Commerce Ministry, land of fairy tales

Commerce Ministry, land of fairy tales

The Commerce Ministry is quite the expert in keeping us amazed by the fairy tales it has continually pulled from its sleeves since the launch of the rice pledging scheme - which should be renamed the rice buying scheme - two years ago.

The latest "believe-it-or-not" tale concerns some of the 1,460 cheques issued to the Commerce Ministry by mysterious buyers we are told bought rice under government-to-government deals. One of the cheques is for just 80,000 baht and change.

Vicha Mahakhun, a member of the National Anti-Corruption Commission, which is investigating suspected corruption in the rice buying scheme, was quoted as having commented: "Is there anywhere (in the world) where an 80,000 baht cheque is issued as payment for a G-to-G business transaction? You can figure out by yourself whether it is a G-to-G deal or not. Which government (in the world) that would issue an 80,000 baht cheque (to settle the payment of a business transaction)?"

Yes Mr Vicha, there is at least one place where the government is engaged in a business deal worth some 80,000 baht – and that is Thailand and the party involved is the Commerce Ministry under former commerce minister Boonsong Teriyapirom.

The following is the explanation from the ministry's spokesman Wutthikrai Leeveeraphan for this amazing cheque.

He said that under the G-to-G rice deals, the buyers are required to buy the rice in the warehouse, and then make their own arrangements for transport of the grain from the warehouse and shipment to its destination. Payment has to be made for every shipment out of the warehouse, and each shipment differs and can be as little as 20 tonnes or just 50 sacks.

In other words, it's not free on board (FOB).

Mr Wutthikrait insisted that this was the normal practice in the rice trade for G-to-G deals.

Rice being unloaded at a government warehouse in Ratchaburi. With the second harvest still underway, the stockpile of pledged rice continues to grow. (Bangkok Post file photo)

Many of us taxpayers, myself included, would appreciate it very much if Mr Wutthikrai would be kind enough to name the buyer, or the government, that bought just 80,000 baht worth of rice and then shipped it overseas.

If a tonne of rice was priced at US$400, less than seven tonnes of rice could be bought with 80,000 baht. Which government would buy such a tiny amount of rice and have it shipped out of Thailand, or have it stored somewhere here to await for more tiny consignments and more cheques to be issued before it is actually loaded onto a freighter?

Not even a buyer from the deserts of Timbuktu would be that stupid, to engage in such a deal where they have to do everything themselves, when there are other means which are more convenient and less complicated -- such as using the services of a bank to issue a letter of credit and letting the seller, in this case the Commerce Ministrty, arrange for the rice to be loaded onto a freighter.

If these are the kind of G-to-G deals that the Commerce Ministry has been doing in its attempt to sell the mountain of stockpiled rice, I wonder how they will ever be able to dispose of the 18 million tones of unsold grain before it all rots?

Commerce Minister Niwatthamrong Boonsongpaisarn still owes us, the taxpayers, the full details about the rice sales under G-to-G deals made by his predecessor, Mr Boonsong - who refused flatly to part with the information for whatever reasons.

The new minister should come clean before the NACC comes up with more damning evidence about the corruption in the scheme.

And there was yet another blunt, but well intended, warning from Bank of Thailand chairman Virabongsa Ramangura, that the government should seriously rethink the rice buying scheme because it could seriously threaten the country’s fiscal position and fiscal discipline if it is continued without major modifications.

The loss from the scheme was estimated at 220 billion baht until this year, and will grow steadily the longer the huge stockpiles remain stranded at the warehouses. Discount sales may help in cutting the loss but, still, the loss will go up.

The question is how big a loss does the government need before it says enough is enough? As for the taxpayers, it is already more than enough.

Veera Prateepchaikul

Former Editor

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

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