Thai Cabinet agrees to buy 100,000 tons of rubber from farmers

[JAG]

I love the part about the government giving the 100,000 tons of newly acquired rubber to SME's, to turn into rubber products. I can just imagine all those 25 year old entrepreneurs, in the year 2016, whose dream is to innovate the production of rubber products. And the consumers, so happy to see new rubber items on the market that they never knew they needed before this prescient push by the government.

But I don't believe this SME thing is actually going to happen. Maybe a press conference with a few smiling innovators. All dutifully reported by NNT. And then the rubber will sit, stacked in warehouses, waiting for people to forget who put it there, and why.

Hate to say it; the "clown car" analogy is getting more appropriate.

Hey, " clown cars" - you can make them out of rubber can't you?

[chilli42]

BAD idea. The PM was right on this one. He should have stuck to his guns

[mancub]

Guess the rubber farmers in Krabi must be threatening to blockade the airport again. That would ensure their priority in the grand scheme of hand-outs.

[jayboy]

Quite right.This subsidy for farmers is not populism because it has been implemented by the good people who seized power by force.It's only populism when efforts to help the poorest are attempted by democratically elected Thaksin influenced governments, and naturally then the leaders can be put on trial and threatened with the confiscation of their assets.It's important to be clear about these things.

"...efforts to help the poorest..." ? Really? Why don't you talk about the rice scheme as it was, rather than regurgitating PTP election promise propaganda?

Don't let your prejudice get in the way of the facts.Whatever the shortcomings of the rice price support policy - and they were many both in concept and implementation - the intention was to support rice farmers.Certainly it was a political initiative designed to bolster PTP support - just as in the UK political parties support the NHS because it is electorally popular to do so.

If we try and analyse whether politicians are motivated by electoral ambition or fine feeling, or in what combination - we are setting ourselves an impossible task.

[elgordo38]

So who of their mates will the 100,000 tones come from, and what farmers will be involved in the discussion on price?

Sounds like the southern farmers will benefit mostly because they are making all the noise, us north eastern lot will probably get nothing and yet we are an increasingly bigger percentage of the market, especially as the southern plantations age.

In favor out of favor take your pick. We in the north are out of favor. Our esteemed leader states there is no money to help rubber farmers and then a U turn and now there is limited funding. Flip flopping? Follow the direction of the wind to blow up your sails. Take your pick.

[rubl]

Hmmm....asking for 60 baht subsidy when the price is 34 baht. That is a huge handout to farmers. And how many of these cabinet members own rubber plantations?

Asking but not getting that's the important thing.

your hero's are backtracking old fellow is this going to be a 'populist' policy? subsidising farmers? now where have we heard that before?

Who's hero?

Anyway this government is subsidising a little bit. Since they pay about 35 Baht a kilo (probably) with market price 34 Baht they have to be careful though. If things go wrong and prices up they might even make money on a subsidy.

Of course even if they lose all money on this new subsidy (probably max 3.5 billion Baht) that's still peanuts compared with the real 'self-financing scheme of the previous government. After paying 870 billion Baht to 1.4m rice farming households they lost 500++ billion.

[rubl]

Seems like the hideous monk is still owed some favors after his assistance in creating the excuse for the coup.

'the hideous monk'?

So we have a monk working in the rubber tree farming business?

Who would has guessed.

[MZurf]

Seems like the hideous monk is still owed some favors after his assistance in creating the excuse for the coup.

'the hideous monk'?

So we have a monk working in the rubber tree farming business?

Who would has guessed.

This will probably come as a surprise to you but you really don't need to guess if you follow the news and have access to internet.

[rubl]

So who of their mates will the 100,000 tones come from, and what farmers will be involved in the discussion on price?

Sounds like the southern farmers will benefit mostly because they are making all the noise, us north eastern lot will probably get nothing and yet we are an increasingly bigger percentage of the market, especially as the southern plantations age.

I understand that the NorthEast produces less than 25% of Thai rubber and in less quality than the rubber from down South. Something to do with water and maybe soil. With the current drought I wonder how those tress are doing up North?

No idea how the 100,000 tonnes will be bought, but it's just a token what with total production more than 4m tonnes. Also the fraction above market price with market price still very low will not make farmers real happy. 35 Baht per kilogram is way below the 90 Baht they got two, three years ago. Prices really went down.

At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?) . Furthermore the potential losses seem fairly limited and the scheme is not positioned as 'self-financing'.

"At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?)"

The "framework" proposed by DPM Prawit for the purchase of rubber at above market prices actually allows for the purchase of 200,000 tonnes with a budget of 12 Billion baht which comes from an "emergency" budget apparently.

