It's self financing until the banks decided not to extend loans. Thought we clear on this. The payment to farmers are done by BACC through loans from various financial institutions until they were intimidated by the PDRC mob visits. The farmers were the victims falling to political gamesmanship and held hostage by the banks scared stiff to lend.

Ask yourself why a self-financing scheme is hundreds of billions of baht in debt and needs further loans.

It is a pay and sell scheme. You pay the farmers first and sell subsequently. There will always be a gap whereby loans are needed. Common in the business world. What's so hard to understand.

As I understand things if you buy low and sell high you make a profit which enables your business to expand.

If you buy high and sell low you make a loss and eventually your business will crash and you will be bankrupt.

If you buy high, sell low and borrow money to pay for your losses and still cannot make a profit then your debt will be higher and you will go bust quicker and owe more money.

That is a real world scenario.

Now what Eric says is that you buy your rice first at a a high price, store it until you can sell it at a higher price and then make a profit.

The bit that confuses me is having borrowed all that money (and paying interest on it) what happens when you can only sell it at a low price which doesn't cover the cost of buying the rice in the beginning, paying for the loans plus interest, plus storage.

You then end up with not enough money to pay your bills and break even. Where I come from that is called a loss and no company or business can run at a loss for long without going bust.

I haven't bothered to add into the cost that unless the product is stored correctly it will deteriorate and be worth less when you try to sell it, nor the cost of transport which unless the customers pays for it becomes another loss to your company, nor the natural wastage, corruption etc.

In the end I don't understand why buying high, borrowing money to pay your bills and selling at a loss is a good thing. I am sure that Eric will come along with a perfectly plausible explanation which we will all be asked to accept as gospel.

I was explaining the mechanics of the pay and sell system and not the operating performance. There is a political attrition going on in the last decade and this trial is another manifestation of effort to weaken the popular side. Previous rice schemes and current rubber subsidies lost money by pledging higher prices and none went on trial. The multiplier economic benefits like an additional of revenue collected annually are conveniently not discussed. Recent investigating panel concluded that farmers indeed benefitted from the scheme. The junta makes no bone that they are after a particular group and really make obvious the trial agenda.

I was explaining the mechanics of the pay and sell system and not the operating performance. There is a political attrition going on in the last decade and this trial is another manifestation of effort to weaken the popular side. Previous rice schemes and current rubber subsidies lost money by pledging higher prices and none went on trial. The multiplier economic benefits like an additional of revenue collected annually are conveniently not discussed. Recent investigating panel concluded that farmers indeed benefitted from the scheme. The junta makes no bone that they are after a particular group and really make obvious the trial agenda.

This was not a subsidy. Subsidies have to budgeted for. Introducing a subsidy involves showing where the money will be coming from and how you are going to pay for it, and what the benefits will be. This wasn't a subsidy, and as such could not be scrutinized or challenged. This was a self-financing project. From the very early stages it became very obvious that this project would not finance itself, but instead would involve considerable losses. At that point all the chairperson of the committee had to do was announce that it was not working as intended and that it would be scrapped or heavily revised. She didn't do that and why?, because her brother who was the brainchild of the idea prided himself on being some sort of a business god, who could do financial miracles with anything. His reputation was on the line and that came before everything else.

As with regards farmers benefiting, firstly, that investigating panel was set up by the junta and i thought their word meant nothing to you. Now suddenly it does? How convenient. Secondly, it only said that some farmers benefited. Considering the amount of money lost of course there had to be a few who benefited, but did enough farmers benefit sufficiently to make it come anywhere close to having been worthwhile. Of course not. They would have benefited far more farmers to a far greater degree simply by saying, "here you are, here are billions of baht of public money, share it out between yourselves"... but of course to have done that would not have provided the same corruption opportunities.

I'm just saying that Ms. Yingluck's RPPS was positioned as 'self-financing' with her then Minister of Commerce Kittirat stating a day before the 'scheme' started that only a 'revolving fund' of 430 billion Baht was required to make initial payments and money would come back from rice sold.

