'Replace subsidy system with welfare system' - Thailand Research Development Institute

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'Replace subsidy system with welfare system'
KWANCHAI RUNGFAPAISARN
THE NATION

THE NATIONAL COUNCIL for Peace and Order should replace the country's subsidy system, including the rice-pledging policy, with a welfare system that would cover all people and the poor in particular, Nipon Poapongsakorn, a distinguished fellow at the Thailand Research Development Institute, said yesterday.

An administrative system should be set up to run the social welfare programme. The value-added-tax could be raised from 7 per cent to 10 per cent to finance it, he said.

Subsidies to support the former government's populist policies have been realised as dangerous and leading to possible political problems.

Government support for the prices of rice and other agricultural products will distort the market mechanism and require a huge budget. Not only poor farmers, but also everyone, including the rich, will get those subsidies from the government.

In the short term, to solve the rice problem, the NCPO should make a total accounting of the real quantity of rice being received under the rice-pledging scheme, and how much of that has been already sold. The accounting would include the real amount of rotting and missing rice.

"In my point of view, an independent body with professional members should be formed to evaluate all stocks to find out how much rice remains and its quality," he said.

The former government claimed 16 million-17 million tonnes of rice were still stored and such a massive amount caused the price to plunge.

However, if the real amount was only 10 million tonnes, the price would automatically go up.

"Thailand is one of the major rice exporters to the world, and we are not able to offer a higher price than the market. During government intervention, the rice price will get higher," he said.

"The former government released a colossal amount of rice from its stocks as it wanted to raise money to pay farmers for the rice-pledging scheme. That caused the price of rice to trend down since the middle of last year," he said.

The ousted government launched problem-making policies, and the money allocated for such subsidy policies should be limited. The rice price should be handled carefully to avoid further falls.

"I highly agree with the NCPO's order prohibiting government-to-government exports of rice. Rice should be sold through the futures exchange to support its retail price in the domestic market," he added.


-- The Nation 2014-06-05

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[Tatsujin]

The most sensible idea so far.

[ezzra]

Sure, very good idea, replace one dependency scheme with another...

what need to be done is to do away with the being depended on government's

hand out, loan, subsidies, give away and welfare money, stop the culture of tits

suckling by large groups of people who can vey well on their won but why should

they if the government give away money for free...

[Chang_paarp]

It would probably cost less than things like the rice scheme and if properly set up it would actually go to the right people rather than the rich middle men.

[ATF]

Posted Yesterday, 11:27

Most farmers won't and don't grow jasmine rice which is what the markets want. Jasmine gets a 50% premium over the cheap crap they grow and now they want the powers to be to guarantee them 10k baht per tonne when the market is 5k baht milled.

It would make more economic sense for Thailand to stop growing rice for a year or two and send all farmers to re-education camps where they can learn about real modern agricultural techniques and get paid on an attendance basis instead of the government wasting money on subsidies.

The price of rice would also rise in the meantime and the stockpiles depleted. Every country that subsidizes any industry ends up losing out.

This is a post I made yesterday in another rice thread. The last thing anyone needs is an excuse to sit around and do nothing.

[Chao Lao Beach]

The value-added-tax could be raised from 7 per cent to 10 per cent to finance it, he said.

The VAT, GST, what ever you want to call it impacts of low earners the most as a % of their income. Most low earners spend all their income, many times just surviving and all their small income is subject to this tax. This is not saying that the proposal doesn't have any credit though.

The rice scam scheme was all about an excuse to steel money via corruption foremost and secondly a kind of welfare, what about other Thias who grow other things or do other jobs. This maybe an answer.

[Thait Spot]

The most sensible idea so far.

I think it needs to be very carefully thought out and needs to be done in conjunction with agricultural policies so that the right crop is grown at the right location in the right quality with controls on pesticides and herbicides.

The UK social services, where for example, teenage women can have babies from several men and get paid a fortune by the state to support them is just plain crazy so a study of other countrys' failures should be done.

[ATF]

The value-added-tax could be raised from 7 per cent to 10 per cent to finance it, he said.

The VAT, GST, what ever you want to call it impacts of low earners the most as a % of their income. Most low earners spend all their income, many times just surviving and all their small income is subject to this tax. This is not saying that the proposal doesn't have any credit though.

