There are better ways to help the poor

[webfact]

EDITORIAL

There are better ways to help the poor

By The Nation

 

The corruption that tainted the rice-pledging scheme could be avoided in sounder benefit programmes
 

What are the other options to help low-income farmers, if not rice-pledging schemes?” That was a question raised at a seminar at Thammasat University last week.

 

The Supreme Court is today due to deliver its verdict on former premier Yingluck Shinawatra’s alleged negligence of official duty while implementing the biggest rice-pledging scheme in history during her years in office. According to public prosecutors, Yingluck’s alleged wrongdoing led to corruption and caused a massive financial damage to the state.

 

However, the Yingluck rice-pledging scheme  was widely popular among farmers, who benefited from a hugely generous programme in which they got as much as Bt15,000 per tonne for the rice they grew – nearly double the then-prevailing market price.

 

Nearly 20 million tonnes of rice went into warehouses leased by the government under the unlimited rice-pledging scheme. In the end, the government had to set aside a multiple-year budget of as much as Bt500,000 to cover losses and other expenses resulting from this undertaking.

 

While Thailand’s farming population has been shrinking over the past several decades, the country still has an estimated 15 million farmers. They and their families account for 23 per cent of the total population.

 

Therefore, along with other low-income groups, it is not only legitimate but politically mandatory for every government to lend a helping hand to low-income people, including farmers and their families, especially in terms of keeping their earnings above the poverty line.

 

However, rice and other crops are subject to uncontrollable natural factors, so it is not economically sound for any government to manipulate the market for rice and other farm produce in the hope of gaining an upper hand.

 

Thailand’s rice acreage should be reduced while ensuring that productivity continues to increase so the country stays competitive, as opposed to the government trying to encourage more farmers to grow more rice with similarly generous pledging schemes.

 

Such schemes are always vulnerable to corruption and inefficiencies.

 

As evidenced in the Yingluck rice-pledging programme, major rice traders joined hands with politicians to reap personal benefit. Fake government-to-government (G-to-G) export deals announced during Yingluck’s tenure were obvious examples. 

 

In return for huge profits, dishonest traders colluded with Commerce Ministry officials to arrange bogus G-to-G deals for rice exports to China that never happened, resulting in more damage to the state.

 

To boost farmers’ and other poor people’s income, it is worthwhile considering adopting the so-called negative income tax (NIT) concept, in which people earning an income less than a certain amount get a supplementary income from the government via the income tax system. This could be implemented after the government has a credible and comprehensive database on low-income people.

 

Fourteen million people recently registered as low-income earners to be eligible for supplementary welfare from the government, which is expected to start the programme with a small pay-out each month.

 

The programme could be further developed to take advantage of the NIT concept, which would help reduce corruption and inefficiencies in welfare and other populist policies using the taxpayers’ money, such as rice-pledging and similar schemes.

 

Source: http://www.nationmultimedia.com/detail/opinion/30324834

 

-- © Copyright The Nation 2017-08-25

[gk10002000]

Thailand’s rice acreage should be reduced while ensuring that productivity continues to increase ".  Well, sure

[Samui Bodoh]

27 minutes ago, webfact said:

There are better ways to help the poor

 

It is true that there are better ways to help the poor.

 

The real question is whether there is the will to do so...

 

[ezzra]

In the 30 years that i have been living in this country and following

it's news, there wasn't a year or even a day, that the farmers warn't poor

or needed help in this form or another,

if you give every farmer one million baht gift today, in 6 month it

will be all gone and he still be in the same situation he was before,

those people are inherently poor and very low skills of economic 

managements and life's self sustainability, and it seems that that's the

way they will be for many years to come... 

[Samui Bodoh]

22 minutes ago, ezzra said:

In the 30 years that i have been living in this country and following

it's news, there wasn't a year or even a day, that the farmers warn't poor

or needed help in this form or another,

if you give every farmer one million baht gift today, in 6 month it

will be all gone and he still be in the same situation he was before,

those people are inherently poor and very low skills of economic 

managements and life's self sustainability, and it seems that that's the

way they will be for many years to come... 

 

There is a great deal of truth to your post.

 

However, this is not a situation that needs to continue; this can change IF there is a will to do so. I have worked in rural areas in other Asian countries and seen the change first hand.

 

The quality of education in rural Thailand is abysmal; that could change.

Agricultural outreach workers could assist in the financial side of farming, that could change

Amalgamation of farms to create better economies of scale could occur, that could change.

Crop insurance schemes could be introduced, that could change.

Modern techniques of farming can be introduced, that could change

 

I could go on, but I think my point is made. Other Asian countries have made the shift, and the only reason Thailand hasn't is a lack of focus and will.