Cue rubl "self financing" losses mantra - though I do wonder when "costs" of a scheme become "losses"? (and when 500 billion becomes 700 billion depending upon the latest "facts", for that matter)

Cue thelonius to skip that the cabinet approved only 100,000 tonnes at a fractional higer than market price. Market price now 34 Baht a kilo, I guestimate government pays 35 Baht as discussed previously.

Cue thelonius to mention a special budget whereas ministries are asked to offer some of their budget to make money available within the National Budget. Same like oil producing countries adjust their National Budgets to cover the oil price dive.

So, 100,000 tonnes of rubber stored temporarily, to be sold later. How long can rubber sheets be stored without deteriorating (too) much?

[rubl]

That article is over 2 years old when Yingluk was still in power.

No way is that reliable.

What we need is a follow up poll and see if it changed their lives in the long term and see how they are doing 2 years on.

No need for follow up poll as we all know what happen 2 years ago. A quarter of that time was occupied by the PDRC disruption of government functions and intimidation of banks. Rest of the 2 years was junta government. You can safely assumed that no farmers were happy since those events and many lives were changed and changing.

With Pheu Thai stating a few months ago that they paid out 870 billion Baht directly to 1.4m rice farmer families and even some rubber farmers got 90 Baht a kilo I have no doubt those farmers are unhappy the goose doesn't lay golden eggs any more. The tax payers still wonder about the 500++ billion Baht in losses though. How was that allowed to happen with a 'self-financing' scam?

So, 100,000 tonnes of rubber, less than 4 billion Baht, subsidy, although government gets the rubber. Maximum loss 4 billion Baht on a subsidy. Many vocal posters tried to assure me subsidies lose money.

What happened?

[Eric Loh]

I wonder if the loans have ever been paid back to the Ag Bank for the rice scheme, or whether the Ag Bank is still calling the rotten rice good collateral on its books.

This is so similar to the rice scheme. The government bought the rice believing they could control the market and drive the price up. But the world price kept falling and losses mounted until the rice just sat and rotted.

Yingluck is on trial for negligence for almost this same thing. Are these boys going to join in a cell next to hers?

There is a dissimilarity between the rice scheme and this rubber handout. Rice scheme you sell. Rubber scheme you force the state enterprises to use the rubber. And where the state enterprises gets the money? From the tax payers. The inflated rubber price that the enterprises buy will just added to the eventual price. Whether it is mattresses for the military or gloves for the hospital, it add to operation costs and again tax payers. It is a zero sum game.

You forgot the most interesting aspect of dissimilarity. THat's the 500++ billion Baht lost on a 'self-financing' rice scheme whereas this is costing probably 3.5 billion Baht with 100,00 tonnes of rubber stored. Also you seem a bit awkward in your 'rice you sell, rubber you force', especially with still 13m tonnes of rice in warehouses.

So, 100,000 tonnes of rubber to be temporarily stored. As I asked before, anyone who knows the detoriation rate of natural (probably uncured) rubber sheets?

The same elements that deteriorate rice and rubber, Rubi. Heat, humidity, insects, rottens etc.

You postively sure that the farmers will be satisfy with 100,00 tons procurement by the government and a slight price differentiation? Watch this space next few days.

The 13 tons rice will be sold. That's the job of the government and rice price has stabilized. Not rubber which he government bought for processing and sold to state enterprises. Obviously the increase raw material price will be passed on to the state enterprises funded by tax payers money.

[rubl]

Seems like the hideous monk is still owed some favors after his assistance in creating the excuse for the coup.

'the hideous monk'?

So we have a monk working in the rubber tree farming business?

Who would has guessed.

This will probably come as a surprise to you but you really don't need to guess if you follow the news and have access to internet.

Assuming you refer to phra Issara with your 'hideous monk' (as if labelling the monk in that way helps you), I only find references to a "President of the Thai Chamber of Commerce, Issara Wongkusonkit".

So, I would be grateful if you can point me to articles which clearly show phra Issara is in commercial business for his own profit and especially in relation to rubber. Thank you

[MZurf]

Seems like the hideous monk is still owed some favors after his assistance in creating the excuse for the coup.

'the hideous monk'?

So we have a monk working in the rubber tree farming business?

Who would has guessed.

This will probably come as a surprise to you but you really don't need to guess if you follow the news and have access to internet.

Assuming you refer to phra Issara with your 'hideous monk' (as if labelling the monk in that way helps you), I only find references to a "President of the Thai Chamber of Commerce, Issara Wongkusonkit".

