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17 ต.ค. 2013
Read in Minutes



The main rice crop season was several hours old before farmers had taken more rice to the buying stations than the government had money budgeted to pay them.

But there were signs, as the third year of massive subsidies began, that the rice-pledging scheme of the Pheu Thai government was both becoming the new normal and slowly taking form as a manageable system.

The Bank for Agriculture and Agricultural Cooperatives (BAAC), never comfortable and still reluctant in its role as bankroller and financial manager of the scheme, was first to sound the alarm. As of one week and one day into the new crop season, the BAAC reckoned it would need 9 billion baht quickly, to pay for the unexpected extra flow of rice into the government approved warehouses. The bank and government planned — if ‘‘planned’’ is the correct word — for 22 million tonnes of unmilled paddy. By Oct 8, it was clear they were going to get 1.34 million tonnes more than that.

The 9-billion-baht bill for the additional rice is more than a rounding error, but causes no major damage, once the cabinet actually votes to give the cash to the bank. The rice-pledging programme remains the least transparent of any government project, but it is ever so slowly being revealed, albeit accidentally.

For example, when it complained about a shortfall in funds to pay farmers for the rice, the BAAC also divulged other numbers.

In turn, the alert Thailand Development Research Institute (TDRI) pounced on the unintentional disclosures, analysed them and provided new information to the public.

In short, according to the government’s own figures, the rice-pledging scheme has cost taxpayers 660 billion baht, so losses will be cut to net selling price, less 600 billion baht, assuming the authorities can sell the accumulated rice and clear the warehouses of the past two years’ crop by 2017.

That will probably happen. The government had no idea what it was getting into when it started the rice-pledging scheme after the 2011 elections. But it is ponderously, clumsily getting the show on the road to sell rice.

Item: The government is currently holding an auction for 200,000 tonnes of rice, already packaged into 5kg bags for the country’s markets and supermarkets.

Item: The government has reduced the sales price of rice on the world market where, for example, Thai 5% broken rice is now only slightly more than Vietnamese rice, and cheaper than Indian grain.

Item: Tomorrow, the government will auction 300,339 tonnes of mixed glutinous ( khao niao) and broken rice from its warehouses and — this is the newsy part — the auction is open to both Thai and foreign buyers.

The International Monetary Fund released its semi-annual predictions. It found the Thai economy in a slowdown in the first half of the year, and believed that the country will expand its way to a healthy 3.1% GDP growth by the end of the year, and an impressive 5.2% next year. Much of that will come from international rice sales, apparently.

The media — corporate and social — spent last week mulling over the strange rumour that Prime Minister Yingluck Shinawatra had signed a barter deal with her Chinese counterpart, Li Keqiang, to ship Thai crops to China in return for the alleged Chinese expertise in building high-speed railways.

Meanwhile, the actual news was a stunningly documented report by Nanyang Technological University that confirmed that, yes, China is about to turn, in a single year, from a country self-sufficient in rice, to the world’s biggest importer, a bigger market than even Nigeria.

There are several main reasons for this almost incredible turnaround, so profound that China is unlikely to reverse them for years. But the result is that the past 18 months of talks, wheedling and negotiating with Chinese officials and companies is likely to pay off with rice sales to the Middle Kingdom.

As if on schedule, Beijing agreed to buy a million tonnes of rice in a government-to-government deal, made through the Thai Rice Exporters Association. The purchase is a five-year contract, a modest sale averaging 200,000 tonnes of Thai rice a year — hom mali (fragrant), broken white and glutinous.

Just as government officials have been saying for months, such deals will be mostly opaque. Chinese authorities are already receiving harsh criticism across the country for letting the country’s rice supplies deteriorate. They will not want to disclose details to their citizens of how much rice they buy abroad, and what they pay for it. Friday’s purchase by China supposedly totals US$750 million (23.5 billion baht), but there is no way of telling how much Thailand receives for each delivery of the various rice types.

Fans of accountability and open government will thus be disappointed in coming months that while some details will leak out, the rice-pledging scheme will remain obscure in many areas.

On the other hand, there is opportunity, if not yet certainty, that Chinese companies and the government will both lean towards favouring purchases of Thai rice to feed their citizens.

The rice-pledging scheme will lose money overall, just like any subsidy programme, but this may be the rice season it changes from out of control to sustainable.

First published in Bangkok Post, 13 October 2013.