We can learn from the studies into the flaws of the rice-pledging schemes
THE TWO studies that looked closely into the flaws of the past governments’ rice mortgage scheme might not have gained public attention had the Attorney-General not mentioned one of them in 2014, one of which the National Anti Corruption Commission had cited as part of its indictment report against wrongdoers involving in the scheme, including former prime minister Yingluck Shinawatra.
Noted macro economist, Dr Nipon Poapongsakorn, acting programme director of the sectoral economic programme at the Thailand Development Research Institute (TDRI), is behind the two studies that have helped the public learn more what went wrong with the populist policy and the lessons learned. He talked to The Nation’s Piyaporn Wongruang.
COULD YOU SHARE WITH US THE IDEAS BEHIND THESE TWO STUDIES?
Because of these two studies, I became one of the witnesses giving testimony to the NACC. But, in fact, these two studies were aimed at looking how best to prevent irregularities occurring and causing damage to the scheme; how we could have the right policies to prevent corruption and help farmers gain the utmost benefits. They were not to pinpoint any wrongdoers at all.
The first study was done during the Thaksin Shinawatra government, looking into the rice mortgage scheme it had introduced. It was initiated by one of the NACC member, Methee Krongkaew, who viewed that the NACC should work also on prevention as addressed by its law. So, we started looking at the government’s intervention measures in key crops, including rice, because we had learned that corruption was already rampant. (During the Thaksin government in 2005, the policy shifted extensively as it allowed a large volume of rice to be mortgaged with the government – nearly 9 million tonnes – with the prices set higher than market price.)
The study led to prime recommendations that the government should not intervene in the market in such a way that was deemed open to corruption. Instead, it should introduce a price-guarantee scheme to farmers, under which differences in the rice prices would be compensated by the government – giving compensation for price shortfalls directly to farmers. With this, the government would not have to bear a number of burdens, such as taking care of rice stocks and distribution, and so on.
In the second study, which was supported by the Thailand Research Fund, we focused on the Yingluck government’s pledge that it would introduce the scheme again and it would take almost every grain of rice. (During the Yingluck government’s scheme, introduced in 2011, about 25 million tonnes was included.) Our goal is to find right policies that help prevent corruption.
WHAT DID YOU FIND YOU IN PARTICULAR IN THE SECOND STUDY?
We learned about corruption in every step of the scheme – from farmers to rice distribution. But our focus was on rice distribution in particular, as [we could apply scientific methods] to prove our assumptions, and account for the damage.
To look at irregularities in the government-to-government deals, I asked for the statistics on rice exports under the scheme from the Customs Department, and learned that only around 200 tonnes of rice had been exported. The government had claimed that it had exported over one million tonnes of rice of the first scheme year already. We also found out a lot more – including the take-over of controls of reports on rice exports, so that the government could conceal or control the facts.
The other exciting fact concerned the massive loss of stocks of rice during 2013-2014. As much as 3 million tonnes of rice disappeared, and that led to discoveries of the tricks applied. Eventually, we calculated the damage caused in the scheme was around Bt500 billion.
HOW HAVE ALL THESE REFLECTED FLAWS IN POLICY BEEN ADDRESSED?
As you can see, this is all about policy-making, and it prompted me to question why they came up with such the scheme in the first place.
Why every grain of rice? Why pay Bt 15,000 per tonne to farmers? If you can recall another policy that was introduced almost at the same time, you will understand. It’s the Bt300 daily payment increase for labourers. These two policies helped Pheu Thai win a landslide election.
And if you win the election, you then can do what you wish next, so we later saw the fierce push for an amnesty bill that would yield benefits to Khun Thaksin.
I think they did not think of the damage that these policies would cause – although they may have thought they could handle it
I think these two policies were there to bluff the Democrats, who had introduced something different, but they became more and more appreciated by farmers. Saying that every grain of rice will be taken and you will get Bt 15,000 at least is a very strong and powerful message; one that people understand right away.
Politically, they won over both the rural middle class and the poor farmers. The Bt300 labour payment increase policy helped them win the labourers in the city. But they did not think or care about the impacts that followed.
WHAT CAN WE LEARN FROM THESE POLICIES, AND HOW SHOULD WE PUT IN PLACE SOUND POLICIES FOR THE PUBLIC FROM NOW ON?
Simply put, these are the policies that fail, and have flaws. They totally lack governance, and are not subject to accountability and transparency at all. We need to correct this. It’s true that you need to garner votes, but you cannot spend the state budget to serve political interests.
The new charter has addressed how to fix this … but I think the most effective way is to consider how can we make people learn and become aware of flawed populist policies and corruption. This can be started with practices on the ground.
The land tax is one of the best ways to start, in my view, as people would learn about their shares and benefits and learn how to protect their best interests. They will follow how the money collected from them is used in their localities. This is people’s true participation in policy addressing and scrutinising. What is written in the charter will become meaningless if we cannot make it happen in real life.