Thailands misguided rice policy

[Flashermac]

. . .

 

 

The indebtedness and poverty of farmers was ignored for decades by governments in Bangkok.

 

Then in the 2001 election, a wealthy telecoms tycoon, Thaksin Shinawatra, drew up a platform of policies aimed directly at farmers, like debt forgiveness and a village loan fund.

 

It proved a stunningly successful vote-winning strategy, delivering Mr Thaksin three successive election victories, before he was ousted by a coup in September 2006.

 

But many of those policies have done less for farmers than Mr Thaksin claimed.

 

One, in particular, is proving a huge headache for the current government, led by his main rival, the Democrat Party.

 

It is called the rice mortgage scheme. The idea is to help farmers ride out price volatility by allowing them to sell their rice to the government at a guaranteed price.

 

Farmers usually have no way to store or process their rice, so they are all forced to sell at once at harvest time, allowing the millers – who do have these facilities – to bargain down the price and take most of the profit.

 

But the scheme has become riddled with corruption, and benefits only a minority of farmers.

 

“Most of them, unfortunately, are rich farmers with irrigation,†says economist Nipon Poapongsakorn from the Thailand Development Research Institute.

 

“Poor farmers in the north-east don’t have a surplus of rice to sell, so they don’t benefit from this policy at all. It is a pro-rich, pro-business policyâ€Â.

 

The scheme is also very expensive for the government, especially now, because last year – when rice prices were unusually volatile – a weak government, led by Mr Thaksin’s allies, set the guaranteed price too high.

 

Those with rice to sell would only sell to the government. Rice traders, like Asia Golden Rice - one of Thailand’s most successful - found it difficult to procure supplies at competitive prices for their overseas customers.

 

“We might even lose our number one ranking as a rice exporter to our competitors,†says Saranyu Jeamsinkul, deputy managing director for Asia Golden Rice.

 

“We are at least $100 a tonne higher than Vietnam - so it is rather difficult to export at the momentâ€Â.

 

The government has ordered Deputy Prime Minister Kobsak Sapavasu to sort out the mess.

 

He estimates it has already cost 11 billion baht ($325m) just to process and store crops bought under the mortgage scheme.

 

And because rice prices have fallen this year, when the government sells the stocks he estimates it will lose another 20 billion baht ($590m).

 

“The numbers are just unbelievable," says Mr Kobsak.

 

But his attempts to close down the mortgage scheme, and replace it with a simpler subsidy, have been blocked by his own coalition partners.

 

There is a strong suspicion, shared by Mr Kobsak, that a lot of politicians are making money out of the scheme – perhaps from bribes from warehouse-keepers storing it, or traders trying to buy at bargain prices.

 

. . .

 

 

 

BBC

 

 

 

 

[Faustian]

There's no end to the corruption and incompetence it seems...

[..]

Shhh! You'll wake the red shirts and Issan-ers and they'll have to come back to reality from their fantasy world! And Mentors & ClubSiam too!

 

That would be mean. 555555555555555555

 

Cheers,

SD

[Sporty]

" Thai Hom Mali is currently quoted at up to US$1,000 per tonne, while Pathum Thani rice, a cheaper strain of fragrant jasmine rice, is around $800, almost double the prices of the grains from Vietnam and China which were quoted at only $485 and $400-500 per tonne respectively. "

 

http://www.bangkokpost.com/business/marketing/20613/hom-mali-rice-under-threat