The scheme was allowed to run up massive losses, losses predicted before, losses pointed out, but denied, ridiculed, slowly acknowledge as 'minimal', etc., etc. There seems to be a case of 'negligence'.

Of course Ms. Yingluck gets her chance to explain all in court. Justice will prevail.

So the self-financing is a sell and pay scheme while the subsidy is straight tax payer lost. Seem the former is a much accountable scheme until the government was not allowed to borrow due to the EC rejecting 130 B Bt loan to help finance the scheme. Soon after, other banks stop extending loan due to PDRC intimidation. Just how much will be the eventual loss is still unknown. The self-financing scheme does have its merits.

Absolutely, a 'self-financing' scheme has it's merits especially when it's self-financing. When it goes wrong to the tune of 500++ billion Baht it's a criminal disaster.

The rest is just the usual distraction ignoring what a caretaker government is not able to do legally anymore. Ignoring the fact that Ms. Yingluck had stated that the 2013/2014 financing was secured. Ignoring as usual all that's inconvenient.

It's self financing until the banks decided not to extend loans. Thought we clear on this. The payment to farmers are done by BACC through loans from various financial institutions until they were intimidated by the PDRC mob visits. The farmers were the victims falling to political gamesmanship and held hostage by the banks scared stiff to lend.

And again, and again, and again your less than truthful, but that's seems to be par for the course for you and your ilk on this subject.

You deliberately / conveniently ignore / don't mention that various laws and regulations (all there for good reasons) prevented the banks from loaning.

In one case (no doubt you have conveniently forgotten and hoping everybody else will have forgotten) they tried to demand the government savings bank give deposits funds to the government to pay the farmers. The depositors yelled very loudly in fear that the bank would collapse and ensured their funds were not used for this purpose.

I'm sorry but it's you that are being less than truthful.Whether deliberately or through ignorance is not for me to speculate.

In summary you are denying that there was no very heavy political pressure (from the non elected elements bitterly hostile to the Yingluck Government) on lending institutions to halt payments.To maintain that position is dishonest.

I am incidentally very familiar with the GSB and your comments are woefully in error with regard to that institution.

Please do not lecture others on the need for honesty when your own posts are so manifestly riddled with lies.

What lies?

As I understand things if you buy low and sell high you make a profit which enables your business to expand.

If you buy high and sell low you make a loss and eventually your business will crash and you will be bankrupt.

If you buy high, sell low and borrow money to pay for your losses and still cannot make a profit then your debt will be higher and you will go bust quicker and owe more money.

That is a real world scenario.

Now what Eric says is that you buy your rice first at a a high price, store it until you can sell it at a higher price and then make a profit.

The bit that confuses me is having borrowed all that money (and paying interest on it) what happens when you can only sell it at a low price which doesn't cover the cost of buying the rice in the beginning, paying for the loans plus interest, plus storage.

You then end up with not enough money to pay your bills and break even. Where I come from that is called a loss and no company or business can run at a loss for long without going bust.

I haven't bothered to add into the cost that unless the product is stored correctly it will deteriorate and be worth less when you try to sell it, nor the cost of transport which unless the customers pays for it becomes another loss to your company, nor the natural wastage, corruption etc.

In the end I don't understand why buying high, borrowing money to pay your bills and selling at a loss is a good thing. I am sure that Eric will come along with a perfectly plausible explanation which we will all be asked to accept as gospel.

I was explaining the mechanics of the pay and sell system and not the operating performance. There is a political attrition going on in the last decade and this trial is another manifestation of effort to weaken the popular side. Previous rice schemes and current rubber subsidies lost money by pledging higher prices and none went on trial. The multiplier economic benefits like an additional of revenue collected annually are conveniently not discussed. Recent investigating panel concluded that farmers indeed benefitted from the scheme. The junta makes no bone that they are after a particular group and really make obvious the trial agenda.

