Rice mortgage scheme is unjustifiable

Thailand Development Research Institute chairman Nipon Puapongsakorn holds that PT’s rice mortgage scheme of buying rice at 40 per cent over world prices will ruin the national economy, and I agree. At such high prices, the government has become the sole buyer, so exporters have nothing to ship – but even if they did, who would buy at prices that would enable exporters to make a profit? We now sell whole rice 5 per cent broken at $550/ton, while Vietnam quotes it at $440, India at $445 and Pakistan at $470. No wonder rice exports dropped 45 per cent to 1.8 million tons between January 1-April 18 from the same period last year. 

 Thaksin shrugs off the TDRI’s objections, saying, “If exporters do not want to sell, the government can sell by itself. Many people want our rice.” But our Constitution prohibits the state from becoming a player in a private sector business – we are, after all, a strong supporter of the Asean Economic Community’s free market system. Yes, many want our rice – but not at the exorbitant prices we demand. So, dear VAT payer, out of whose pockets will the deficit be covered?

Also, as Dr Nipon points out, government-to-government deals are prone to corruption, and few such approaches remained in the world except for the Philippines and Indonesia – neither of which are corruption-free.

At the government’s mortgage prices, rice for local consumption will dry up. If the government releases rice from its stocks, either local prices will rise by 50 per cent or the mortgage scheme will run a deficit. Either way, dear reader, it’s your pocket and mine that will be making up the shortfall – along with those of other Thais, millions of whom blindly voted for Pheu Thai and even now unquestioningly follow their leader like lemmings towards the economic cliff.

I suggest that de Gaulle was right, and that it’s way past time that you and I demanded that our leaders justify their longer-term policies. I am all in favour of raising farmer incomes – but the scheme must be sustainable, not one that boosts local rice prices for the underprivileged by 50 per cent and gives our leading rice market position away to our competitors.

Burin Kantabutra

Bangkok