Wall around failed rice scheme starting to leak

Most people still know little or nothing about the rice pledging scheme, with the actual details fiercely guarded by a handful of officials at the Commerce Ministry, including Commerce Minister Boonsong Teriyapriom.

A rice mill worker in Ratchaburi unloads rice in a government warehouse during a visit by Commerce Minister Boonsong Teriyapirom to inspect the rice pledging scheme in October 2012.

Ask Commerce officials the following questions: How much rice is now being held in the government stockpile? How much rice has been sold under government-to-government deals, to which countries and at what prices? How much rice has already been shipped abroad and how much more is waiting to be exported?

All these questions will be met with a deafening silence from the Commerce Ministry, because every bit of information about the rice pledging scheme is deemed "top secret" and will not be made public.

That explains why the public has heard virtually nothing from the ministry for the last several months. And this is likely to continue, perhaps until the scheme finally implodes and unleashes all the nasty crawling worms.

It seems that the powers-that be in the Commerce Ministry have locked themselves in the twilight zone, where no information leaks out and nothing filters in. Completely oblivious to all criticism, most of it constructive, they believe they can ride out the storm and the public can be forever fooled.

But truth is undying, persistently non-material and defiantly resilient. Despite all attempts to clamp down on it, the truth will eventually emerge, if not through this channel, then through other channels. It seems the handful people at the Commerce Ministry in the know have overlooked the Customs Department, where some truths about rice exports have lately leaked out.

Figures from the Customs Department based on bills of lading show that in 2011 only 29,851 tonnes of rice were exported under the vaunted G-to-G deals, and in 2012 only 212 tonnes were exported to China. The Customs Department’s information contrasts sharply with the figures from the National Rice Policy Committee which, based on the Commerce Ministry’s claim, show that 7.3 million tonnes of rice were sold under G-to-G deals to Indonesia, China and Ivory Coast with 1.4 million tonnes shipped out during January-September 2012.

The Commerce Ministry also claimed to have sold 5,000 tonnes of rice to China via GSSG Import and Export Corp. The deal was reportedly handled by Siam Indica Company.

So who is telling the truth and who is telling lies about rice exports -- the Commerce Ministry or the Customs Department, which is under the Finance Ministry? I hope readers can judge for themselves.

The problem with the rice pledging scheme is not confined to the lack of buyers because the price is too high. There are other problems. There are huge stockpiles and a danger of the grain rotting before it can be sold; there's a shortage of space to store the next harvest now being bought under the scheme; and the state-run Bank of Agriculture and Agricultural Cooperatives is running out of money to buy the paddy from farmers.

The BAAC is asking for loans of up to 500 billion baht to sustain the scheme for another season, but the Finance Ministry is reluctant to provide the funding and is content to keep the loan ceiling around 400 billion baht. Without additional funding, the bank will be unable to buy all the paddy from farmers and there will certainly be an uproar if the farmers cannot sell their crops at the guaranteed prices – 15,000 baht a tonne for ordinary white rice paddy and 20,000 baht a tonne for the Hom Mali, or Jasmine rice, variety.

The problem will only get worse so long as the rice cannot be sold or exported. The alternative is to dump the rice on the local market at a cheap price to help ordinary consumers. Dumping it cheap on the international market is not possible without provoking an uproar from the other rice exporting countries. But selling it off cheaply will expose the failure of the scheme – a truth that is too embarrassing for the government to admit.

Unrealised loss for the scheme so far has been estimated at 100 billion baht for just one season. How much more of a loss can the government swallow - it's our money not the government's, after all - just to sustain this badly flawed populist scheme?

Related search: Opinion, Veera Prateepchaikul, rice pledging scheme

About the author

Writer: Veera Prateepchaikul
Position: Former Editor