The heavy price of rice politics in Thailand

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From Thai PBS World

Commerce Minister Phumtham Wechayachai recently caught the attention of the public when he tasted rice that had been stored for 10 years to prove that it had suffered no degradation in quality and could be sold.

Observers see his action as a political ploy to justify the controversial rice-pledging scheme implemented during the Pheu Thai government of Yingluck Shinawatra.

The last batch totalling 15,000 tons of Thai Hom Mali rice (premium fragrant rice) has been stored in two warehouses in the northeastern province of Surin.

The stock was part of about 18 million tons of white rice amassed by the Yingluck government under the massive rice subsidy scheme over 10 years ago.

The Yingluck government initiated the rice-pledging scheme in the harvest season of 2011-12, which aimed to buy every single grain from farmers, promising 15,000 baht per ton of paddy rice at that time, well above the market price of around 10,000 baht per ton.

The scheme ended in the harvest season of 2013-14 when the military seized power in May 2014.

To finance the scheme, the government borrowed 881.3 billion baht from the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC).

At the end of last year, the government had repaid the BACC 296.6 billion baht while outstanding debt amounted to 226.3 billion baht, according to the financial statement of the BAAC.

The government also had to spend an additional billion baht for warehouse owners to store the rice.

“The government was hoping that by stockpiling rice in warehouses, it could push up global prices as Thailand was one of the leading rice exporters.

However, global prices defied the Yingluck government’s expectations,” said Viroj Na Ranong, research director at the Thailand Development Research Institute, an independent think-tank.

Not only did the global market price not rise, Thailand’s rice exports also fell during those years.

The country lost its status as the world’s top rice exporter in 2012 due to the controversial rice scheme, falling to third place behind India and Vietnam.

Thailand exported 6.9 million tons of rice in 2012, behind India’s 9.5 million tons, and Vietnam’s 7.8 million tons, according to the Thai Rice Exporters Association.

The controversial scheme also resulted in a high cost for the taxpayers.

“The cost of the rice subsidy scheme during the Yingluck administration was huge, estimated to be about 600 billion baht,” said Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand.

Allegations of corruption in the implementation of the rice subsidy scheme was cited as one of the justifications for the 2014 military coup.

The Supreme Court’s Criminal Division for Political Office Holders in 2017 sentenced former commerce minister Boonsong Teriyapirom to 42 years in prison while other senior officials and rice traders involved in corruption also received lengthy prison terms.

Yingluck herself was sentenced to five years in prison. She fled the country before the court handed down the verdict. She was convicted for failure to perform her duties in overseeing the scheme that resulted in widespread corruption.

Continues at

https://www.thaipbsworld.com/the-heavy-price-of-rice-politics-in-thailand/