Accumulated and potential losses from the unmodified rice pledging scheme will make it harder for the government to reach its goal of a balanced budget by 2017 and are a negative factor for Thailand's credit rating, says Moody's Investors Service.
The ratings company quoted a Bangkok Post report that losses from the scheme in the 2011-12 harvest season were bigger than the Finance Ministry originally forecast.
At the same time, authorities appear committed to continuing the scheme without adjustments.
The report, which Moody's was unable to confirm with government sources, said new estimates based on actual amounts received imply losses of 200 billion baht from the 2011-12 harvest year.
This reading is significantly higher than prior World Bank estimates that pegged losses at 115 billion baht and a Finance Ministry forecast of 70-100 billion baht, said Moody's, which earlier gave Thailand a Baa1 rating with a stable outlook.
But Vatchari Vimooktayon, the commerce permanent secretary, said the ministry does not believe the losses will be that high.
"The government has yet to complete its rice sales," she said.
"The extent of the losses has to take into account the amount of rice the government could sell, deducted from expenses."
Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong insisted yesterday that the losses from the pledging scheme were unlikely to reach 200 billion baht, but he declined to comment further on the Moody's report.