Bt20 billion ready for rice farmers next week: Rice-pledging scheme

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RICE-PLEDGING SCHEME
Bt20 billion ready for rice farmers next week
Business Desk
The Nation

EC approves govt request; funds to be repaid from proceeds of rice sales by May 31

BANGKOK: -- Farmers who hold pledging receipts issued under the government's rice-pledging scheme last November are expected to be paid next week, in a breakthrough that could ease one of the Yingluck Shinawatra-led government's most serious political problems, at least in the short term.

The Election Commission's board yesterday approved a request by the caretaker government to use an additional Bt20 billion from the national budget to pay the farmers, who are still waiting for payments that were due in November.

The government must return the funds to the budget by May 31.

Caretaker Finance Minister Kittiratt Na-Ranong yesterday clarified to the EC the reasons the government needs the Bt20 billion for the rice-pledging scheme.

After the meeting with Kittiratt, EC member Somchai Srisuthiyakorn posted on his Facebook page that the funds would be considered an advance payment, which would be repaid in full by the Foreign Trade Department to the Finance Ministry by May 31.

The funds to cover the repayment would come from the department's sale of rice from the state's stockpile.

In his Facebook post, Somchai said the EC approved the use of central-budget funds for six reasons.

First, the EC has the power to approve the additional budget, which was requested as an urgent case.

Second, Somchai said, the Bt20 billion is considered borrowing - not expenditure - and the government will have to return all of it after earning money from the sale of rice.

Third, the Public Debt Management Office has assured the EC that the amount will be returned in May, and that the use of the funds will not affect the nation's reserves set aside for emergency cases.

Fourth, the Foreign Trade Department assured the EC that it could earn Bt8 billion a month from rice sales, totalling Bt24 billion over three months.

Fifth, the due date for the return of the funds, May 31, is expected to be within the time frame of the current caretaker government, so the move is unlikely to place any obligations on the next government.

Sixth, the Bt20 billion will be paid to farmers who received pledging receipts in November, before the dissolution of the House of Representatives. Therefore, the payment to the farmers cannot be seen as a move to gain an advantage in the ongoing election.

Somsak Chotrattanasiri, budget director of the Budget Bureau, said yesterday that the Bt20 billion should reach farmers next week via the Bank for Agriculture and Agricultural Cooperatives.

"Using Bt20 billion as an advance payment should not create any problems, as there is still almost Bt70 billion left in the nation's central budget," he said.

Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.

Caretaker Deputy Commerce Minister Yanyong Phuangrach said the money from the central budget should reach the farmers over the next week. When combined with money earned from rice sales - which he said should amount to Bt10 billion a month - there should be sufficient funds to pay farmers waiting for payments from December as well.


-- The Nation 2014-03-05

[Davidhere]

110 Billion Baht short as the fiasco rolls on.

.

Edited March 4, 2014 by Davidhere

[Robby nz]

"Using Bt20 billion as an advance payment should not create any problems, as there is still almost Bt70 billion left in the nation's central budget," he said.

It was reported earlier that the fund stood at 70 billion before the 20 billion was loaned and the 10 billion for Chalerm so therefore it will now be 40 billion.

Fourth, the Foreign Trade Department assured the EC that it could earn Bt8 billion a month from rice sales, totalling Bt24 billion over three months.

Caretaker Deputy Commerce Minister Yanyong Phuangrach said the money from the central budget should reach the farmers over the next week. When combined with money earned from rice sales - which he said should amount to Bt10 billion a month - there should be sufficient funds to pay farmers waiting for payments from December as well.

Something wrong here, if they are going to repay at 8 billion a month and pay the farmers at 10 billion a month that will mean they have to sell 18 billion worth of rice each month.

Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.

20 billion for 600,000 tons ?

[looping]

20 billion baht loan with rotten rice as collateral.

Let's hope they can sell some by May and recoup some of their 'losses'.

Sent from my iPad using Thaivisa Connect Thailand mobile app

[looping]

20 billion baht loan with rotten rice as collateral.

Let's hope they can sell some by May and recoup some of their 'losses'.

I expect they'll have trouble finding an international buyer who will trust them further than they can throw them.

Maybe the domestic market is their best option.

Sent from my iPad using Thaivisa Connect Thailand mobile app

Sent from my iPad using Thaivisa Connect Thailand mobile app

[bangkokheat]

looks like alcohol and cigarettes will be going up again

[chainarong]

Under the present rules this pledge will be dishonoured , lets see how right I am.

[IMA_FARANG]

110 Billion Baht short as the fiasco rolls on.

.

====================

Next week, huh.

Let me see. I've lost track.

How many times has this "next week" promise been made now?

Is it 5 or is it 6 now?

Once again .... the basic problem with the rice scheme is that the pledge price is to high.

Therefore, even if the stored rice is sold at current market price the amount earned will never be enough to pay all the farmers who are owed money by those pledges.

THAT is the root cause of the fact that the scheme is always short of money (and always will be) to compensate farmers for their pledged rice.

The only solution is to set the pledge price to a competitive price with the fair market price.

Or abandon the whole scheme.