I chopped a lump from the earlier post to make it fit. Sorry if it seems out of context..

I can understand the mechanics of the pay and sell system but thank you for your explanation.

I just can't understand how Yingluck et al believed that it would work to any degree without incurring large losses.

IMHO they would have saved money by not buying the rice in the first place and giving the rice farmers perhaps 250,000 baht per rai up to 10 rai and a smaller amount per rai from 10 to say 25 rai and nothing beyond that amount of land. After that they could have told the rice farmers that there would be no more subsidies, soft loans, support etc and that the farmers could sell their rice to who they wanted at whatever price they could get.

Smart farmers would have paid their debts and the not so smart ones would have spent it on other things but there would be no more money available. I don't think it would have worked but what they did do didn't work either. Ain't hindsight a wonderful thing.

As I understand things if you buy low and sell high you make a profit which enables your business to expand.

If you buy high and sell low you make a loss and eventually your business will crash and you will be bankrupt.

If you buy high, sell low and borrow money to pay for your losses and still cannot make a profit then your debt will be higher and you will go bust quicker and owe more money.

That is a real world scenario.

Now what Eric says is that you buy your rice first at a a high price, store it until you can sell it at a higher price and then make a profit.

The bit that confuses me is having borrowed all that money (and paying interest on it) what happens when you can only sell it at a low price which doesn't cover the cost of buying the rice in the beginning, paying for the loans plus interest, plus storage.

You then end up with not enough money to pay your bills and break even. Where I come from that is called a loss and no company or business can run at a loss for long without going bust.

I haven't bothered to add into the cost that unless the product is stored correctly it will deteriorate and be worth less when you try to sell it, nor the cost of transport which unless the customers pays for it becomes another loss to your company, nor the natural wastage, corruption etc.

In the end I don't understand why buying high, borrowing money to pay your bills and selling at a loss is a good thing. I am sure that Eric will come along with a perfectly plausible explanation which we will all be asked to accept as gospel.

I was explaining the mechanics of the pay and sell system and not the operating performance. There is a political attrition going on in the last decade and this trial is another manifestation of effort to weaken the popular side. Previous rice schemes and current rubber subsidies lost money by pledging higher prices and none went on trial. The multiplier economic benefits like an additional of revenue collected annually are conveniently not discussed. Recent investigating panel concluded that farmers indeed benefitted from the scheme. The junta makes no bone that they are after a particular group and really make obvious the trial agenda.

I chopped a lump from the earlier post to make it fit. Sorry if it seems out of context..

I can understand the mechanics of the pay and sell system but thank you for your explanation.

I just can't understand how Yingluck et al believed that it would work to any degree without incurring large losses.

IMHO they would have saved money by not buying the rice in the first place and giving the rice farmers perhaps 250,000 baht per rai up to 10 rai and a smaller amount per rai from 10 to say 25 rai and nothing beyond that amount of land. After that they could have told the rice farmers that there would be no more subsidies, soft loans, support etc and that the farmers could sell their rice to who they wanted at whatever price they could get.

Smart farmers would have paid their debts and the not so smart ones would have spent it on other things but there would be no more money available. I don't think it would have worked but what they did do didn't work either. Ain't hindsight a wonderful thing.

I don't think that the scheme aimed to fail. The food crisis in the 08/09 years and the rocketing rice price increase plus the fact that India and Vietnam imposed rice export due to food security may have contributed to the policy decision. The PT government didnt expect that the scheme will be such a gargantuan undertaking and became too hard to manage. Once started, the scheme will be difficult to stop without causing the wrath of his voters. Remember they try to lower the pledge price to 14,000 Bt and meet a wave of resistance.

Hindsight is indeed a wonderful thing. Looking back to easy to condemn the scheme. Things will be quite different if the India and Vietnam didn't have bumper crop and prices eroded.

Yes it was an election pledge aimed to win votes. Not exclusive and others have done the same. There is also no precedent in past governments to be indicted for such policy.