NCPO must focus on Thai rice stocks

[EricBerg]

How was the paper work lost in the 2011 floods.....the scheme had not got under way before the floods happened....... are you just stirring the pot or trying to protect the former govt????

The Abhisit government (!) had a rice scheme in 2009-2010. After reports about irregularities NACC started to investigate. In 2011 they were told by officials of government agencies that much of the requested paperwork could not be produced coz of damage during the floods.

NACC ever since then kept investigating reported irregularities which eventually resulted in charging Yingluck. Vanished documents seem to be a red thread through the whole rice pledging story. Rather strange perhaps because there's an aweful lot of money involved. Or perhaps less strange?

[robblok]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill besides you backing a rice scheme that now everyone with half a brain knows destroyed the farmers. Well done Shins, the farmers will have absolutely no money for a while and are off worse as before the rice scam.

You don't seem to realize that these are loans towards the government so a lower percentage is good. It is these loans that are used to pay your farmers for a program so royally screwed up by your side.

So maybe we should call you bill not so smart.

This has nothing to do with loaning to others.. its the government taking getting loans to pay of the farmers and to pay for the enormous losses from the rice project.

Could you please tell me your reasoning of your post ?

robblok, I don't disagree that the results of the Rice Scheme has hurt the farmers, but I don't believe that should be blamed on the program. The blame should be placed on the way the program was administered and the political impasse that led to the dissolution of the government and the loss of control over the ability to pay the farmers in timely manner and not the program itself. Governments subsidize interest groups, industries and all manner of enterprises all the time; and farming subsidies are prevalent in most Western countries. It's a good way to redistribute wealth from the urban to the rural areas. I hope whatever government is in charge in Thailand will continue to provide some kind of subsidies to farmers and other rural citizens.

These loans at whatever interest rates create national debt. This debt is covered by future tax revenues or bonds. If the government is loaning money at interest rates below the bond rate it is creating deficit and eventual national debt. The short term beneficiaries of these loans will be the farmers, but the long term beneficiaries will be the financiers who will buy the debt with future bond issuances. It's moving money from one pocket to the another which in an of itself is not a bad thing. The question is in who's pocket will the money eventually end up - and I say the financiers; and how much money will disappear during the moving around - corruption.

The program in itself was fundamentally flawed. So I cant agree with you there.

A subsidy based on how much land with a maximum would not have disrupted the rice prices would not have led to a hike in fertilizer prices. Every organisation told them this before. You still defend it even when you see the result. So it is wrong.

How is loaning money BELOW the bond rate a problem ? If it was above the BOND rate it would be smarter to issue bonds. I don't get your point here but it might be a language issue.

[rubl]

The whole rice thing turned out to be a financial.disaster. Get it behind us, take the losses and move on. Good thing the farmers are finally getting paid.

Is the NCPO conducting any sort of in depth stock take as over the years the figures have been all over the place so does anyone have even a decent guesstimate on what's actually in storage, what has gone ' missing ' etc. ?

Ask rubl. He has the facts at his fingertips, apparently.

Well, thank you for your kind words. Unfortunately you're wrong.

Like you I'm still waiting for even a single A4 page 'detailing' how successful this scam was for some.

[billsmart]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill are you really that out of touch to recognise the difference between a rice scam that was exactly that and defrauded all members of Thai society including the rice farmers? It bears absolutely no comparisons to the government-backed loans at lower-than-market interest rates which are compensating the farmers for their losses. The big winners here are Thaksin and his sycophants, the looser are the Thai people who will foot the bill, its not so smart.

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

[robblok]

@billsmart

I do wonder why we should help farmers and pay for it. They choose to be farmer and they choose to plant rice. Why should others foot the bill for an uneconomical decision. If it is shown that Thailand can't compete on the rice market, why would the salary workers pay for this ? They are just middle class not making that much they have higher cost too as farmers. If farmers stick to doing stuff that does not make economical sens why would others foot the bill.

I would understand a period of footing the bill urging them to do something else and slowly decreasing the money they get if they insist on doing something that has no economical sense.

I am in general against supporting farmers in any country. If i choose to become a cop (not in Thailand) and I know that means not much salary but i like doing it. Should i complain and get more money or was it my choice to do this in the first place. If i drop out of school and start working in a supermarket behind a cash register am I entitled to more money because of my poor choices ?

