The country's rice subsidy programmes covering 15 harvests over 11 years have caused massive losses of 680 billion baht, with 518 billion incurred from the Yingluck Shinawatra administration's rice pledging scheme, says the Finance Ministry.
A farmer uses machinery to harvest paddy in Phitsanulok province. A government fact-finding subcommittee says of the 15 rice subsidy programmes over the past 11 years, four were pledging schemes initiated by the Yingluck Shinawatra government that incurred total losses of 518 billion baht. TAWEECHAI TAWATPAKORN
Finance permanent secretary Rangsan Sriworasart, chairman of the subcommittee inspecting the accounting of several governments' rice subsidy schemes, yesterday revealed the results of the 15 harvest programmes initiated over 11 years, from 2004 to May this year.
Those schemes have caused the country to suffer huge losses of 680 billion baht from total costs of 1.1 trillion to buy 85 million tonnes of paddy.
The subcommittee will report its results to the Rice Policy and Management Committee, where Prime Minister Prayut Chan-o-cha serves as chairman.
Of the 15 rice subsidy programmes, four are rice pledging schemes initiated by the Yingluck government with total losses of 518 billion baht.
Rangsan: Subsidy schemes flawed
As of May 22, sitting in warehouses were some 19.2 million tonnes of milled rice valued at 220 billion baht, with an estimated price for 5% white rice of 11,700 baht per tonne, said Mr Rangsan.
"This accounting result will be compared with the rice stock investigation of Prime Minister's Office Minister ML Panadda Diskul on how much actual rice is in stock and how much is substandard and rotten," he said.
As of today, the value of substandard rice equals 33 billion baht, with a deduction in depreciation value by 10% in the first year, 20% in the second, 30% in the third and 40% in the fourth.
"The resulting financial loss from all these rice schemes comes out close to what we estimated earlier," said Mr Rangsan.
"We must admit that such a massive loss was caused by the programmes' implementation and processes, which were not prudent and paved the way for non-transparent practices and fraud."
He said losses from the rice schemes would be paid off through the annual budget. However, since the loss is so massive, the government plans to issue long-term bonds to extend the debt payment period.
Deputy Prime Minister MR Pridiyathorn Devakula said the glut of rice sitting in warehouses had affected domestic rice prices for three years, and this problem would take time to solve.
"I really feel sympathy for the Commerce Ministry," he said.
The market price will be affected if it releases the rice stock too quickly, while prices will be discounted if it sits for too long in warehouses."
The Finance Ministry recently decided to issue a 30-year bond partly to refinance debt incurred from the rice subsidies of previous governments.
The 30-year bond will account for a maximum of 10% of the debt, while the principal and interest will be paid for by the annual budget.
The ministry has already set aside 39 billion baht in the present fiscal budget to pay the principal.