The rice scam scheme was all about an excuse to steel money via corruption foremost and secondly a kind of welfare, what about other Thias who grow other things or do other jobs. This maybe an answer.

The reason Thai rice is subsided is:

1. It is a regulated product in the interests of National Security.

2. Farmers won't grow it for sale unless they are guaranteed a price. If they sell it at market price they just break even in a problem free year.

The whole system needs re-thinking.

[chainarong]

No , you need a system for the poor and another for the farmers , welfare for the poor by all means, but this mentality of hand outs can and has lead to abuse , so means testing etc is needed along with a study of other countries who have welfare systems with checks and balances in place and learn the pit falls of a welfare system, , the farmers need fertiliser rebates, lower utility, fuel costs, once again contact and study countries ,especially the US in what is required to help the farmers , don't ask Australia as they have no help for farmers and haven't done so for the last two decades, they don't get nothing from the governments except drought and flood assistance and then they have to beg. GO for it Thailand.

[patyh]

Wow.. That has got to be the worst suggestion ever..

If implemented improperly, people will just start to abuse the system.

[rametindallas]

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

[scorecard]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed, to create job opportunities in more areas / isolated areas. Perhaps give tax breaks to companies etc., which create jobs in more isolated areas.

All of the above should apply to all areas of the country.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

Edited June 5, 2014 by scorecard

[robblok]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed to create job opportunities. Perhaps give tax breaks to companies etc., which create jobs in more isolated.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

I agree, because if you create a poor class then anyone promising to raise to raise the benefits will get their votes and effectively buys votes. Kinda like the rice system.

Teach people to be self sufficient that is the best thing.

[Prbkk]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed to create job opportunities. Perhaps give tax breaks to companies etc., which create jobs in more isolated.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

I agree, because if you create a poor class then anyone promising to raise to raise the benefits will get their votes and effectively buys votes. Kinda like the rice system.

Teach people to be self sufficient that is the best thing.

Yes, providing there are checks, balances and protections built into the environment. We don't want a return to the unbridled greed of previous decades, most notably the 1990s during which there was a system in place to profit the 'elite' ( self-defined, anything but elite by any reasonable definition)at the expense of ordinary Thais.

[scorecard]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed to create job opportunities. Perhaps give tax breaks to companies etc., which create jobs in more isolated.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

I agree, because if you create a poor class then anyone promising to raise to raise the benefits will get their votes and effectively buys votes. Kinda like the rice system.

Teach people to be self sufficient that is the best thing.

Agree. And I suggest there's a wider point to be make - this is 2014, surely all governments should be well focused on policies, investments etc., which ultimately ensure that 99% of the population have a good quality of life through their own productivity.

This also brings self respect and self confidence, all very important.

[robblok]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed to create job opportunities. Perhaps give tax breaks to companies etc., which create jobs in more isolated.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

I agree, because if you create a poor class then anyone promising to raise to raise the benefits will get their votes and effectively buys votes. Kinda like the rice system.

Teach people to be self sufficient that is the best thing.

Yes, providing there are checks, balances and protections built into the environment. We don't want a return to the unbridled greed of previous decades, most notably the 1990s during which there was a system in place to profit the 'elite' ( self-defined, anything but elite by any reasonable definition)at the expense of ordinary Thais.

Can agree with that we don't want to make the real fat cats any fatter. I am just really against making people dependent on handouts. We see how wrong that went in our own countries. (there are people in the Netherlands that have never worked just benefits) That does not mean that everyone on benefits is lazy.. but benefits do create an environment for it.

Also and call me a capitalist I don't think that everyone should make the same money. People that are better at something should get more. If not why would you invest in yourself and study and do your best.

[robblok]

@Prbkk

Do you really think that there are people here on the anti government side of the posters (talking foreigners here) that want the real rich to exploit the poor. We are talking real real rich not companies trying to make a buck. I think most don't like the real rich exploiting anyone but most understand that income differences is normal and getting paid for your ideas and setting up a company is normal. Getting some money because you invested in your education or because your just smarter / better at something is normal. At least it is in my book.

