Former deputy prime minister and finance minister Pridiyathorn Devakula issued an open letter to Prime Minister Yingluck Shinawatra yesterday, calling on her to scrap the rice-pledging scheme for causing huge losses to the state.
Former finance ministerMR PridiyathornDevakula shows an open letter calling on the government to scrap the controversial ricepledgingprogramme during a seminar at Chulalongkorn University yesterday. SOMCHAIPOOMLARD
"There's never been any government project which has caused a massive loss like this government's rice-pledging scheme," he told a seminar to mark the 100th birthday of Puey Ungphakorn, former governor of the Bank of Thailand, at Chulalongkorn University.
Based on information from state agencies, private rice business operators and his own surveys of rice farmers, MR Pridiyathorn, who is also known by his nickname "Mom Oui", said the government bought a total 48.8 million tonnes of rice during the past two crop years of 2011/2012 and 2012/2013.
The scheme has cost the government 600 billion baht, he said. If the government can sell all of the pledged rice stockpiles by 2015, it would realise losses of at least 425 billion baht _ 205 billion baht from the 2011/2012 crop and 220 billion from the 2012/2013 crop, he added. The losses would increase if the stockpiles could not be sold by 2015.
MR Pridiyathorn said of the 425-billion-baht budget loss, only 210 billion baht of this actually reached farmers while more than 115 billion baht went to other people.
In addition, only 2.16 million farmer households benefited from the scheme while the remaining 1.84 million families made no gain, he said.
MR Pridiyathorn noted it was clear there have been a lot of "budget leaks" under the scheme.
For example, in the first year of the scheme he said the government set aside a 341-billion-baht budget to buy rice with 15% moisture content. The government spent up to 337 billion baht or 98.5% of the total budget despite most of the rice having moisture content of 18% and above, for which price deductions must be made, he said.
As a Thai citizen, MR Pridiyathorn said he has monitored the rice-pledging scheme out of concern for possible huge losses to state coffers from corruption.
He said when the programme was launched in 2011, the prime minister may not have realised that it would cause such enormous losses.
But time has proven that government agencies have failed to prevent graft in the programme, MR Pridiyathorn said.
The former finance minister said the prime minister would be letting the country down if she let the rice project continue into its third harvest year.
"With the facts about the project apparent, if the prime minister still believes people around her and allows the project to continue into 2014, it means she is consciously letting public administration continue in a way that causes substantial damage to the national budget," he said.
MR Pridiyathorn said instead of buying up all the rice supplies and crippling the trading ability of private businesses, the government could pay the difference between the market and the reference prices. This would prevent unnecessary losses from stockpiling and put money directly into farmers' hands, he added.
"It's not too late for the prime minister to review this policy. It's not too late to cancel the rice-pledging project and implement direct differential payments instead. Set a maximum amount of compensation to be paid to each household. Set the rules so that the money reaches the poorest households too. If the PM can do this, then she deserves her prestigious position," MR Pridiyathorn said.
Niphon Puapongsakorn, a distinguished fellow at the Thailand Development Research Institute, estimated the government had now lost about 280 billion baht from running the rice scheme for the first three crops.
The accounting loss could go up to 400 billion baht if the stocked rice is kept for five years and to 530 billion baht if stored for 10 years, he said.
It is impossible to sell the 17 million tonnes of rice in the stockpile within 10 years, he warned.
Ms Yingluck responded yesterday that she has yet to see MR Pridiyathorn's letter. She said the Commerce Minister will explain the issue and agencies concerned have yet to finalise the loss figures.