The government has bowed to the private sector's calls for rice auctions to speed up releasing its massive stocks.
But it remains committed to going ahead with existing secret sales of rice and government-to-government (G-to-G) contracts despite repeated calls by businesses for the government to scrap untransparent and inefficient methods.
Sompong Kitireanglaro, president of rice exporter Ponglarp Co, said the government should reinstate common rice auctions instead of selling its stocks to single private firms under secret deals.
"The secret method will eventually lead the government to go bankrupt," he warned. "The better way is to allow all rice exporters to bid for state stocks, which will generate much lower losses."
Mr Sompong said auctions should be held every week for not more than 50,000 tonnes and shipments should be made within two months, with exporters required to place deposits equivalent to 5% of the shipments.
Once rice has been shipped, exporters need to show authorities their export invoices.
Commerce Minister Boonsong Teriyapirom, who called a meeting with 13 rice exporters yesterday, said the government has agreed to use common rice auctions and would assign the Foreign Trade Department to work out criteria and conditions.
He said auctions would be implemented once the government's panel has finished its rice stock survey.
Nonetheless, Mr Boonsong insisted the government would continue selling its rice on a G-to-G basis as this method allows the government to sell rice in huge lots of millions of tonnes.
He said auctions meant the government failed to sell rice in large quantities and the offered prices via bidding also varied.
The ministry has called five auctions for 600,000 to 700,000 tonnes since the government implemented the rice pledging programme in 2011, but it sold only 200,000 to 300,000 tonnes.
The government recently accepted it posted losses of 136 billion baht from rice pledging during the scheme's first year, as originally reported by a Finance Ministry panel.
The loss is based on all expenses in the scheme in its first year _ the 2011-12 crop year _ including management costs, interest expenses and the estimated value of remaining rice stocks.
The calculated price was based on the lowest market price on the closing date of Jan 31.
In the scheme's first year, the state spent 352 billion baht on 21.7 million tonnes of rice.
The value of the remaining rice stocks is estimated at 156 billion baht, while sales of pledged rice are estimated at 59.2 billion baht. Total losses are thus 136 billion baht.
The Rice Policy Committee has not put a figure on losses for the second year _ the 2012-13 crop season _ but the Finance Ministry panel estimated first-crop losses for the second year at 84 billion baht.
The government bought under the scheme 40 million tonnes of paddy or about 20 million tonnes of milled rice.
The ministry said it sold locally 500,000 to 600,000 tonnes of milled rice, packaged for donation to comprise 600,000 to 700,000 tonnes, and exported 6-7 million tonnes.
In a related development, Bank for Agriculture and Agricultural Cooperatives senior executive vice-president Boonthai Kaewkhuntee said yesterday that the bank will slash its minimum lending rate by 3-4% for farmers who fail to sell their rice to the pledging scheme at 15,000 baht a tonne.
Around 200,000 farmers are expected to be entitled to the rate cut, he said.