[billsmart]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill besides you backing a rice scheme that now everyone with half a brain knows destroyed the farmers. Well done Shins, the farmers will have absolutely no money for a while and are off worse as before the rice scam.

You don't seem to realize that these are loans towards the government so a lower percentage is good. It is these loans that are used to pay your farmers for a program so royally screwed up by your side.

So maybe we should call you bill not so smart.

This has nothing to do with loaning to others.. its the government taking getting loans to pay of the farmers and to pay for the enormous losses from the rice project.

Could you please tell me your reasoning of your post ?

robblok, I don't disagree that the results of the Rice Scheme has hurt the farmers, but I don't believe that should be blamed on the program. The blame should be placed on the way the program was administered and the political impasse that led to the dissolution of the government and the loss of control over the ability to pay the farmers in timely manner and not the program itself. Governments subsidize interest groups, industries and all manner of enterprises all the time; and farming subsidies are prevalent in most Western countries. It's a good way to redistribute wealth from the urban to the rural areas. I hope whatever government is in charge in Thailand will continue to provide some kind of subsidies to farmers and other rural citizens.

These loans at whatever interest rates create national debt. This debt is covered by future tax revenues or bonds. If the government is loaning money at interest rates below the bond rate it is creating deficit and eventual national debt. The short term beneficiaries of these loans will be the farmers, but the long term beneficiaries will be the financiers who will buy the debt with future bond issuances. It's moving money from one pocket to the another which in an of itself is not a bad thing. The question is in who's pocket will the money eventually end up - and I say the financiers; and how much money will disappear during the moving around - corruption.

The program in itself was fundamentally flawed. So I cant agree with you there.

A subsidy based on how much land with a maximum would not have disrupted the rice prices would not have led to a hike in fertilizer prices. Every organisation told them this before. You still defend it even when you see the result. So it is wrong.

How is loaning money BELOW the bond rate a problem ? If it was above the BOND rate it would be smarter to issue bonds. I don't get your point here but it might be a language issue.

I don't think the program was "fundamentally flawed". The fundamentals are the government was to act as a cooperative for the farmers: buy their rice at harvest time when the market price is low, store it and sell it domestically or overseas when the market price is higher. If there was a difference in the buying and selling price that produced a loss it would be made up from the general fund. That's the fundamentals. If in the case of the Rice Scheme the buying price was set too high, the handling of the rice was mismanaged and the selling price was overestimated that's not a problem with fundamentals. That's a problem with the configuration. The Rice Scheme could be revised with different numbers based on different projections and of course better management. I hope it or something like it will be offered.

I do defend it even though it turned out to be "wrong". It can be adjusted and reapplied. It's sorely needed in the rural areas. That need hasn't gone away.

Bonds will have to be issued sooner or later. That's how a debt is managed. If those bonds are issued at above then the rates the loans that they are meant to cover that just creates more deficit and eventual debt. Deficit and debt are not necessarily a bad thing, but my point is that it is the financiers that eventually benefit from that and not the average taxpayer or farmer.

I don't think our communication problem is a language issue (although from a few of your spellings I assume you're a Brit and I'm and American - "Two peoples separated by a common language" - Churchill ). I think it is a socially-focused philosophical issue.

Edited June 4, 2014 by billsmart

[Gunna]

The whole rice thing turned out to be a financial.disaster. Get it behind us, take the losses and move on. Good thing the farmers are finally getting paid.

Is the NCPO conducting any sort of in depth stock take as over the years the figures have been all over the place so does anyone have even a decent guesstimate on what's actually in storage, what has gone ' missing ' etc. ?

It seems much of the paperwork was lost in the floods. So even how much was paid to whom will be very difficult to find out...

How was the paper work lost in the 2011 floods.....the scheme had not got under way before the floods happened....... are you just stirring the pot or trying to protect the former govt????

My thoughts exactly

[NongKhaiKid]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill are you really that out of touch to recognise the difference between a rice scam that was exactly that and defrauded all members of Thai society including the rice farmers? It bears absolutely no comparisons to the government-backed loans at lower-than-market interest rates which are compensating the farmers for their losses. The big winners here are Thaksin and his sycophants, the looser are the Thai people who will foot the bill, its not so smart.

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

How did it benefit farmers to promise a guaranteed price for their rice and then fail to pay them ?

