Govt firm on rice-pledging scheme

Despite worries about the impending huge losses from the proposed rice-pledging scheme, the government reaffirmed that it would go ahead with the subsidy programme as it would help alleviate poverty and balance the Kingdom

Speaking during a meeting with rice traders, farmers, and government officials in preparation for the pledging project, Kittiratt said the scheme is a serious attempt by the government to solve the poverty problem. "The government is confident that the rice-pledging programme will create higher income for farmers rather than huge losses as believed by some, Kittiratt said, adding the subsidy will increase spending. Former finance minister Pridiyathorn Devakula, and prominent economist Dr Ammar Siamwalla of the Thailand Development Research Institute, have both warned of huge losses and high corruption under the pledging project. They questioned who would be responsible for the losses under the pledging project, while rice exports would drop considerably as importers would not accept the steep rise in the price of Thai rice. Kittiratt said that he would soon meet Pridiyathorn and Ammar to explain the government’s decision to proceed with the pledging programme and ways to ensure transparency and prevent corruption. To ensure export growth, Kittiratt said the government has negotiated with many rice-importing countries to release government stockpiles in the future. The government prefers to sell the rice under government-to-government contracts. He declined to name the countries and the volumes as that could lower the price of rice. Asked about Thailand’s decision to cancel the sale of 300,000 tonnes of rice to Indonesia, Kittiratt explained that the Thai government has already explained its position to Indonesia. He said there may be renegotiations for selling rice at a new price as the previous price offered was too low. He added that the government would carefully consider releasing rice from its stockpiles, but would maintain a steady supply as it would affect the market price. Following the high subsidy price of rice under the pledging project, Thai rice export volumes may not achieve 10 million tonnes this year. However, Kittiratt said that although export volumes would be down, the value would go up due to the higher price after pledging. So far, Thai rice prices have increased continuously from last week at Bt16, 500 to Bt17, 500 per tonne for 5 per cent white rice, while jasmine rice price has been unchanged at Bt31,500-Bt32,500 per tonne. Kittiratt said the government is confident that rice price will continue to increase after the pledging project gets under way on October 7. He said that Thai consumers may have spend more for rice – about 40 satang per rice dish or Bt2 per day – but the benefit would be go to farmers. A rice-miller, who did not want to be named, said the government will face huge problems as it has not limited the amount of rice entering the pledging project. Although the government says it is cooperating with local officials and the police to prevent rice smuggling from neighbouring countries, the high price gap between Thai rice and those from other countries will encourage traders, farmers, and some corrupt officials to enter the pledging. The source added that the government should clearly announce that it would not release rice stockpiles during the pledging project. Even though the government will release rice stocks secretly, importers and the market will demand more supply of rice. The release would cause a drop in the price of rice, while any inefficiency in running the pledging project may boost farmers’ income but destroy trading growth.

Govt firm on rice-pledging scheme

Despite worries about the impending huge losses from the proposed rice-pledging scheme, the government reaffirmed that it would go ahead with the subsidy programme as it would help alleviate poverty and balance the Kingdom

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