[chainarong]

1 hour ago, ezzra said:

In the 30 years that i have been living in this country and following

it's news, there wasn't a year or even a day, that the farmers warn't poor

or needed help in this form or another,

if you give every farmer one million baht gift today, in 6 month it

will be all gone and he still be in the same situation he was before,

those people are inherently poor and very low skills of economic 

managements and life's self sustainability, and it seems that that's the

way they will be for many years to come... 

It's called education, for years now, the younger one's go to agriculture schools learn and come home to find father and grandfather wont listen to new idea's in farming , they still pollute the atmosphere with smoke because their ancesters did the same burn off 200 years ago.

[scorecard]

1 hour ago, ezzra said:

In the 30 years that i have been living in this country and following

it's news, there wasn't a year or even a day, that the farmers warn't poor

or needed help in this form or another,

if you give every farmer one million baht gift today, in 6 month it

will be all gone and he still be in the same situation he was before,

those people are inherently poor and very low skills of economic 

managements and life's self sustainability, and it seems that that's the

way they will be for many years to come... 

 

Agree, my experience also.

 

What's still missing is give a fishing road, maybe also a boat, but stop giving free fish. Just giving free fish will never improve their quality of life, which for many is just awful. 

 

It's obvious that small scale farming just keeps large numbers of people poor and depending on handouts but of course ideal circumstances for politicians to gain big but unethical and corrupt money.

 

Clearly there needs to be  major reconstruct of how large numbers of people can earn a living in some different way. And that probably means incentives to encourage people to get into a new picture and without doubt lifetime farmers will be reluctant / will have strong fears about changing their lifestyle and their work.

 

Not easy but it must be done / it can be done...

[scorecard]

1 hour ago, Samui Bodoh said:

 

There is a great deal of truth to your post.

 

However, this is not a situation that needs to continue; this can change IF there is a will to do so. I have worked in rural areas in other Asian countries and seen the change first hand.

 

The quality of education in rural Thailand is abysmal; that could change.

Agricultural outreach workers could assist in the financial side of farming, that could change

Amalgamation of farms to create better economies of scale could occur, that could change.

Crop insurance schemes could be introduced, that could change.

Modern techniques of farming can be introduced, that could change

 

I could go on, but I think my point is made. Other Asian countries have made the shift, and the only reason Thailand hasn't is a lack of focus and will.

 

"... lack of focus and will."

 

Agree, IMHO one of the major roadblocks is that Thailand has a very poor track record in regard to incapable and very disinterested ministers (in 99% of the ministries) plus the same in terms of the top levels / all levels of the public servants in the ministries, who got to the top positions by buying promotions and through nepotism, not through proven capability and proven high performance. 

[soalbundy]

1 hour ago, scorecard said:

 

"... lack of focus and will."

 

Agree, IMHO one of the major roadblocks is that Thailand has a very poor track record in regard to incapable and very disinterested ministers (in 99% of the ministries) plus the same in terms of the top levels / all levels of the public servants in the ministries, who got to the top positions by buying promotions and through nepotism, not through proven capability and proven high performance. 

I just love the way these people tell the farmers to try different crops/produce but don't provide a market for the said goods

[scorecard]

Just now, soalbundy said:

I just love the way these people tell the farmers to try different crops/produce but don't provide a market for the said goods

 

How true, in fact ultimately encouraging the farmers to remain poor...

[Srikcir]

5 hours ago, webfact said:

it is worthwhile considering adopting the so-called negative income tax (NIT) concept, in which people earning an income less than a certain amount get a supplementary income from the government via the income tax system.

This article is a summary of a June 9, 2017 article that was more detailed: "Negative income tax under study"

Aimed at people who earn less than Bt30,000 a year. This follows Cabinet-approved Bt50 billion assistance package for low-income earners and would incorporate NIT benefits.

http://www.nationmultimedia.com/news/business/EconomyAndTourism/30317572

A year ago the Cabinet approved the Bt50 billion to allow low-income earners age 18 and older and earning less than 100,000 baht a year to apply for a social welfare program. So I assume that the less than Bt30,000 a year category would receive a greater per capita benefit than those Bt30,000+ a year category?

https://www.thaivisa.com/forum/topic/925082-low-income-earners-to-receive-social-welfare-benefits/

So whether an NIT is implemented or not Thailand will have a welfare safety net regardless. 

There are pros & cons to an NIT welfare-based system. Immediate cons are very subjected to fraud and mismanagement. Some descriptive links:

https://mises.org/library/fallacies-negative-income-tax

http://noahpinionblog.blogspot.com/2013/11/money-for-nothing-negatives-of-negative.html

http://blogs.ubc.ca/mongolia/2017/nit2-pro-con/

With highly effective administration and enforcement, Thailand should be able to overcome some of the disadvantages ..... sometime in the far future.