[robblok]

Bill besides you backing a rice scheme that now everyone with half a brain knows destroyed the farmers. Well done Shins, the farmers will have absolutely no money for a while and are off worse as before the rice scam.

You don't seem to realize that these are loans towards the government so a lower percentage is good. It is these loans that are used to pay your farmers for a program so royally screwed up by your side.

So maybe we should call you bill not so smart.

This has nothing to do with loaning to others.. its the government taking getting loans to pay of the farmers and to pay for the enormous losses from the rice project.

Could you please tell me your reasoning of your post ?

robblok, I don't disagree that the results of the Rice Scheme has hurt the farmers, but I don't believe that should be blamed on the program. The blame should be placed on the way the program was administered and the political impasse that led to the dissolution of the government and the loss of control over the ability to pay the farmers in timely manner and not the program itself. Governments subsidize interest groups, industries and all manner of enterprises all the time; and farming subsidies are prevalent in most Western countries. It's a good way to redistribute wealth from the urban to the rural areas. I hope whatever government is in charge in Thailand will continue to provide some kind of subsidies to farmers and other rural citizens.

These loans at whatever interest rates create national debt. This debt is covered by future tax revenues or bonds. If the government is loaning money at interest rates below the bond rate it is creating deficit and eventual national debt. The short term beneficiaries of these loans will be the farmers, but the long term beneficiaries will be the financiers who will buy the debt with future bond issuances. It's moving money from one pocket to the another which in an of itself is not a bad thing. The question is in who's pocket will the money eventually end up - and I say the financiers; and how much money will disappear during the moving around - corruption.

The program in itself was fundamentally flawed. So I cant agree with you there.

A subsidy based on how much land with a maximum would not have disrupted the rice prices would not have led to a hike in fertilizer prices. Every organisation told them this before. You still defend it even when you see the result. So it is wrong.

How is loaning money BELOW the bond rate a problem ? If it was above the BOND rate it would be smarter to issue bonds. I don't get your point here but it might be a language issue.

I don't think the program was "fundamentally flawed". The fundamentals are the government was to act as a cooperative for the farmers: buy their rice at harvest time when the market price is low, store it and sell it domestically or overseas when the market price is higher. If there was a difference in the buying and selling price that produced a loss it would be made up from the general fund. That's the fundamentals. If in the case of the Rice Scheme the buying price was set too high, the handling of the rice was mismanaged and the selling price was overestimated that's not a problem with fundamentals. That's a problem with the configuration. The Rice Scheme could be revised with different numbers based on different projections and of course better management. I hope it or something like it will be offered.

I do defend it even though it turned out to be "wrong". It can be adjusted and reapplied. It's sorely needed in the rural areas. That need hasn't gone away.

Bonds will have to be issued sooner or later. That's how a debt is managed. If those bonds are issued at above then the rates the loans that they are meant to cover that just creates more deficit and eventual debt. Deficit and debt are not necessarily a bad thing, but my point is that it is the financiers that eventually benefit from that and not the average taxpayer or farmer.

I don't think our communication problem is a language issue (although from a few of your spellings I assume you're a Brit and I'm and American - "Two peoples separated by a common language" - Churchill ). I think it is a socially-focused philosophical issue.

In my book, as an accountant by getting a cheap bridge loan under bond percentage means they are now paying less as if they had issued the bonds right away. So that is a good thing, unless the bonds go up later.

The financiers only benefit because of the cost of the scheme and the lack of fiscal discipline.

What you are saying is that they should have taken the losses faster and not stockpiling the rice. I agree there but the problem was they would then on paper overshoot their budget and could not defend it as they would create a too large a deficit for the fiscal year.

They did not want to do that because that would mean cutting cost somewhere else.

I still say its a bad scheme as the poorest farmers did not benefit. Plus it encouraged lower quality rice (quantity over quality) many farmers did not rotate their fields and such just to get more right and cash in.

And no I am Dutch so I thought I might have misread something.

[billsmart]

@billsmart

I do wonder why we should help farmers and pay for it. They choose to be farmer and they choose to plant rice. Why should others foot the bill for an uneconomical decision. If it is shown that Thailand can't compete on the rice market, why would the salary workers pay for this ? They are just middle class not making that much they have higher cost too as farmers. If farmers stick to doing stuff that does not make economical sens why would others foot the bill.

I would understand a period of footing the bill urging them to do something else and slowly decreasing the money they get if they insist on doing something that has no economical sense.

