dbd · 2020-02-29 · bljel'luvi· 2 ~n'llrl~ ulmwi~ , 1 bill1 fln"ll~lno...

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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24THE NATION

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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Ifni~V1i1~VJ1ru1fpoundJ

THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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Ifni~V1i1~VJ1ru1fpoundJ

THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

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Ifni~V1i1~VJ1ru1fpoundJ

THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

Ifni~V1i1~VJ1ru1fpoundJ

THE NATION JANUARY 2014b

Rice scheme wont survive PETCHANETPRATRUANGKRAI THE NATION

IT IS BECOMING more and more likely that the rice-pledging scheme will be scrapped or at least modified regardless ofwho wins the next election Since the programme was launched it has caused problems for rice trading and held back agri cultural development while the government has struggled to supshy

port the project financially Blame could be placed on politishy

cal conflict for the rough start to the schemes third year But it seems clear that even without the current chaos which has partially delayed the governrilents ability to fund the project it would eventualshyly have to be scrapped or adjusted because ofits massive COampts

According to a Finance Ministry audit the scheme racked up more than Bt400 billion in losses inmiddot its

first two years The governments inability to

release rice from its stockpiles quickly has aLso resulted in barriers to financing the third yearof the programme

The Commerce Ministry re~ort- ed that It was able to releaSe a out 2 million tonnes VIa general aucshytion durin~ the past year plus abOut 8 mInion to 10 millIon tonnes under government-to-govshyernmentcontracts

However the government has never revealed to the public how much ofa loss it has incurred by

unloading rice at subsidised prices While rating agencies watched

with concerns on possible impacts on fiscal discipline the Pheu Thaishyled government recently raised the legal limit ofthe schemes outshystanding financing pool from Bt440 billion to Bt600 billion

But despite mounting evidence that the pledging programme was in trouble the government made no effort to drop it or even scale it back Since 2011 the Ymghick Shinawatra government has spent almost Bt600 billion on rice pledgshying However some studies have indicated that only 30 per cent of this outlay has been paid to farmshyers while millers traders and unscrupulous officials and politishycians have profited handsomely from it

in present form

HIGH COSTmiddot The Yingluck Shinawatra gover has spent mqre than Bt537 for the rice pledging during the 201112 to 20132014 harvest

Source Commerce Ministry

A study by the Thailand Development Research Institute also found that the country would lose up to Bt200 billion each year under the pledging programme from reduced rice-sales income

Thai Rice Farmers Association presIdent Praslth Boonchuey said the government needed to reVIew the scheme soon as the rice-farmshying industry had stagnated for sevshyeral years now

Despite the high pledgin price farmers have never received returns and still faced a high debt burden due to the higher cost of production

The government will finally need to review the policy because of huge losses and financialliqnidity problems h~ said

Prasith added that farmers had put no effort into improving rice quality because the government had focused only on price with no plan to promote sustainable growth of rice plantations

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

Farmers want a project that focuses on long-term development rather than short-term gains from a pledging scheme

The scheme has drawn heavy criticism from both the parliamenshytary opposition and academics throughout the past year

Their top concern was fiscal disshycipline as all ofthe losses racked up under the programme would have to be dealt with sooner or later and this would increase the public debt currently at around 44 per cent ofgross domestic product

The scheme has been funded by the Bank for Agriculture and Agricultural Cooperatives (BAAC) which is responsible for paying participating farmers while the Commerce Ministry is in chargemiddot of the release ofthe

Meanwhile Vietnam appeared to benefit from Thailands high pledgshyingprice as the price of its 5-pershycent white rice increasedfrom $390 atonne last JanuarY to $430 last month

In the first two years ofthe pledging programme the Thai govshyernment spent Bt502207 billion on it but the Commerce Ministrv had returned only Bt160 billion bull from rice sales to the Finance Ministry as oflast November

The BAAC in need ofnew funds for the third year of the proshygramme had to borrow Bt75 bilshylion Though the bonds were fully backed by the government their sale was disrupted by the political

demonstrations rocking Bangkok and the resulting dissolution of

Parliament Only stoCkjllies halfofthem

middot CaretaKer found buyers COmmerce and at a higher Minister yield

middot Niwatthumrong Thailand had BOonsongpaisan been the worlds

osaia earlieiihatmiddot since he took office in July the ministry had sold 3 million lonnes ofrice~ But that still left about 10 million tohnes of nee in the warehouses

