Rise in graft cases, jump in govt debts seen if policy stays

Moreover, leading economists claim that continuation of such a high-subsidy scheme will lead to the country facing overwhelming debts as a result of programme losses and subsidies. They suggest the government should limit the overall volume of |subsidised rice and return to a price-guarantee regime instead to control the losses.
Sirilaksana Khoman, senior adviser at the Office of the NACC, told a seminar that the agency was in the process of investigating in depth some 100 cases of corruption at almost every stage of the rice-pledging scheme.
Most of the cases concern local administrations.
Although in some instances relatively small amounts of money were involved, local-government officials had chosen not to investigate the irregularities, besides which there were conflicts of interest surrounding the programme, she said.
“The government accepts that there are loopholes in the project at every stage of the process, and says it is considering protection measures,” Siri-laksana said, but added that her office did not agree with the government’s basic approach to the problem.
She said the government claimed that its price-subsidy programme relied on the market mechanism as well as the development of the community futures market. However, she said there was no such system relating to the pledging scheme and called the claim “propaganda”.
Instead, the government purchases rice, which it then warehouses in a huge stockpile to allow many agencies to reap benefits from the scheme, Sirilaksana said.
Moreover, she said corruption at the policy level was not easy to rein in. The office is working to arrest graft not only concerning the pledging process itself, but also among the network of involved people, she added.
The NACC adviser said that if the government was not prepared to cancel the policy, it should limit the pledging volume and the types of rice covered by the scheme.
In addition, details of rice exports under government-to-government deals should be opened up to the public as well as to agencies, including the Finance Ministry, the Office of the Auditor-General and the NACC, so that they can explain the matter to |taxpayers.
Former deputy prime minister and finance minister MR Pridiyathorn Devakula suggested at the seminar that the government should stop all price pledging for rice and go back to a price-guarantee system, as had been instituted under the previous Democrat Party-led administration.
“If the government continues to proceed with the policy, Thailand will face an overwhelming debt and it will have an indirect impact on the instability of our currency,” he said.
“I think the government’s team of economic advisers doesn’t think deeply enough, while some experts [in the government] have good ideas but do nothing, and instead follow the government’s line.”
The Democrat-led government had spent Bt60 billion on its price-guarantee policy without incurring any other expenses, said Pridiyathorn.
That level of expenditure under such a scheme would allow small farmers to directly enjoy a price subsidy without the national ratio of debt to gross domestic product becoming too high, he said, lamenting the fact that the pledging policy had allowed big farmers to reap the benefits of high-price intervention.
He estimated that the government’s pledging-policy loss for 2011-12 rice production would reach Bt140 billion, and that the loss would rise to Bt210 billion for next year’s output.
Nipon Poapongsakorn, leading economist at the Thailand Develop-ment Research Institute, said the government policy had directly affected taxpayers and put the country’s rice export business at risk. The institute estimates that the government will make a policy-related loss of Bt170 billion for this year’s rice production.
Moreover, if the government’s export price is lower than that of Vietnam, the loss will be even bigger, he said.