Fears rice scheme ' will break budget'

THE FINANCE MINISTRY's sub-committee assessing the cost of the rice-pledging scheme plans to finalise figures for the first year of operations this week, with or without the latest information on inventories, a ministry source said yesterday.

The panel chaired by deputy permanent secretary Supa Piyajitti is rushing its report, as the scheme is entering its third year and there are concerns over inconclusive results from the first two years.

Indeed, there are fears that the scheme’s expenditures, which have reached Bt700 billion, could spiral out of control and threaten plans to run a balanced budget by 2017. 

The report has been delayed for months as the Commerce Ministry has asked for more time to submit the latest data on remaining stocks and the quantity of rice released.

“As the Commerce Ministry could not yet trace all stockpiles, the committee will need to conclude our report with the available information,” said the official, who asked not to be named. All unaccounted for stocks will be deducted, based on the average price of rice sold by the ministry, the source said.

The Commerce Ministry earlier informed the committee that 2.9 million tonnes of rice was missing from granaries. However, after inspection by police and other agencies, the figure could rise to 3.9 million tonnes.

Kicked off in 2011 for the 2011/12 harvest year, the scheme is expected to show a loss of at least Bt100 billion in the first year alone.

The Cabinet recently approved a Bt270 billion pledging budget for the 2013/14 harvest year. However, under the government’s vow to practice fiscal discipline, by the end of this year it is committed to lower outstanding spending under this scheme from Bt700 billion to Bt500 billion by disposing of rice stocks.

Churarat Sutheethorn, head of the Public Debt Management Office, said the Bank for Agriculture and Agricultural Cooperatives, which is in charge of implementation, had not yet put a fund-raising plan to the office.

Although the office’s loan guarantee for fiscal 2014 is set at Bt250 billion, the office’s loan guarantees for the rice-pledging scheme have hit the ceiling of Bt410 billion.

“Bringing down the scheme’s outstanding expenditure to Bt500 billion at the end of this year is set to balance the budget in 2017. If this can’t be done, we may not achieve the target,” she said.

Under new Commerce Minister Niwatthumrong Boonsongpaisan, the ministry is accelerating stock releases. Two weeks ago, after returning from China, he said Chinese state enterprises had agreed to place orders for 1.2 million tonnes of Thai rice.

The pledging scheme raised the government stockpiles to about 15 million tonnes, and given the high pledging price of Bt15,000 per tonne against a lower market rate, it may be difficult to unload stocks, even at a loss.

In July, 5-per-cent broken milled white rice from Thailand was quoted internationally at $538.26 per tonne on average or Bt16,148. The price included all freight costs.

Democrat MP Ong-Art Klampaiboon said yesterday the government could make the rice scheme transparent by revealing details of government-to-government rice deals.

“If the government can do this, I believe that the scheme would be more transparent,” he said, calling for details on the G2G rice deal with China. 

Niwatthumrong announced earlier this month that China’s state enterprises would place orders for 1.2 million tonnes of white rice from Thailand.

Ongart said some rice traders were profiting from the deals, with rice prices quoted below market rates. Once selling the rice, they benefited from the difference.

He said bosses of some warehouses used to stock the rice were also benefiting.

He promised further probes and said if any irregularities were found, the Democrat Party would submit a petition to the National Anti-Corruption Commission.