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Rice policy corruption

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Revival of past rice policy will create opportunities for middleman rice millers to profit, not the small farmers who need help. 

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Pheu Thai rice policy 'ripe for corruption' by Parista Yuthamanop


The Pheu Thai Party's proposal of reverting to a previous rice mortgage policy with a high premium from existing rice price guarantees could incur huge fiscal damage and open opportunities for corruption by millers, says academics.

Pheu Thai said it would set rice mortgages at 20,000 baht for premium-graded jasmine rice and and 15,000 baht for ordinary paddy for all harvested amounts.

The Democrats introduced a rice price guarantee last year at 11,000 baht per tonne for farmers registered with the Bank for Agriculture and Agricultural Co-operatives, with an aim to cut leakage to millers who acted as middlemen.

Somporn Isvilanonda, an economics professor at Kasetsart University, said both systems could stymie farmers' enthusiasm to reduce costs and improve yields. But the mortgage system is vulnerable to various types of corruption by millers, such as faking rice stocks, mortgaging low-quality rice and collecting premiums from farmers. It could also subdue rice prices as traders would anticipate the sale of huge rice stocks.

Assoc Prof Somporn said the rice mortgage system used to be a good tool to assist farmers who have an oversupply of rice, as it offered market price or slightly above. But the expansion of premiums and amount of mortgages by previous governments resulted in widespread corruption. The government later sold rice in the stock at a low price to millers.

The role of the millers as middlemen resulted in just 1 million out of 4.7 million agricultural households receiving benefits from the state, he said

Assoc Prof Somporn, who sits in the rice committee, said that both systems used a similar amount of money, but the fiscal money went directly to all registered farmers for the price guarantee programme. The rice mortgage with a high price would decrease competitiveness for rice exports, he said.

The Abhisit Vejjajiva government, however, failed to encourage farmers to reduce costs due to its promotion of weather insurance and agricultural futures transactions. The insurance programmes encouraged farmers to grow more rice and harvest more quickly, thus the quality of rice tended to decline, he said.

The National Anti-Corruption Commission is investigating fiscal damages from the sales of crop stocks under the government's mortgage programme. It might pick up the issue as a priority if the mortgage is reintroduced, Assoc Prof Somporn said.

Ammar Siamwalla, an honorary scholar of the Thailand Development Research Institute who advised the previous government on the rice price guarantee, said Pheu Thai would fail in its attempt to push up the rice price, as it would be depressed by huge stockpiles and increase new rice supplies.

Unlike shares, the rice price could not be propped up by buying big lots.

Pheu Thai's policy may prove a success over the first four months of the administration, but the government would have to spend unlimited fiscal funds in trying to achieve this, Dr Ammar said

He also said the country would be put at risk of fiscal instability if Pheu Thai party implemented all campaign promises.

He said the Democrats should focus their campaign on the likely impact of Pheu Thai's economic plan, rather than defending state officials' role in the crackdown of last year's red-shirt protests

(Source: Bangkok Post, Pheu Thai rice policy 'ripe for corruption', 29/06/2011, Parista Yuthamanop, link)

policy - a set of plans or action agreed on by a government, political party, business, or other group นโยบาย a plan of action to guide decisions and achieve outcomes (See Wikipedia)
corruption - (See Wikipedia on bribery, corporate corruption, and political corruption)
ripe for corruption - corruption is likely in this situation

rice mortgage policy -
the old system of protecting from changes in agricultural prices
rice price guarantees
- the new system for protecting from changes in agricultural prices

mortgage - a legal agreement in which you borrow money from a bank in order to buy a house, build something, develop a piece of land, etc.การจำนอง
guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน

proposal - a plan or suggestion for a group to consider ข้อเสนอ
revert - go back to what existed before (policies of the past)
premium - additional amount paid (beyond the normal price)
incur - having to pay an amount of money (examples: incur costs, incur expenses, incur liabilities)
fiscal - related to government spending, connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
opportunities - a situation where it is possible to do something that you want to do
rice mill - a factory that makes rice ready for sale in stores (processing and packaging in bags)
millers - owners of rice mills
academics - professors and lecturers at universities and colleges

paddy - rice after it has been harvested from the field  ข้าวเปลือก

registered - officially recorded as a business with the government  
aim - purpose; goal เป้าหมาย จุดมุ่งหมาย the thing you hope to achieve by doing something
leakage - money that disappears and is taken by people before it arrives at its destination (an intended use)
middlemen - people between the factory and producer and the consumer or customer พ่อค้าคนกลาง

