Rice scheme losses may top B700bn
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Rice scheme losses may top B700bn

The Finance Ministry will close the rice-pledging scheme's account on Nov 13 but whether the loss will exceed 700 billion baht depends on how to book lost grain.

Of 18 million tonnes of paddy in state stock at present, 1.8 million were of good quality, 12.6 million of low quality, 900,000 of deteriorating quality and 100,000 were lost grain, Rungson Sriworasat, chairman of a subcommittee in charge of closing the account, said on Monday.

A ministry source also said the Federation of Accounting Professions, whose members sit on the subcommittee, wanted to change the valuation method based on quality to real losses.

It wants to book good-quality rice at a certain price level, such as a little over 10,000 baht a tonne, while the price of deteriorating paddy could be set at less than 5,000 baht.

The group wants to book lost grain as a loss while the portion which is under sale contracts but has yet to be delivered should be booked based on its quality.

The method will result in the loss from the programme jumping beyond 700 billion baht, the source said.

It also recommended the loss be put on a separate account and a law passed for the government to borrow by issuing 30-year bonds.

The law should clearly spell out the government will pay interest and principal for the debt every year to restore confidence among investors and ratings agencies.

Earlier, the same method was used to clear the 1.4-trillion-baht debt incurred after the 1997 financial crisis.

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