I am in general against supporting farmers in any country. If i choose to become a cop (not in Thailand) and I know that means not much salary but i like doing it. Should i complain and get more money or was it my choice to do this in the first place. If i drop out of school and start working in a supermarket behind a cash register am I entitled to more money because of my poor choices ?

roblock, See! I told you our disagreement was a socially-based philosophical one.

I'd feel more comfortable about your statement above it you also stated you are against all government programs which "interfere" with free markets - such as government-backed low interest loans; corporate tax-breaks, deferrals and exclusions; government investment in new industries, manipulation of tariffs to encourage/discourage international trade in some sectors. These IMO are all subsidies to capitalists. If you favor any of these I see no legitimate reason to object to subsidies for agriculture - especially the small farmer.

[robblok]

@billsmart

I do wonder why we should help farmers and pay for it. They choose to be farmer and they choose to plant rice. Why should others foot the bill for an uneconomical decision. If it is shown that Thailand can't compete on the rice market, why would the salary workers pay for this ? They are just middle class not making that much they have higher cost too as farmers. If farmers stick to doing stuff that does not make economical sens why would others foot the bill.

I would understand a period of footing the bill urging them to do something else and slowly decreasing the money they get if they insist on doing something that has no economical sense.

I am in general against supporting farmers in any country. If i choose to become a cop (not in Thailand) and I know that means not much salary but i like doing it. Should i complain and get more money or was it my choice to do this in the first place. If i drop out of school and start working in a supermarket behind a cash register am I entitled to more money because of my poor choices ?

roblock, See! I told you our disagreement was a socially-based philosophical one.

I'd feel more comfortable about your statement above it you also stated you are against all government programs which "interfere" with free markets - such as government-backed low interest loans; corporate tax-breaks, deferrals and exclusions; government investment in new industries, manipulation of tariffs to encourage/discourage international trade in some sectors. These IMO are all subsidies to capitalists. If you favor any of these I see no legitimate reason to object to subsidies for agriculture - especially the small farmer.

Not totally Bill, I am not against tax breaks and manipulation of tariffs and even helping farmers (if all these measures are meant to be short time, a few years to go to a more desirable situation)

For instance helping the farmers switch to either other crops.. or re-school them so they can do something else.

Tax breaks and manipulation of tariffs to get companies to go into a direction a government wants them to go or to get companies to settle here ect.

But for all situations in the end they need to be self sufficient, without the help.

[NeverSure]

Lessee. The former bank auditor in me is scratching its head. So many seem in favor of loans for the rice scheme. How about another scheme?

The banks that have been making these loans were first the BAAC which belongs to the government. The government runs them and the government has shrunk to just one. It became apparent in February that the BAAC had run out of loan money and most of its own capital funding the rice scheme. That's when the Government Savings Bank (GSB) loaned a few bil to the BAAC to help out and the employees and depositors started a major bank run which made world news.

Anyone else remember that news? On or about Feb. 18, 2014, the GSB had to quickly snatch that money back to save itself.

The GSB is also owned by the government and is run by the government which has recently shrunk to just one. It is the bank that has been buying the bonds to pay the farmers most recently.

Now we have government owned banks run by the government of one who suddenly can make loans to pay farmers when they couldn't even when Shin was Prime Minister. The BAAC had burned through 3/4 of its own capital and had turned to the GSB for money that the GSB didn't have.

I WANT TO KNOW SOMETHING. The government can, through its own banks loan money to itself which it recently didn't have.

HOW CAN I get in on this? I want to loan myself a few $bil that I don't have so that I too can benefit from this new math.

Anyone?

Crickets?

Edited June 4, 2014 by NeverSure

[billsmart]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill are you really that out of touch to recognise the difference between a rice scam that was exactly that and defrauded all members of Thai society including the rice farmers? It bears absolutely no comparisons to the government-backed loans at lower-than-market interest rates which are compensating the farmers for their losses. The big winners here are Thaksin and his sycophants, the looser are the Thai people who will foot the bill, its not so smart.

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

How did it benefit farmers to promise a guaranteed price for their rice and then fail to pay them ?

