very unlikely that they have sold a million tons a month this year and will sell another million each month from here on in.

Also see that the caretaker minister estimates the stockpile at 12 to 13 million tons whereas independent agencies estimate it at 18 million tons, quite a difference, wonder who is correct.

[chainarong]

Twaddle, the caretaker government has no permission to interfere in the budget that was handed down before going into caretaker mode, the caretaker government has very limited avenue to raise finance, the end result in this episode is more disappointment's for the Rice farmers, I am starting to wounder what the other farmers are starting to think about all this, as they where looking for hand-outs last year

[Langsuan Man]

I thought this whole saga had been solved and the farmers given their money so that they would not go to the airport last week ?

Or was that is some parallel universe

[ramrod711]

Niwatthumrong said the committee agreed to ask for a special budget from the Cabinet to help farmers in the short term, while the government would accelerate rice sales to raise more money for them.

Alternate headline; PTP asks for blank cheque for corruption ridden rice program.

[PatOngo]

Why not sell the heap of scrap metal floating at Sattahip naval dock?

[tomyummer]

Thais just suck at book keeping and balancing ledgers. Most businesses I know keep two books and apparently the government doesn't keep any. How in the world is this rice debacle going to be remedied? A bunch of headless chickens could probably find funds faster.

[Valentine]

I thought this whole saga had been solved and the farmers given their money so that they would not go to the airport last week ?

Or was that is some parallel universe

It was a "cheque's in the mail" deal. The leader turned out to be a member of one of the coalition parties (Banharn's) & supporter of Mr T so who knows what shenanigans were involved.

[moe666]

It looks like the farmers will be back in Bangkok next week as there will be no money to pay.

[Bocking]

If the farmers are to be paid, then it's clear that the money has got to come from external sources.

If the Government's current debt to the farmers is as reported, Bt130 billion, and upcoming rice auctions are expected to raise Bt6,000 per tonne, then in order to cover the debt from within the scheme, they need to sell 22 million tonnes of rice. (That assumes there's no corruption or wastage)

The rice traders have beaten the Government in a game that the Government designed, but could never win. The arrogance that they could possibly manipulate the world rice market is simply beyond belief. It's akin to me jumping in the ring @ Thai Fight with Bua Kow and expecting to come away with no broken bones and a trophy.

[Ricardo]

Hang on one moment, if :-

"For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month."

doesn't that make for an average selling-price of only B8,000 per-tonne ?

Whether domestic-sales, or the invisible-G2G ones, that's an awfully low price-per-tonne !

[rubl]

No margin in the National Budget., sorry.

The Pheu Thai led government kept the rice price pledging scheme and costs outside the National Budget 'on purpose' so as to avoid parliamentary scrutiny. Even with that they planned a 250 or 300 billion Baht deficit. It would seem that some of the normal Transport Ministries activities like 'road repair', 'SRT dual tracking' and others have been taken out to be put in the 2.2 trillion Transport Improvement dream.

[JesseFrank]

Hey, didn't those farmers make a U-turn last week because they would be paid starting from yesterday ?

Clearly the OP must be out of date.

[AleG]

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

...

The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.

8 billion from selling 1 million tons, 12 to 13 tons in stock, 130 billion owed. Let's see, 13 billion tons would then yield 104 billion Baht...

So even if they sold off the entire accumulated stock from the previous two and a half years (plus what was already in stock before the start of the scheme) they wouldn't have enough money to pay back the farmer.

That's not even taking into account how dumping that much rice would further depress international prices.

What part of this spells "success"?

[robblok]

No margin in the National Budget., sorry.

The Pheu Thai led government kept the rice price pledging scheme and costs outside the National Budget 'on purpose' so as to avoid parliamentary scrutiny. Even with that they planned a 250 or 300 billion Baht deficit. It would seem that some of the normal Transport Ministries activities like 'road repair', 'SRT dual tracking' and others have been taken out to be put in the 2.2 trillion Transport Improvement dream.

The whole point or at least one of the points was that on paper the rice scheme would not loose any money and even make money. Else they could not spend as much on the other things they wanted (as a result could steal less there !!!) Also they needed more money for all their vote buying ehh.. popular policies.

That is the reason for it, but now 700 billion loss on it in 2 years or so, incompetency or was it all planned this way (seems that way).

Corruption how you look at it it should enough to impeach the government and get rid of it maybe with some jailtime for those in the rice program.

[rubl]

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

...

The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.

8 billion from selling 1 million tons, 12 to 13 tons in stock, 130 billion owed. Let's see, 13 billion tons would then yield 104 billion Baht...

So even if they sold off the entire accumulated stock from the previous two and a half years (plus what was already in stock before the start of the scheme) they wouldn't have enough money to pay back the farmer.

That's not even taking into account how dumping that much rice would further depress international prices.

What part of this spells "success"?

Even if selling all rice would make it possible to pay all farmers, it would seem the scheme which started on the 7th of October, 2011 has managed to deplete the state coffers of 700 billion Baht. The BAAC still wants that money back I would assume. The taxpayers want an accounting of that amount. The NAAC is also finally showing the courage to question.

[JesseFrank]

They wouldn't look bad at the corner of each street , with such a green jacket and sign begging for money. I suggest if they cut a leg here and there, it will improve the funding.

[JesseFrank]

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

Hold on a minute.

If they have succeeded in selling 1 million tonne of rice a month at 8 Billion a tonne for the past 4 months, totaling 32 Billion Baht, then why nobody has been paid during those 4 months.

Edited February 25, 2014 by JesseFrank

[lemonjelly]

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

...

The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.

8 billion from selling 1 million tons, 12 to 13 tons in stock, 130 billion owed. Let's see, 13 billion tons would then yield 104 billion Baht...

So even if they sold off the entire accumulated stock from the previous two and a half years (plus what was already in stock before the start of the scheme) they wouldn't have enough money to pay back the farmer.

That's not even taking into account how dumping that much rice would further depress international prices.

What part of this spells "success"?

million

Edited February 25, 2014 by lemonjelly

[lemonjelly]

For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month.

Hold on a minute.

If they have succeeded in selling 1 million tonne of rice a month at 8 Billion a tonne for the past 4 months, totaling 32 Billion Baht, then why nobody has been paid during those 4 months.

thousand

Edited February 25, 2014 by lemonjelly

[nong38]

Perhaps someone should ask the PM where the money to run this daft scheme has gone, the buck stops with you Mrs!

[soalbundy]

Oh what a tangled web we weave

When first we practice to deceive

[bumpkin]

Time for the Agriculture and Rural Economics Faculties of Thai Universities to stand up and do something,

The Farmers may have learnt at long last the true value of Politicians promises. ( That is Universal, not exclusively a Thai phenomenon ).

What are needed urgently for future cropping seasons are sound, agronomic plans for farmers and the rural community.

Introduce " best practice ", appropriate crop varieties, improved crop and animal management, co-operative marketing effort - all the things that Extension workers have done for years from many Western universities.

It's not about introducing high costs systems. It's about being realistic with the level of skills, capital and other resources that are available, and matching them to the marketing possibilites that exist or that can be created.

Note to Farmers: Forget wasting your time at political rallies. Knock on the doors of your nearest Agricultural college / University.