 

 

[Srikcir]

53 minutes ago, Srikcir said:

With highly effective administration and enforcement, Thailand should be able to overcome some of the disadvantages

In fiscal year 2013 the US paid out $15 billion or more than Bt500 billion (12/31/2013) due to errors and fraud.

https://www.accountingweb.com/tax/irs/report-irs-made-up-to-156-billion-in-faulty-eitc-payments-in-2013

And that's with a very sophisticated and professional tax administration (IRS).

Thailand needs to give priority to its new welfare system to counter waste, inefficiency and fraud - both internally and externally. Part of that effort may require external independent accountability of payments made to military soldiers if they're not disqualified from welfare - a major hurdle for transparency.

[mike324]

Education is the key, a total overhaul of the education system starting now will make an impact 10-20 years down the road.

 

To help farmers now, government needs to be even more proactive on educating farmers on farming efficiencies as well as alternative crops. Simply tackling corruption will also make any rice scheme more sustainable and longer lasting. I think answers are all out there, its the human aspects of it in Thailand that is hampering change.

[MyFriend You]

9 hours ago, ezzra said:

In the 30 years that i have been living in this country and following

it's news, there wasn't a year or even a day, that the farmers warn't poor

or needed help in this form or another,

if you give every farmer one million baht gift today, in 6 month it

will be all gone and he still be in the same situation he was before,

those people are inherently poor and very low skills of economic 

managements and life's self sustainability, and it seems that that's the

way they will be for many years to come... 

New Motorcycles for everyone Momma - the rice pledge check was deposited today.

[MyFriend You]

6 hours ago, soalbundy said:

I just love the way these people tell the farmers to try different crops/produce but don't provide a market for the said goods

Poppy plants are always in demand.............

 

[soalbundy]

49 minutes ago, TunnelRat69 said:

Poppy plants are always in demand.............

 

you still have to know where to sell them, or the product  thereof 

[impulse]

11 hours ago, Samui Bodoh said:

It is true that there are better ways to help the poor.

 

The real question is whether there is the will to do so...

 

The real question is whether that's the objective.  Or is it to help the rich?

 

[rickudon]

Part of the problem are the 'middlemen' . If you do not sell to the local wholesale consolidators, and try to market your products yourself, You soon hit them if you scale up. You get a visit from the local rice/fish mafia who make you an offer you cannot refuse - at least it is hinted that it would be in your best interests ..........

 

So you either stay small and sell retail only, or opt to break even or make a very small profit while enriching the middlemen. I know pig and fish farmers who have had these problems. They say if you do not comply you find your regular buyers start disappearing or offer lower prices, and feed supplies suddenly go 'out of stock'. Even a 2 day gap in supplies/slaughter dates can quickly erode your profit margins.

 

You can only survive by staying small or gambling on growing big quickly (or find a niche in the market not 'controlled' by a local boss).  Got squeezed out of the duck egg business myself, and we were small. Our local outlets were flooded with eggs and the price dropped. F-in-L still does it (with supplementary feed from the old rice fields but the rest of the family, and a couple of other locals, were not making a baht anymore. Also had 'not in stock' problems and when you feed substandard rations the laying rate drops for a week - taking away any potential profit. Egg prices down, feed prices up - even if only up 2-3% - and you are no longer making a profit.

[tomta]

On 8/25/2017 at 3:48 PM, TunnelRat69 said:

New Motorcycles for everyone Momma - the rice pledge check was deposited today.

A motorcycle is a farming tool, if you think about it. The Bangkok PAD decried back in Thaksin's government the fact that they were wasting the money on mobile phones and motorcycles and pickup trucks. All of them are many things and have many uses - and they are farming tools/

[Siripon]

8 minutes ago, tomta said:

A motorcycle is a farming tool, if you think about it. The Bangkok PAD decried back in Thaksin's government the fact that they were wasting the money on mobile phones and motorcycles and pickup trucks. All of them are many things and have many uses - and they are farming tools/

Most of the PAD complaints were about the use of the Village Fund to buy mobile phones- most families never got enough from the Village Fund to pay for the deposit ( 80,000 baht plus) on a pick-up which could indeed be used for selling goods in weekly markets around the area. Monday -here, tomorrow -there.

At the time Thaksin owned AIS so he was using public money, taxes, to lend to the populace to buy his phones! Very clever, no personal risk but all profit to himself.

Recently there was a survey saying the village fund had proved to have long term use to villages, but at the time Thaksin introduced it no one in our village in Ban Pai district could borrow more than 5,000 baht, unless they had relatives on the committee issuing the money.

 

[tomta]

Thank God for an article on reducing inequity in Thailand in The Nation of all places that did not invoke the quasi-religious notion of the sufficiency economy as the panacea. Not a very insightful article but perhaps things will progress.

[Bangkokazy]

When you have a mindset like a Thai`s. You will always be poor.

I have to spend the money today because I can die tonight and then I have no pleasure in them.

Mindset of a Thai.

[observer90210]

Don't give the poor tons of fresh fish....teach them rather how to fish!