Band-aid solutions hide real rice problems

Band-aid solutions hide real rice problems

Ex-prime minister Yingluck Shinwatra jumped on the Good Samaritan bandwagon - irking Prime Minister Prayut Chan-o-cha in the process. (Photo by Apichit Jinakul)
Ex-prime minister Yingluck Shinwatra jumped on the Good Samaritan bandwagon - irking Prime Minister Prayut Chan-o-cha in the process. (Photo by Apichit Jinakul)

It is quite heartening to see the government and private sectors come up with ways and means to help rice farmers, the so-called impoverished backbone of the country who are now in hot water as the price of rice has dropped to its lowest level in a decade. The price of Hom Mali paddy, Thailand's premium grade rice, averages 10,550 baht/tonne based on the government's credit extension scheme which helps rice farmers by setting the pledging price at 90% of the market price of Hom Mali varieties.

Well-intentioned though they may be, the projects initiated by several private entities to help the farmers appear to be of a charitable nature and short-term.

Take for example Rangsit University's initiative to allow farmers' children studying at the university to use rice to pay their tuition fees and open a market on campus on Friday and Saturday to allow farmers to meet potential buyers so they can settle rice deals without going through middlemen. I wonder how many farmers can afford to send their sons and daughters to the private university.

Then there is the case of Namsin Insurance Company which has come up with an idea to allow farmers to sell rice packs at its 29 branch offices and encourage its staff to buy the packed rice for their own consumption and as New Year's gifts.

Veera Prateepchaikul is a former editor, Bangkok Post.

PTT public company, meanwhile, will spare space at its 500-plus petrol stations throughout the country to allow farmers or farmer groups to sellpacked rice. Some have suggested this should be done on a long-term basis so farmer groups can have a channel to sell their rice, milled and packed by themselves, without going through rice millers.

Even former prime minister Yingluck Shinawatra jumped on the Good Samaritan bandwagon to give moral support to farmers in Ubon Ratchathani -- or for whatever real purpose. She is a politician and you know the nature of politicians. As a free citizen, Ms Yingluck has every right to visit farmers.

During the visit, she told the welcoming farmers that if she is once again in government, she would help all farmers, conveniently ignoring the fact she is banned from politics for five years for alleged dereliction of duty by failing to stop massive losses from her rice-pledging scheme. She also bought several packs of rice, each contains 5 kilogrammes of grain, for members of her entourage.

It came as no surprise that this stunt irked Prime Minister Prayut Chan-o-cha, who later told politicians -- without specifically naming Ms Yingluck -- to stop exploiting farmers' plight for political motives. Government spokesman Sansern Kaewkamnerd also needled her, suggesting she should not just buy five or six packs of rice for a photo opportunity, but buy rice from all farmers if she really wants to help.

The prime minister appears to have jumped the gun with his quick tongue accusing some rice millers of colluding with local politicians to suppress Hom Mali prices even before most of the paddy is harvested. His accusation pressured the Thai Rice Millers Association president and the group's entire board to resign. The prime minister apologised later and asked him to stay. But it was too late.

So, the next time he accuses anyone of doing something nasty, he should get the facts right for a start.

Let us hear from an eminent rice expert, Nipon Poapongsakorn of the Thailand Development Research Institute, about the actual cause of the Hom Mali price slump.

Mr Nipon admits there might be collusion going on to suppress the rice price, but it was not the real cause. He also criticised the way the government sent military personnel and officials to check warehouses of rice millers suspected of involvement in price collusion as unreasonable.

He blamed panic price speculation by exporters as the actual cause of the price slump. He said some exporters had clinched forward rice deals with overseas customers by setting the future price at US$548 (19,190 baht) per tonne for the first lot of rice to be delivered in December from the November crop, while the spot price then was $720.

Although the future price is not public knowledge, it is known among exporters, who then panicked and started making forward rice deals with their customers, further suppressing the domestic price.

Mr Nipon said price speculation among exporters and millers is a normal part of the market mechanism. But he noted any suggestion of speculation could be blown out of the water if there is a lack of reliable information. He suggested the creation of a rice futures market and a reliable system of forecasting rice production.

Mr Nipon's explanation about the actual cause of the rice price slump is further evidence that farmers have absolutely no say in dictating the price of rice. That is why they have always been at the wrong end of the rice trade and why they are always poor, while most millers and exporters just get richer and richer. Yes, there are some rich farmers, but they are landlords who lease their farmland to the landless.

The government's credit extension scheme for farmers to delay the sale of their crop, the Yingluck government's rice-pledging scheme or the Democrats' rice price guarantee scheme are or were all short-term solutions, like a pain killer to ease the aches but which does not cure the illness.

These schemes can go on year after year, but most farmers remain poor. They must think out of the box and one of the approaches is mixed farming or sufficiency farming.

As a wise man once said, do not give fish to a poor man because he will beg for more. Instead, give him a rod and teach him how to use it so that he can fish for himself and won't beg again.

Veera Prateepchaikul

Former Editor

Former Bangkok Post Editor, political commentator and a regular columnist at Post Publishing.

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