[Prbkk]

@Prbkk

Do you really think that there are people here on the anti government side of the posters (talking foreigners here) that want the real rich to exploit the poor. We are talking real real rich not companies trying to make a buck. I think most don't like the real rich exploiting anyone but most understand that income differences is normal and getting paid for your ideas and setting up a company is normal. Getting some money because you invested in your education or because your just smarter / better at something is normal. At least it is in my book.

No, I don't believe posters here are promoting exploitation. However there is significant irony in the fact that some of the protest leaders have been recipients of unearned income resulting from the unbridled corruption and monopolistic practices of the past 30 years. Crony capitalism of Marcos proportions.

[robblok]

@Prbkk

Do you really think that there are people here on the anti government side of the posters (talking foreigners here) that want the real rich to exploit the poor. We are talking real real rich not companies trying to make a buck. I think most don't like the real rich exploiting anyone but most understand that income differences is normal and getting paid for your ideas and setting up a company is normal. Getting some money because you invested in your education or because your just smarter / better at something is normal. At least it is in my book.

No, I don't believe posters here are promoting exploitation. However there is significant irony in the fact that some of the protest leaders have been recipients of unearned income resulting from the unbridled corruption and monopolistic practices of the past 30 years. Crony capitalism of Marcos proportions.

I think the Taksin corruption was op epic proportions (whole PTP) having said that I am sure there are some on my side too.. Guess what Id love to see them get punished for that and their ill gains taken away just as much as I like to see that from corrupt officials on your side. I really don't care corruption is corruption and should be pursued and prosecuted.

Now a bit about Taksin (sorry) I don't understand why his other corruption cases were not tried in absentia and more of his money taken away if found guilty. The way it looks now is that a lot of it will be gone because of statute of limitation. There are some solid cases there. If I was in control Id make sure that the statute of limitation was lifted for all corruption cases.

[splodger]

A rise in VAT hits the poor,ask anyone from the U.K.Welfare good idea,but should include free education right through to university and student grants,this could easily paid for by taxing,middle and upper class who can easily absorb it.I'm not a socialist,just to let you know to save some people time before they start spouting !@#t.

[Ozziepat]

Welfare should be only for those few individuals unable to help themselves (not the many who would choose not to), only provide minimal essentials (not a comfortable lifestyle), only be granted for as long as absolutely necessary, and NOT incentivize unwanted behaviors (like multiple childbirths outside of marriage). Want to destroy Thai family culture and personal incentive? Make welfare (in any of its guises) easily and widely available. Done. Then sit back and enjoy the government created, government funded, government maintained ghetto formerly known as Thailand.

[HUAHIN62]

Worst possible sollution, they want to increase dependency instead of decreasing it. I would say increase the productivity of the farmers and their income will increase. Secondly improve education access and quality, this will enable people to get work outside of Agriculture. Approximately 40% of the Thai labor force is employed in Agriculture which is too high. Increase employment opportunities outside Agriculture, over time the number of people in Agriculture will decrease and incomes will increase.

[Thanet]

The most sensible idea so far.

Right - subsidies amount to fiscal suicide, in that they bet against uncontrollable and volatile global market forces, be they rice subsidies, fuel subsidies or whatever.

The cost of providing a welfare system is easier to predict, and targets segments of the population who need help the most.

Interesting that the Junta is copying the ruinous fiscal policies of the previous government.

[Thai at Heart]

Pay them to grow less, and reward them for growing better quality.

[thumper101]

Raise VAT by 3% and then distribute it back to the people who then have to spend it on the 3% price increases on everything, oh but that won't translate to 3% on the bottom line of all their purchases because VAT on fuel will rise and VAT on imports will rise so manufacturing and the general distribution chain incurs a 3% rise on many things, and so the price increases will be more in line with 6 or 7%.

So in the end, they will probably be worse off and so will the entire country with them..... great solution...... NOT!

[Emptyset]

They should replace the rice scheme with direct payments to farmers who earn under a certain amount a year. This would enable them to diversify their crops or get out of farming altogether and into a more productive area of the economy without the pressure of going under. There have been interesting trials in India on paying everyone in poorer rural areas a stipend which is at least enough to survive on. Contrary to what many would expect, people didn't just stop working and become dependents on government. In fact the rural economy grew and entrepreneurship increased, particularly amongst women. With direct payments, the money goes to the people who need it, rather than being siphoned off by civil servants, middlemen and politicians.