So, I would be grateful if you can point me to articles which clearly show phra Issara is in commercial business for his own profit and especially in relation to rubber. Thank you

What has Suthep's business dealings (rubber or otherwise) got to do with anything?? If you want to know more about this unsavory character I suggest you start here (as well as having a look at the references at the bottom of the page):

https://en.wikipedia.org/wiki/Suthep_Thaugsuban

[rubl]

'the hideous monk'?

So we have a monk working in the rubber tree farming business?

Who would has guessed.

This will probably come as a surprise to you but you really don't need to guess if you follow the news and have access to internet.

Assuming you refer to phra Issara with your 'hideous monk' (as if labelling the monk in that way helps you), I only find references to a "President of the Thai Chamber of Commerce, Issara Wongkusonkit".

So, I would be grateful if you can point me to articles which clearly show phra Issara is in commercial business for his own profit and especially in relation to rubber. Thank you

What has Suthep's business dealings (rubber or otherwise) got to do with anything?? If you want to know more about this unsavory character I suggest you start here (as well as having a look at the references at the bottom of the page):

https://en.wikipedia.org/wiki/Suthep_Thaugsuban

Why didn't you say so in the first place rather than use that 'hideous monk' label. Suthep, well all know he's not the nicest chap around here, might even make Chalerm look angelic.

Anyway, 100,000 tonnes approved for this year, at fractional higher than market price which was 33.80 Baht for unsmoked sheets one or two days ago. The government will probably need to invest a wee bit more to have the sheets processed (making the processing industry and workers also happy) in order to make the sheets more durable and extend the life time.

[MZurf]

This will probably come as a surprise to you but you really don't need to guess if you follow the news and have access to internet.

Assuming you refer to phra Issara with your 'hideous monk' (as if labelling the monk in that way helps you), I only find references to a "President of the Thai Chamber of Commerce, Issara Wongkusonkit".

So, I would be grateful if you can point me to articles which clearly show phra Issara is in commercial business for his own profit and especially in relation to rubber. Thank you

What has Suthep's business dealings (rubber or otherwise) got to do with anything?? If you want to know more about this unsavory character I suggest you start here (as well as having a look at the references at the bottom of the page):

https://en.wikipedia.org/wiki/Suthep_Thaugsuban

Why didn't you say so in the first place rather than use that 'hideous monk' label. Suthep, well all know he's not the nicest chap around here, might even make Chalerm look angelic.

Anyway, 100,000 tonnes approved for this year, at fractional higher than market price which was 33.80 Baht for unsmoked sheets one or two days ago. The government will probably need to invest a wee bit more to have the sheets processed (making the processing industry and workers also happy) in order to make the sheets more durable and extend the life time.

"...might even make Chalerm look angelic."

Now that's a tall order!

[metisdead]

Off topic posts and replies about the rice pledging scheme have been removed.

[jgriff]

I love the last paragraph. The media? This is from a PM

[MickGC]

Isn't this the same thing as with the rice farmers but only with rubber????? When this fails who is going to take the blame for it?????

Mr T.

[blueyeshk]

Ok that didn't last long - the advantage was to stand firm- now rubber than rice and sugar Cain etc. will turn the good start into a nightmare for markets and country

[phoenixdoglover]

Back to the idea that the rubber buying will put upward pressure on the rubber market.

Thailand produce 4.3 million metric tons of natural rubber in 2014, and global production was about 12.1 million. So Thailand had a market share of 35.5%.

In 2014, Thailand stockpiled about 500,000 tons of rubber; this is equivalent to a one year supply for domestic uses.

Now there is a purchase of 100,000 tons expected to help with prices.

That purchase would be 0.8% of the annual global supply, and would add to the stockpile, increasing it from 500,000 to 600,000 tons.

In my opinion, this buying action alone could not possibly influence prices upward.

Also, with a purchase of only 100,000 tons, one is forced to ask, who will be the lucky "farmers" that will get bailed out soon? Considering the magnitude of the purchase, which is about 2.3% of Thailand's annual rubber output, only a select group of farmers could benefit from this program in a meaningful way.

All of which brings us back to the central question, "Why?" Or maybe, "Who?"

[LannaGuy]

Hmmm....asking for 60 baht subsidy when the price is 34 baht. That is a huge handout to farmers. And how many of these cabinet members own rubber plantations?

Asking but not getting that's the important thing.

your hero's are backtracking old fellow is this going to be a 'populist' policy? subsidising farmers? now where have we heard that before?