[Luk Mhee]

Not only are they struggling to find money for paying the farmers, they now can’t find the money to pay student loans.

[Chupup]

That's about 33000bht per ton of rotten rice seems a bit high.............................

[Chupup]

think this payment will be another "Maybe"

[onlycw]

Kicking the can down the road...

How about announcing the end to the ill fated scheme for future harvests?!?

Or buying rice only from the 2.59 million small farmers who couldn't participate in the past?

...

How does this prediction fit in with the announced sale of "800,000 tons per month" a few days ago? I don't like the math. And it's always about winning time.

[rametindallas]

14 second video of Thailand's Commerce Minister regarding payment to farmers.

http://www.youtube.com/watch?v=NJ6xBaZ92uA

Edited March 5, 2014 by rametindallas

[Gunna]

110 Billion Baht short as the fiasco rolls on.

.

====================

Next week, huh.

Let me see. I've lost track.

How many times has this "next week" promise been made now?

Is it 5 or is it 6 now?

Once again .... the basic problem with the rice scheme is that the pledge price is to high.

Therefore, even if the stored rice is sold at current market price the amount earned will never be enough to pay all the farmers who are owed money by those pledges.

THAT is the root cause of the fact that the scheme is always short of money (and always will be) to compensate farmers for their pledged rice.

The only solution is to set the pledge price to a competitive price with the fair market price.

Or abandon the whole scheme.

And now add this news

India likely to export 18 mln tonnes rice, wheat in 2013/14 - govt adviser

BY JO WINTERBOTTOM AND MAYANK BHARDWAJ

NEW DELHI Mon Feb 24, 2014 4:44pm IST

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Feb 24 (Reuters) - India is likely to export about 18 million tonnes of rice and wheat in 2013/14, the government's adviser on farm prices said, as the world's second-biggest producer of these grains looks for ways to handle another record crop.

Ashok Gulati also suggested India should release 15-20 million tonnes of the grains for open market sales to cut massive mounds of stocks and help ease food inflation.

India, the world's biggest rice and wheat producer after China, exported 22 million tonnes of the grains in the last fiscal year to March 31, 2013 after New Delhi lifted a four-year-old ban on overseas shipments of the staples in late 2011.

"Exports of 2012/13 and likely exports this year mean 40 million tonnes of shipments. You look at whatever historical data you have, India has never ever done that," said Gulati, chairman of the Commission on Agricultural Costs and Prices.

[kikoman]

Great news the EC finally approved the loan to pay the farmers, 3 months overdue but a still a good decision finally for the EC and the country!

Cheers

[JesseFrank]

Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.

Why selling it now, it seem to be a better investment than gold. Selling a commodity that's going for 8000 Bht/tonne on the world market for 33.000 Bht/tonne locally is something one can only dream about.

Or maybe that is just what it is A DREAM .

[klauskunkel]

I just wonder when it will become compulsory for Thais to join Facebook...

[Davidhere]

Meanwhile, the Foreign Trade Department reported that caretaker Commerce Minister Niwatthumrong Boonsongpaisan had approved the sale of 600,000 tonnes of rice in separate auctions to 11 private companies who took part in bidding, earning a total of Bt20 billion.

Why selling it now, it seem to be a better investment than gold. Selling a commodity that's going for 8000 Bht/tonne on the world market for 33.000 Bht/tonne locally is something one can only dream about.

Or maybe that is just what it is A DREAM .

Perhaps Deputy Commerce Minister/Indicted Red Shirt Leader Natthawut did the math for Commerce Minister Niwatthumrong.

.

[billd766]

Great news the EC finally approved the loan to pay the farmers, 3 months overdue but a still a good decision finally for the EC and the country!

Cheers

Why should the government have to borrow the money to pay the farmers?

Wasn't the rice scheme supposed to be a revolving fund?

You know the sort of thing.

1 Borrow the money to pay the farmers 40 to 50% for the rice than the open market price.

2 Borrow the money to pay the rice millers and storage at above market rates.

3 Sell the rice at 150 to 200% of the international market rates and put the money back into the revolving fund.

4 Borrow more money to pay the farmers to keep them happy.

5 Blame everybody else

Item 1 and 2 seemed to work but item 3 isn't quite going to plan so on to item 4.

Actually item 4 isn't working so on to item 5.

Actually item 5 isn't working too well either.

Oh well. What was Thaksins skype contact number again?

Heeeeeelllllllllllllllllppppppppppppppppppppppp

[phantomfiddler]

"Next week" risks becoming a political joke !

[gp2002]

Thailand.........the land of "next week, next week, next week "

[Scamper]

" Fifth, the due date for the return of the funds, May 31, is expected to be within the time frame of the current caretaker government, so the move is unlikely to place any obligations on the next government. "

This is an astonishing assumption. Just yesterday, two former members of the Supreme Court stated that the Yingluck administration ended yesterday after failing to have a parliamentary sitting. Under this current arrangement, the money needs to be paid back by the end of May. But Pheu Thai are no longer in a position of authority.

[rubl]

So, what are the criteria used to decide who get's payed (part) first?

BTW So the former MoF has come forward and stuck out his neck?

Edited March 5, 2014 by rubl