NongKhaiKid, The farmers benefited because they did get paid for past sales. This latest sale was the only one where there was a problem The farmers would have been paid 6 months ago if the former government hadn't dissolved itself under pressure from the opposition to hold new elections to re-legitimize mandate to rule. When the government was dissolved the Election Committee would not let the Caretaker Government acquire the funds to pay the farmers pending new elections. The opposition refused to take part in any new elections without some kind of reforms, ....and so on and so forth...until the military seized the government.

That's what I saw happening anyway. Did you see something different?

[Trembly]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Well the farmers have got to be paid and it wasn't the military government who started it . . .

[monkeycountry]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill are you really that out of touch to recognise the difference between a rice scam that was exactly that and defrauded all members of Thai society including the rice farmers? It bears absolutely no comparisons to the government-backed loans at lower-than-market interest rates which are compensating the farmers for their losses. The big winners here are Thaksin and his sycophants, the looser are the Thai people who will foot the bill, its not so smart.

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

Now that they are avake and want to be dealt with as equals, will they then also start paying income tax as equals, or will they continue to not bother even reporting their income - remember, many of them are, according to themselves, claiming several hundreds of thousands from the rice scam? Since you are in touch with the rural areas, then please tell me, how many Thais do you know in your rural area that has ever filed a tax return? I am guessing zero?

[monkeycountry]

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

How did it benefit farmers to promise a guaranteed price for their rice and then fail to pay them ?

NongKhaiKid, The farmers benefited because they did get paid for past sales. This latest sale was the only one where there was a problem The farmers would have been paid 6 months ago if the former government hadn't dissolved itself under pressure from the opposition to hold new elections to re-legitimize mandate to rule. When the government was dissolved the Election Committee would not let the Caretaker Government acquire the funds to pay the farmers pending new elections. The opposition refused to take part in any new elections without some kind of reforms, ....and so on and so forth...until the military seized the government.

That's what I saw happening anyway. Did you see something different?

According to the farmers themselves (their organisations), the payments to them stopped in September 2013. The protests against the PTP government started in November 2013. Did you see that happening too, or did you look the other way?

The question has been asked many times before and always without an answer, why did the PTP not pay between September and November?

[Artisi]

The whole rice thing turned out to be a financial.disaster. Get it behind us, take the losses and move on. Good thing the farmers are finally getting paid.

Is the NCPO conducting any sort of in depth stock take as over the years the figures have been all over the place so does anyone have even a decent guesstimate on what's actually in storage, what has gone ' missing ' etc. ?

It seems much of the paperwork was lost in the floods. So even how much was paid to whom will be very difficult to find out...

How was the paper work lost in the 2011 floods.....the scheme had not got under way before the floods happened....... are you just stirring the pot or trying to protect the former govt????

Duh! I think you might find that " lost in the floods" might just mean - deliberately destroyed, misplaced - like purposely lost, side-tracked, or removed from the system so no records exist.

[Artisi]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Well the farmers have got to be paid and it wasn't the military government who started it . . .

Correct, but they certainly sorted the problem quick smart, didn't they?

[monkeycountry]

I wish I had a business where I could just endlessly continue increasing the output of my product, even though the is no demand for it, and then force someone (the government) to buy all of it, not at market price, but at an inflated price.

Is there some reason this is limited to rice? Why not all farm products, or all products in general?

[cloudhopper]

Of course the GSB won the bid - they get all the money they need for free. All these "loans" are just money creation and will further increase the rate of price inflation. Just like workers in the US striking for $15 hourly minimum wage - they will never catch up to rising prices and in fact will always get further behind in purchasing power as the money base is devalued by QE.

[Trembly]

Of course the GSB won the bid - they get all the money they need for free. All these "loans" are just money creation and will further increase the rate of price inflation. Just like workers in the US striking for $15 hourly minimum wage - they will never catch up to rising prices and in fact will always get further behind in purchasing power as the money base is devalued by QE.

How do they get it for free?

[Thait Spot]

If anyone thinks that the NCPO has rice as it's number one issue then they are misguided.

They have done a superb job of sending the 2 warring sides home and stopping conflict so far.

Whilst they dismantle the Thaksin Network and replace it with people who can perform without allegiance - and whilst they clean up on weapons being held by factions - they are putting a reasonably independent "cabinet" in place.

The reconciliation so far has been tentative - like fighting school boys who have had their heads banged together and told to make up - but once the reasons for red and yellow get put down on paper and worked out I think things will calm down.

Then Reform is next on the agenda - and the whole nation is waiting to see what that will enatail because that will be the key to elections.