stymie - stop something from continuing (or make it difficult to do)
enthusiasm - being very interested and involved in an activity
stymie enthusiasm - make people less enthusiastic and interested in doing something

improve - to make better ทำให้ดีขึ้น
yields - how much crop a farmer gets from farming one hectare of land ผลผลิต
vulnerable - easily damaged or harmed ซึ่งถูกทำลายได้ง่าย

stocks - large amounts stored for future use
faking rice stocks - lieing or pretending to have more rice than you actually have

collecting premiums from farmers - collect extra amounts of money from farmers

subdue -
bring under control (example: The animal trainer brought the dangerous wild animal under control.)
subdue rice prices -
bring rice prices under control, reduce rice prices

traders - rice traders, people who buy and sell rice as a business, for a profit
anticipate - to guess that something will happen คาดการณ์

oversupply - supply of the good is greater than demand forcing down prices, to much on the market, prices drop การมีสินค้าล้นตลาด
expansion - when something increases in size, number or importance การขยายออก
widespread - happening or existing in many places, or affecting many people อย่างแพร่หลาย
stock - an amount of something that you keep so that you can use it when you need it ที่เก็บไว้ในสต๊อก
role - function or position บทบาท
households - families or groups of people living together (economics treats this as a unit that makes decisions)
benefits - money, services, or goods you receive from a government or company programme เงินช่วยเหลือ
state - government รัฐ
competitiveness - how well a business (or even whole country) can do compared to other firms (does it have lower price or higher quality?) การแข่งขัน how well a company is able to maintain or gain customers in a market

encourage - to make someone more likely to do something, or to make something more likely to happen ปลุกใจ มีกำลังใจ

insurance - a system of protection against loss, a person pays money every month (premiums) for a guarantee that the company will pay them money if they or their property is damaged or lost (See Wikipedia) การประกันภัย  
weather insurance - insurance to protect a farmer from destruction of his crops by bad weather

futures - a contract to buy something in the future, a contract that is traded on a public exchange, so the price reflects current expectations about the value of the underlying asset (See Economist Glossary on derivatives) การซื้อขายล่วงหน้า
transaction - the buying and selling of something
agricultural futures transactions - the buying and selling of futures contracts (as a form of insurance against future price changes)
harvest - gather in ripe crops เก็บเกี่ยว การเก็บเกี่ยวผลผลิต

issue - a problem that needs to be considered ประเด็น
priority - something important that must be done first สี่งที่สำคัญเป็นลำดับแรก
pick up the issue as a priority - start dealing with the issue (trying to solve the problem, and treating it as one of the most important problems)
reintroduced -
start again, after being stopped
honor
(verb) - give a person public praise and an award (for something good that they did), also spelled "honour"
honorary (adjective) - given to a person to "honor" them (for some achivement in the past) (examples: honorary doctorate, honorary president, honorary member)
scholar -
a person who studies an academic subject (history, literature, etc) and knows a lot about the subject
stockpiles - large amounts of something stored for future use กองสินค้าในโกดัง
shares - stock shares (bought and sold in the stock market)
prop up - raise, keep high and prevent from falling
prop up price -
prevent prices from falling, keep prices high
administration - one government that a country has for a period of time
funds - money needed or available to spend on something เงินทุน

risk - the possibility that something dangerous or unpleasant might happen ความเสี่ยง
put at risk of - put in a situation where a dangerous event or situation might happen
instability - unstable, can change suddenly without notice, this makes it difficult to work with

fiscal instability - 
a situation in which budget deficits start growing very large (that is government revenue from taxes is not enough to cover government spending and large amounts of money must be borrowed to pay for it), this can happen when during a recession, government spending increases while tax revenues decline, and also by sharp increases in interest rates on government debt if the sovereign debt rating falls

party - political party

implemented - when a plan is put into action, actually doing the things in a plan
campaign - a planned series of activities designed to persuade voters to vote for a particular candidate or political party การรณรงค์หาสียง
implement campaign promises - take action to carry out campaign promises (and make them reality)

focus - think about and work on one thing (rather than waste time on many), concentrate time and attention on one thing ให้ความสำคัญ
impact - an effect or influence ผลกระทบ
crackdown - strong action that someone in authority takes to stop a particular activity การใช้กำลังเข้าปราบปรามของเจ้าหน้าที่
protests - meetings, sometimes forceful or violent, or public statements by people who strongly disagree with something ชุมนุมประท้วง

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