ON THE RECORD
SUNTHORN PONGPAO
Rice farmers' leader Wichian Puanglamjiak gives an insight into rice price manipulation. He talks to Sunthorn Pongpao about who stands to gain from a swing in rice prices, leaving farmers up to their necks in debt.
What has been making rice prices so volatile ?
Rice prices have been manipulated by three groups of beneficiaries - rice exporters, rice brokers and high-ranking government officials and politicians.
Rice exporters reap big profits at a time when the world is fretting about a short supply of this staple food in global markets and many rush to stock up. Nothing yields more handsome profits than buying cheap and selling high.
Rice brokers, who coordinate between millers and exporters, get fatter paychecks from profitable deals.
The last group is high-ranking government officials, politicians and members of concerned panels who received a slice of the export profits. These people broke the news about falling rice prices in world markets, prompting millers to make a quick sale. In fact, world rice prices have never fallen.
Local paddy prices went up to 2,500 baht per sack during the boom in rice prices and then slipped to 1,950 baht due to manipulation. When the domestic market realised there was such manipulation going on, the price bounced up to 2,250 baht.
Who gains from such manipulation?
Exporters, middlemen and high-ranking officials. You can check whether merchants who have connections with a certain cabinet minister have benefited from rice deals and price manipulation.
Who stands to lose from price manipulation ?
 |
| Wichian Puanglamjiak, a key member of the Thai Farmers Association, talks about the manipulation of rice prices and farmers being the last to benefit from the commodity's rising value in world markets. — SUNTHORN PONGPAO |
Farmers took severe blows. Price manipulation made the rice price drop to less than 10,000 baht a tonne, while farmers had to shoulder rising investment costs, which jumped to 6,500 baht per rai due to the rising price of grains, chemicals, fuel, harvesting and transporting, not to mention four months of hard work.
Also, rice crops produce a mere 700-900kg/rai, which means revenue from rice sales per rai can hardly cover the cost. This makes poor farmers poorer.
Millers have also felt the pinch. Brokers and exporters offered low purchase prices and paid in credit. To keep their business afloat amid low profit margins and a liquidity crunch, millers paid less to farmers.
How can the government help ?
A quick fix is a mortgage scheme. This way, price intervention could immediately put an end to price manipulation.
Under the scheme, paddy price should be guaranteed at 14,000-15,000 baht a tonne, without a mortgage ceiling. Every rice variety of the same moisture level should get the same price.
The government could also arrange government-to-government deals in order to sell mortgaged rice.
Farmer representatives should sit on a panel which decides the direction of international trade and local production so farmers have an idea what local and international markets want.
How can price manipulators be punished ?
There is no legal evidence to nail them. Rice price manipulation deprives farmers of their rights and is a threat to the country's economy. The government should amend related laws to be able to bring these wrongdoers to justice.
How is a farmer's livelihood these days?
Nothing but poverty and debts. Farmers are not lazy people, but they have been taken advantage of.
You need not hire any surveyor to calculate the number of indebted farmers. Just check the number of farmers who borrow money from banks, and then double that figure to include farmers who take loans from loan sharks. By doing this, you will get a rough figure of how many indebted farmers there are in this country.
Nature has also been unkind to farmers, through both insects and natural disasters.
One farmer in Ayutthaya's Bang Ban district hung himself in 2006 after floods wiped out his farmland. Another farmer in the province's Sena district shot himself this year after pests ravaged his paddy fields.
How many farmers have to die because they succumb to poverty and debt? However, farmers around the country are getting stronger these days and we will join together to fight and protest for justice.
In what areas do you want the government to help farmers ?
First and foremost is land ownership. Half of the farmland has fallen into the hands of investors and farmers became hired labourers.
Other areas the government could help in are improvements in irrigation systems, price guarantees, a cut in oil and chemical prices, welfare for retired farmers and compensation for damage from natural disasters.
Prev
1
2
3
4
5
6
7
8
9
10
11
Next