Rice and other farming issues such as rubber will be a background task. It wouldn't surprise me in the least to see some form of formal "farming landowners companies" formed with workers listed as employees and elligible for social services to bring their income up to the state minimum if their crops fail or the prices are low.

[Crushdepth]

I mentioned this in another thread yesterday, someone is going to have to make a brutal decision soon, as the rice stocks are not dwindling they're increasing, and nobody has killed the scheme, the farmers ARE going to have to halt their production, and if the scheme is dead, they have to go back to using the Millers, who know they can drop their buying price, simply because the supply outweighs the demand, it's economic suicide to continue subsidising the farmers, whilst unable to shift the current stock.

Some countries have been known to burn excess subsidised agricultural produce in order to avoid further impact on market price. Rather painful though.

[billsmart]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Bill are you really that out of touch to recognise the difference between a rice scam that was exactly that and defrauded all members of Thai society including the rice farmers? It bears absolutely no comparisons to the government-backed loans at lower-than-market interest rates which are compensating the farmers for their losses. The big winners here are Thaksin and his sycophants, the looser are the Thai people who will foot the bill, its not so smart.

I believe I am in touch with the rural areas. I live in a rural area and see the Rice Scheme did not defraud the farmers. I see what benefits the Rice Scheme and other programs sponsored by the former governments (roads, dams, hospitals, schools, electricity, water, etc...) has had on the rural areas including local farmers. Is there any wonder why there would be such overwhelming support for these former governments by the rural areas?

Maybe I am out of touch with the urban areas where it seems there is a huge influx of wealth accompanied as usual with graft and corruption. And is there any wonder why the urban areas would oppose former governments who redistributed wealth out to other areas of the country and through the vote also began to redistribute the political power?

The Thai people will indeed foot the bill of this political divide, and will continue to pay and pay until it is resolved politically. I can only hope the current junta and the promised reforms leading up to a future election will help resolve these divides; but it's going to require a realization and an acceptance from the opposition of the former governments that the rural areas are now awake and must be dealt with at least as equals.

Now that they are avake and want to be dealt with as equals, will they then also start paying income tax as equals, or will they continue to not bother even reporting their income - remember, many of them are, according to themselves, claiming several hundreds of thousands from the rice scam? Since you are in touch with the rural areas, then please tell me, how many Thais do you know in your rural area that has ever filed a tax return? I am guessing zero?

MonkeyCountry, All rice farmers I know pay taxes on their land. If they don't it could be seized. They are not required to pay taxes on (or claim losses from) their income from the land from what I've been told. There may be some threshold on this. Maybe someone else on this forum could speak more authoritatively on that.

[billsmart]

If anyone thinks that the NCPO has rice as it's number one issue then they are misguided.

They have done a superb job of sending the 2 warring sides home and stopping conflict so far.

Whilst they dismantle the Thaksin Network and replace it with people who can perform without allegiance - and whilst they clean up on weapons being held by factions - they are putting a reasonably independent "cabinet" in place.

The reconciliation so far has been tentative - like fighting school boys who have had their heads banged together and told to make up - but once the reasons for red and yellow get put down on paper and worked out I think things will calm down.

Then Reform is next on the agenda - and the whole nation is waiting to see what that will enatail because that will be the key to elections.

Rice and other farming issues such as rubber will be a background task. It wouldn't surprise me in the least to see some form of formal "farming landowners companies" formed with workers listed as employees and elligible for social services to bring their income up to the state minimum if their crops fail or the prices are low.

I like your thoughts on what you call "farming landowners' companies". It sounds very much like farming "cooperatives" that we have in the USA, but they are not government sponsored but privately organized.

I'm wondering too about just what kind of "reforms" will be considered and enacted. Certainly there will be at least lip service to curtailing corruption and vote-buying. I hope the reforms focus on being inclusive - providing for and encouraging the maximum number of citizens to vote - rather than exclusive - limiting voter eligibility through qualifications and restrictions.

[billsmart]

From the article:

"The Government Savings Bank (GSB) yesterday came out top in an auction for a three-year loan worth Bt50 billion, offering the lowest interest rate among 12 participants from both government and commercial banks ... The lending rate offered by GSB is below the government's three-year bond yield of 2.45 per cent per annum currently," said Chularat."