Who's hero?

Anyway this government is subsidising a little bit. Since they pay about 35 Baht a kilo (probably) with market price 34 Baht they have to be careful though. If things go wrong and prices up they might even make money on a subsidy.

Of course even if they lose all money on this new subsidy (probably max 3.5 billion Baht) that's still peanuts compared with the real 'self-financing scheme of the previous government. After paying 870 billion Baht to 1.4m rice farming households they lost 500++ billion.

ah "subsidising a little bit..." is ok then and you don't see any hypocrisy about the flagellation of the former PM over subsidy when she tried to help (it was a disaster we accept) the farmers? so now it's all about degree?

Policeman: did you kill him?

Rubl: "only a little bit Sir"

[Oziex1]

So are they just going to continue to produce an excess of rubber or are they going to reduce output?

[GOLDBUGGY]

Now they can make Rubber Bags to hold all that Warehouse Rice they have stored for years. The Rice might last longer this way.

[thelonius]

So who of their mates will the 100,000 tones come from, and what farmers will be involved in the discussion on price?

Sounds like the southern farmers will benefit mostly because they are making all the noise, us north eastern lot will probably get nothing and yet we are an increasingly bigger percentage of the market, especially as the southern plantations age.

I understand that the NorthEast produces less than 25% of Thai rubber and in less quality than the rubber from down South. Something to do with water and maybe soil. With the current drought I wonder how those tress are doing up North?

No idea how the 100,000 tonnes will be bought, but it's just a token what with total production more than 4m tonnes. Also the fraction above market price with market price still very low will not make farmers real happy. 35 Baht per kilogram is way below the 90 Baht they got two, three years ago. Prices really went down.

At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?) . Furthermore the potential losses seem fairly limited and the scheme is not positioned as 'self-financing'.

"At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?)"

The "framework" proposed by DPM Prawit for the purchase of rubber at above market prices actually allows for the purchase of 200,000 tonnes with a budget of 12 Billion baht which comes from an "emergency" budget apparently.

Cue rubl "self financing" losses mantra - though I do wonder when "costs" of a scheme become "losses"? (and when 500 billion becomes 700 billion depending upon the latest "facts", for that matter)

Cue thelonius to skip that the cabinet approved only 100,000 tonnes at a fractional higer than market price. Market price now 34 Baht a kilo, I guestimate government pays 35 Baht as discussed previously.

Cue thelonius to mention a special budget whereas ministries are asked to offer some of their budget to make money available within the National Budget. Same like oil producing countries adjust their National Budgets to cover the oil price dive.

So, 100,000 tonnes of rubber stored temporarily, to be sold later. How long can rubber sheets be stored without deteriorating (too) much?

"Market price now 34 Baht a kilo, I guestimate government pays 35 Baht as discussed previously".

and yet just over 12 hours later we have the "Government" setting the "limit" (for now) at 45 baht a kilogram, watch this space.

Anyway, we have the "Government" caving in to the rubber farmers despite assurances to the contrary, using taxpayers money in populist schemes despite assurances to the contrary, appointing a General to head up the National Rubber Committee, a clear case of nepotism, despite assurances to the contrary and rubl doing his utmost to spin and back up the military regime at every opportunity - NO assurances to the contrary there.

[sebastion]

Make rubber cars and in turn the road deaths in Thailand will lower dramatically.

It's a win win situation.

[rubl]

Asking but not getting that's the important thing.

your hero's are backtracking old fellow is this going to be a 'populist' policy? subsidising farmers? now where have we heard that before?

Who's hero?

Anyway this government is subsidising a little bit. Since they pay about 35 Baht a kilo (probably) with market price 34 Baht they have to be careful though. If things go wrong and prices up they might even make money on a subsidy.

Of course even if they lose all money on this new subsidy (probably max 3.5 billion Baht) that's still peanuts compared with the real 'self-financing scheme of the previous government. After paying 870 billion Baht to 1.4m rice farming households they lost 500++ billion.

ah "subsidising a little bit..." is ok then and you don't see any hypocrisy about the flagellation of the former PM over subsidy when she tried to help (it was a disaster we accept) the farmers? so now it's all about degree?

Policeman: did you kill him?

Rubl: "only a little bit Sir"

Ms. Yingluck 'tried' to help with a 'self-financing' scheme which paid out 870 billion Baht to 1.4m rice farming households and managed to lose 500++ billion Baht.

As least we agree that there is no fundamental reason against properly managed subsidies, properly reserved in the National Budget, properly accounted for, properly audited, etc., etc.

