Sector-wide meeting on rice price set

The Commerce Ministry has announced that it will meet next week with all those involved in the rice-pledging process – farmers, millers, traders and exporters – to discuss a new pledging price for the upcoming harvest season, which begins in November. 

The announcement came as the Anti-Corruption Organisation of Thailand (ACT) urged the government to take serious steps to tackle corruption, especially in the rice-pledging scheme.

Deputy Prime Minister and Commerce Minister Nivatthamrong Boonsongpaisal said the ministry would provide all the details on rice trading and production to the meeting’s participants. He said this would ensure clarification, balanced government spending and a satisfactory pledging price for farmers during the next harvest. 

Details provided to participants would include the forecast rice production for the 2013/14 harvest; the cost of production; the government’s fiscal status and budget for farm subsidies; rice-export figures; world supply and demand; stocks; and current market price.

Nivatthamrong said that all involved would be able to discuss the new pledging price under fair conditions and with all sides understanding the issues involved.

“The meeting is aimed at ensuring transparency and fairness for all those involved,” said Nivatthamrong. “The government would like to ensure that the Thai rice trade encounters no obstacles next year and that farmers receive a fair profit.” 

He added that the budget for the new harvest season should not exceed this year’s budget of Bt350 billion.

The minister said measures would also be put in place to reduce the cost of production for farmers and plug loopholes to stop corruption and ensure transparency at every level of the pledging scheme. 

In addition, he said that the ministry’s Foreign Trade Department would draw up a plan to auction rice being held in its stockpiles. 

Nivatthamrong said the ministry also planned to assist millers and exporters by selling paddy rice for parboiled rice production. About 2.6 million tonnes of paddy are expected to enter the government’s pledging scheme between August and September. 

Nivatthamrong also said that the Thai government was negotiating with a number of countries to sell rice under government-to-government contracts. He said that overseas proposals for such contracts were already in excess of 10 million tonnes. The ministry was therefore confident that Thailand would be able to export 8-9 million tonnes of rice this year, said Nivatthamrong.

Meanwhile, Pramon Sutivong, chairman of the ACT, said that the organisation had been following the rice-pledging scheme closely and had submitted a letter of inquiry to the National Anti-Corruption Commission and the Prime Minister’s Office. He urged the government to ensure that rice auctions could be transparent and comply with fair competition practices to avoid corruption and maximise benefits for farming communities. 

Those involved in the auction process included the government, the private sector bidders and experts from the general public enlisted to scrutinise the process, Pramon said.

“This will lead to mutual scrutiny, be it the [auction’s] terms of reference, the bidding, the setting of a median price, or the resulting bid. Bidding in government auctions should also be more transparent,” Pramon said.

 He added that there was a need for the government to clearly identify the role and responsibility of experts who acted as a “third party”. They should be in a position to blow the whistle if they believed there were irregularities in the auction process.

“It’s up to the government to demonstrate its sincerity and allow for genuine scrutiny,” Pramon said.

The government must also divulge details of the ongoing Bt15,000-per-tonne rice-pledging scheme, including how many government-to-government deals and private-sector sales had been made, he added.

ACT deputy chairperson Khunying Jada Wattanasiritham said the government was obliged to reveal more information to ensure transparency in the bidding process. While lauding the government’s “Integrity Pledge” announced earlier this week, Jada said the third-party expert would play a crucial role and needed to be knowledgeable and impartial.

Sompol Kiatphaibool, ACT vice chairman, said the difference between the market and pledging prices had created loopholes, allowing for corruption in the pledging process. He called on the government to increase transparency and to release its huge rice stockpiles, which he said would pose a financial burden on the government in the long term.