Aside from thinking about things like that, they should also have a social safety net which is available to all. But don't use VAT to pay for it as that hits the poor hardest. Increase wealth taxes or finally implement the land tax system which has been talked about for twenty years or something now...

[chainarong]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

I think the Taksin corruption was op epic proportions (whole PTP) having said that I am sure there are some on my side too.. Guess what Id love to see them get punished for that and their ill gains taken away just as much as I like to see that from corrupt officials on your side. I really don't care corruption is corruption and should be pursued and prosecuted.

@Prbkk

Do you really think that there are people here on the anti government side of the posters (talking foreigners here) that want the real rich to exploit the poor. We are talking real real rich not companies trying to make a buck. I think most don't like the real rich exploiting anyone but most understand that income differences is normal and getting paid for your ideas and setting up a company is normal. Getting some money because you invested in your education or because your just smarter / better at something is normal. At least it is in my book.

No, I don't believe posters here are promoting exploitation. However there is significant irony in the fact that some of the protest leaders have been recipients of unearned income resulting from the unbridled corruption and monopolistic practices of the past 30 years. Crony capitalism of Marcos proportions.

Now a bit about Taksin (sorry) I don't understand why his other corruption cases were not tried in absentia and more of his money taken away if found guilty. The way it looks now is that a lot of it will be gone because of statute of limitation. There are some solid cases there. If I was in control Id make sure that the statute of limitation was lifted for all corruption cases.

Same can be said about the UN dropping crimes against humanity against him ,because the corrupt ones (PTP) were back in control and the UN has no guts.

[kieran2698]

The answer will come from observing other countries systems. Take these three examples; Singapore, Brunei and Norway.

Singapore have a Westminster system of constitutional representation and they have the worlds highest GDP but they are not really regarded as one of the happiest countries. Looking at the 'Satisfaction with Life Index' they scored 53rd. They also have the largest gap between rich and poor in the world. They do not have a welfare system.

Brunei get 9th place with their dictatorship and mixture of common and sharia law. Their answer to happiness is wealth distribution as they try to create an egalitarian society and they have an excellent welfare system. What they overlook is social freedom.

Look at Norway with their moderate laws and even wealth distribution and their low crime and very high satisfaction ratings. Norway frequently comes in at first place for happiness and life satisfaction. The Nordic Model concentrates on creating social and economic equality. One of the ways they have done this is by taxing the rich heavily another is by offering very high benefits.

Singapore has good social equality, a high wealth disparity, no benefits and a medium level of satisfaction.

Brunei has terrible social inequality, a low wealth disparity, excellent benefits and a good level of satisfaction.

Norway has excellent social equality and a low wealth disparity, excellent benefits and an excellent level of satisfaction.

Economic equality is the most important factor but combine that with benefits and social equality and you have a recipe for success.

[scorecard]

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'Give a man a fish and you feed him for a day. Teach a man to fish and he feeds himself for a lifetime'.

Giving money for nothing is worse than communism as it robs people of their dignity. Welfare for the old and/or disabled if good but for able-bodied people should give to society for their money.

Set up trade schools in chronically low-employment areas and offer graduates low interest loans to go into business. Offer companies tax incentives to locate in those depressed areas based on how many they hire and what they pay. One doesn't have to be creative to just give money to those who don't have enough. Raising the VAT will hit the poor the hardest and is a stupid, cruel idea.

Agree, plus control where manufacturing is located, upgrade, make efficieny and subsidize transport if needed to create job opportunities. Perhaps give tax breaks to companies etc., which create jobs in more isolated.

All these ideas need further discussion but they are worth exploring.

Creating / maintaining a poor class is not the way to go, never.

Upgrade education as a key pillar.

I agree, because if you create a poor class then anyone promising to raise to raise the benefits will get their votes and effectively buys votes. Kinda like the rice system.

Teach people to be self sufficient that is the best thing.

Yes, providing there are checks, balances and protections built into the environment. We don't want a return to the unbridled greed of previous decades, most notably the 1990s during which there was a system in place to profit the 'elite' ( self-defined, anything but elite by any reasonable definition)at the expense of ordinary Thais.

Goes without saying and hopefully the reform process will look at this seriously.