I think it's important to point out that these government-backed loans at lower-than-market interest rates are absolutely no different in principle (pardon the pun) from government-backed purchases of rice at higher-than-market prices. Both are a form of subsidies to support government financial and social policies. The only difference is they are subsidies directly benefitting different segments of the Thai populations. The loans are of benefit to the financiers and the purchases to the farmers.

Well the farmers have got to be paid and it wasn't the military government who started it . . .

Correct, but they certainly sorted the problem quick smart, didn't they?

Of course they sorted it out quickly. They didn't have to get permission from anyone to do it...

[Thait Spot]

I mentioned this in another thread yesterday, someone is going to have to make a brutal decision soon, as the rice stocks are not dwindling they're increasing, and nobody has killed the scheme, the farmers ARE going to have to halt their production, and if the scheme is dead, they have to go back to using the Millers, who know they can drop their buying price, simply because the supply outweighs the demand, it's economic suicide to continue subsidising the farmers, whilst unable to shift the current stock.

Some countries have been known to burn excess subsidised agricultural produce in order to avoid further impact on market price. Rather painful though.

If they burn the missing 2.8M Tonnes that will be resolved without damage to the environment

Sent from my Nexus 4 using Thaivisa Connect Thailand mobile app

[billsmart]

I wish I had a business where I could just endlessly continue increasing the output of my product, even though the is no demand for it, and then force someone (the government) to buy all of it, not at market price, but at an inflated price.

Is there some reason this is limited to rice? Why not all farm products, or all products in general?

"A subsidy is a form of financial or in kind support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy." - Source: Wikipedia.com

Please note that subsidies are not just given to promote economic policies but social policies as well. An example would be the government support the programs for the arts, libraries, museums, parks, national wildlife refuges, etc... The preservation of small farmers is a social goal in many countries. It also can be supported by economic policy by discouraging monopolies and distributing production so there is more redundancy in the system.

Not everyone thinks a country should be run like a business and it's success measured by profit or loss and the growing wealth of capitalists. I am not alone in believing a country should be run like a family and it's success measured by the quality of life provided to all members of the family regardless of their abilities. IMO one of the responsibilities of a government of a country with even a partially-driven capitalistic economy is that of wealth redistribution. This is necessary to slow down and hopefully balance out the tendency in capitalistic system for the wealth to pool at the top. This is accomplished mainly through progressive tax rates and subsidies, especially subsidies that are targeted to specific vulnerable groups - like small-scale rice farmers.

Edited June 4, 2014 by billsmart

[rubl]

I wish I had a business where I could just endlessly continue increasing the output of my product, even though the is no demand for it, and then force someone (the government) to buy all of it, not at market price, but at an inflated price.

Is there some reason this is limited to rice? Why not all farm products, or all products in general?

"A subsidy is a form of financial or in kind support extended to an economic sector (or institution, business, or individual) generally with the aim of promoting economic and social policy." - Source: Wikipedia.com

Please note that subsidies are not just given to promote economic policies but social policies as well. An example would be the government support the programs for the arts, libraries, museums, parks, national wildlife refuges, etc... The preservation of small farmers is a social goal in many countries. It also can be supported by economic policy by discouraging monopolies and distributing production so there is more redundancy in the system.

Not everyone thinks a country should be run like a business and it's success measured by profit or loss and the growing wealth of capitalists. I am not alone in believing a country should be run like a family and it's success measured by the quality of life provided to all members of the family regardless of their abilities. IMO one of the responsibilities of a government of a country with even a partially-driven capitalistic economy is that of wealth redistribution. This is necessary to slow down and hopefully balance out the tendency in capitalistic system for the wealth to pool at the top. This is accomplished mainly through progressive tax rates and subsidies, especially subsidies that are targeted to specific vulnerable groups - like small-scale rice farmers.

Well the Yingluck RPPS was aimed at 'poor farmers' and meant to be profitable as scheme as well. That's why we are still left with poor farmers and with a possible government to BAAC debt of 700++ billion.

[Neurath]

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"White rice in Nonthaburi was quoted at Bt5,400-Bt5,600 a tonne, while production costs were at Bt6,000-Bt7,000 a tonne,"

So why would a sane person grow rice?

Because of (the promise of) transfer payments. Transfer payments which encourage the overproduction of rice - defined as rice production at a cost greater than the market price. It keeps the farmers in the debt of those who do the promising.