The outlook of ihe whole rice trade is unclear given low global prices Many questions need to be answered therefore as to how Thailands pledging scheme can sUrvive financially

The programme has also drawn complaints from exporters faced with l()w global prices against the high local price

According to the Thai Rice Exporters Association the price of Thai rice dropped continuously last year despite the high pledging

middot price As ofDecember 11 the price of5-per-centwhite rice was quoted atUS$453 atonne down from

middot $599 last January During the same penodthe price ofThai 100-pershycent white rice also dropped from $616 a tonne to $460

largest exporter of rice since

1982 but lost that position in 2012 after the current government implemented the pledging proshygrammes high rice price ofup to Bt15000 a tonne

Export volume dropped to 694 million lonnes that year a plunge of35 per cent compared with 2011 For 2013 the country is expected to be in third place after India and Vietnamexporting only about 7 million tonnes

Moreover it remains doubtful whether the government can clear out the enormous stockpiles of rice

accumulated by prolonging the pledging project for more than two years amid sItlggish rice trading in

the world market and high compeshytition

Rice can easily deteriorate in quality and price ifstored for long periods Inevitably Thailand will bear aloss from b1Lying rice at a high price but selling it cheaply

THE OUTLOOK OF THE WHOlE RICE TRADE IS UNClEAR GIVEN LOW 6LOBAL PRICES MANY QUESTIONS NEED TO BE ANSWERED TH~ 1510 HOW THAIlANDS PLEDGING SCHEMECU SURVIVE FINANCIALLY

- ~

under the pledging project In the first 10 months of2013

rice exports dropped by 35 per cent in volume to 54 million tonnes and by 43 per cent in value to $365 billion

Rice exporters say their incomes and profit have declined greatly duringthe past two years One source saidhis company now faced some losses because ofthe high price butit needed to accept some orders to maintain the business

Chookiat Ophaswongse honshy orary president ofthe Thai Rice

Exporters Association said most rice exporters had suffered as profshyit margin was only 1-2 per cent

Vichai Sriprasert another honshyorary president ofthe association

said the governmenthad chosen the wrong methodby setting the pledging price too high and had not shown concern for rice traders especially general exporters

Instead ofspending a huge amount ofmoney for the rice subshy

sidy it should finance long-term development projects such as irrishygation systems logistics seed qualshyity and research

The pledging is providing only small benefits to some people or companies who have closeconnecshytions to the government he said uging the administration to allow exporters to be involved in stockshypile releases

The cost ofmanaging governshyment rice stocks is also very high at Bt3300 a tonne while private exporters would spend only BtlOOO to manage a tonne ofrice cefore shipmentAlthough the price of

Thai rice has been cut it still has trouble selliqg it overSeas and comshypeting with rivals

This is beCause overseas traders lffiowenormous amounts are begin stored and continuing to deteriorate in quality as the pledging project has gone onVtchai said

Virabongsamiddot Ramangura an adviser to Ymgluck said earlier that Thailand should focus more on adding value t()the rice output To him it no longer matters ifThailand is the worlds largest rice exporter as it deals only with volumenot value

Still the governm~nt has done little to encourage addingvalue to this commodity Ofthe 60 million rai (96 million hectares) ofrice plantations only a few million rai have been dedicated to growing organic rice

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

~shylV I

While the private sector has attempted to add value to rice by marketing such products as rice bran oil cosmetics snacks and supshyplements the government has no clear plans to support trading of such products

Only th~National Innovation Agency has offered an annual rice- innovation award And after receivshying such awards only a few innovashytors are able to commerciaHse their products The government could be doing more to support value-added rice rather than focusing only on shortshyterm subsidies

Given these hurdles the pledging programme ifit survives at all looks certain to be revamped even ifPheu Thai is returned to power in the election

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)

-)

THE NATION In JANUARY 2014~

Inflation target for 2014 tentatively set at 2-28 PETCHANETPRATRUANGKRAI

THE NATION

  • 57-01-03 (ขาวการเมองและทวไป)
  • 57-01-03 (ใบนำสง)
  • 57-01-03 (กระทรวง)