Rice-pledging scheme helped the country, Wattana insists

The ex-minister defended the scrapped scheme ahead of the scheduled start of the trial of former PM Yingluck Shinawatra by the Supreme Court’s Criminal Division for Political Office Holders later this month for alleged negligence in overseeing the scheme and failing to stop graft and losses of at least Bt500 billion.

“The rice-pledging scheme was implemented under a strict financial and monetary discipline,” Wattana said. “The government was able to keep the fiscal balance by ensuring that state expenses and present and future financial commitments were at a level which the |government was able to finance. 

“The country enjoyed financial stability. The allegations that the project shouldered heavy losses and the government set aside a huge budget or sought loans to write off losses, creating bad debts and putting the country’s financial system at risk of going bankrupt, were a misunderstanding and false.’’

Wattana said the Yingluck government implemented the rice-pledging scheme by intervening in the market mechanism under a public policy protected by Article 84 (8) of the now-defunct 2007 Constitution. He said the article stipulated that the state must protect and maintain maximum interest for farmers in the production and marketing of agricultural produce. 

The scheme was aimed at stimulating the economy and increasing farmers’ purchasing power in order to raise domestic consumption.

“It was not normal rice deals by the state. We fixed the pledging price higher than the market price with the intention of helping the farmer,” Wattana said. 

“But when we released or sold rice from the stockpiles, we might have done it at higher or lower prices than the pledging price. It is not about making a profit or a loss as many people have said in trying to distort the issue.’’

He argued that all economic policies had expenses depending on the size of the policies, such as the Abhisit government handing out Bt2,000 cheques to each citizen with an income less than Bt15,000 and the Prayut government allowing tax deductions if someone spent at least Bt15,000 shopping in the week up to the new year.

“Projects which aim to help poor people have never been regarded as illegal,” he said.

Wattana said corruption allegations involving the rice-pledging scheme resulted from its implementation and not because the policy was wrong. 

He said issues ranged from corruption over the humidity and weight of rice, allegations about importing rice from nearby countries to benefit from the scheme, damage from improper storage of the rice, rice degradation, corruption over rice deals and delays in rice deals.

“When the government was warned about the corruption, it adopted several necessary measures to prevent corruption and damage instead of revoking the project,” he said.

Wattana said the Yingluck government implemented the scheme for five crop seasons and transferred the money directly to farmers’ bank accounts through the Bank for Agriculture and Agricultural Co-operatives – an amount totalling Bt878 billion.

He said the scheme boosted farmers’ purchasing power and domestic consumption. He cited tax collected by the Revenue Department from 2012-2014, which showed an average of Bt1,793 |billion, while from 2009-2011 it had collected an average tax of Bt1,306 billion. The increase was Bt397 billion a year on average or 30 per cent.

For VAT collection, he said from 2012-2014 the department collected an average of Bt678 billion, while from 2009-11 it collected an average of Bt503 billion, an average increase of Bt174 billion per year or 34 per cent.

He said state and private savings in 2011 reached Bt7,990 billion and the country’s total savings in 2014 reached Bt12,010 billion – a rise of Bt4,019 billion. National savings increased 50 per cent while public debt to GDP in 2014 stood at 46 per cent, which was less than 50 per cent, as restricted by the law.