[rubl]

I understand that the NorthEast produces less than 25% of Thai rubber and in less quality than the rubber from down South. Something to do with water and maybe soil. With the current drought I wonder how those tress are doing up North?

No idea how the 100,000 tonnes will be bought, but it's just a token what with total production more than 4m tonnes. Also the fraction above market price with market price still very low will not make farmers real happy. 35 Baht per kilogram is way below the 90 Baht they got two, three years ago. Prices really went down.

At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?) . Furthermore the potential losses seem fairly limited and the scheme is not positioned as 'self-financing'.

"At least 100,000 tonnes at 35 Baht/kg is only 3.5 billion Baht (assuming there are 1000kg in a tonnes?)"

The "framework" proposed by DPM Prawit for the purchase of rubber at above market prices actually allows for the purchase of 200,000 tonnes with a budget of 12 Billion baht which comes from an "emergency" budget apparently.

Cue rubl "self financing" losses mantra - though I do wonder when "costs" of a scheme become "losses"? (and when 500 billion becomes 700 billion depending upon the latest "facts", for that matter)

Cue thelonius to skip that the cabinet approved only 100,000 tonnes at a fractional higer than market price. Market price now 34 Baht a kilo, I guestimate government pays 35 Baht as discussed previously.

Cue thelonius to mention a special budget whereas ministries are asked to offer some of their budget to make money available within the National Budget. Same like oil producing countries adjust their National Budgets to cover the oil price dive.

So, 100,000 tonnes of rubber stored temporarily, to be sold later. How long can rubber sheets be stored without deteriorating (too) much?

"Market price now 34 Baht a kilo, I guestimate government pays 35 Baht as discussed previously".

and yet just over 12 hours later we have the "Government" setting the "limit" (for now) at 45 baht a kilogram, watch this space.

Anyway, we have the "Government" caving in to the rubber farmers despite assurances to the contrary, using taxpayers money in populist schemes despite assurances to the contrary, appointing a General to head up the National Rubber Committee, a clear case of nepotism, despite assurances to the contrary and rubl doing his utmost to spin and back up the military regime at every opportunity - NO assurances to the contrary there.

Have been busy and didn't read news yet. So yes, things may have changed.

As for the rest of your post, just so much blabla. At last the same posters here have been telling me for a year or more that there is nothing wrong with subsidies and that subsidies can lose money.

[LannaGuy]

Rubl: "only a little bit Sir"

Ms. Yingluck 'tried' to help with a 'self-financing' scheme which paid out 870 billion Baht to 1.4m rice farming households and managed to lose 500++ billion Baht.

As least we agree that there is no fundamental reason against properly managed subsidies, properly reserved in the National Budget, properly accounted for, properly audited, etc., etc.

I am not against subsidy, when necessary, as it is a part of good governance but i don't believe your figures from the Junta 'spin machine' and would like an independant verification (never going to happen). Why not take the new Junta's spokesman's advice and let it be in the 'past'?

The government did a terrible job with the Rice Scheme but it was mismanagement not corruption and if governments were all hounded for THAT no one would ever stand for election (remember those?) and there are not enough jail's in the world to put them all in! it's politics not justice

[rubl]

Rubl: "only a little bit Sir"

Ms. Yingluck 'tried' to help with a 'self-financing' scheme which paid out 870 billion Baht to 1.4m rice farming households and managed to lose 500++ billion Baht.

As least we agree that there is no fundamental reason against properly managed subsidies, properly reserved in the National Budget, properly accounted for, properly audited, etc., etc.

I am not against subsidy, when necessary, as it is a part of good governance but i don't believe your figures from the Junta 'spin machine' and would like an independant verification (never going to happen). Why not take the new Junta's spokesman's advice and let it be in the 'past'?

The government did a terrible job with the Rice Scheme but it was mismanagement not corruption and if governments were all hounded for THAT no one would ever stand for election (remember those?) and there are not enough jail's in the world to put them all in! it's politics not justice

Ah, you still seem under the misconception that Ms. Yingluck had a subsidy whereas it was a wonderful 'self-financing' scheme. As for mismanagement, well Ms. Yingluck get's her chance in court, to explain all about it. I only hope she'll be a bit more consistent in her statements than some posters here.

As for the current government, they just agreed to but 100,000 tonnes of rubber sheets at 45 B/kg making for a total of 4.5 billion Baht. To be paid out directly to farmers and cooperatives. Just like Pheu Thai paid out 870 billion Baht directly to the 1.4 million rice farming families who participated in the RPPS (out of 3.7m eligible).