Too much rice in Thailand

Real problem is overproduction & excess of rice pushing prices down. Labour wasted, used only sporadically in peak months. Poor farmers produce only 15 tonnes of rice per harvest, but are 82% of all rice-farming households.

rice plants

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Broken pledges, High prices promised with rice pledging may sound good, but loopholes and corruption depress actual payouts by Bundit Kertbundit


Almost seven years ago, 42-year-old Napa Hosrithong of Suphan Buri province was one of many rice farmers under the Thaksin Shinawatra government's pledging scheme. Even though relatively high prices were pledged, she recalls seldom receiving the full amount, as millers frequently pushed down her price. They said her output failed to meet the strict humidity level of 15%, a standard that is difficult for the average farmer to meet due to a lack of proper equipment and maintenance.

With little bargaining power, Ms Napa, who owned only four rai and rented another seven rai for a yield of 8-9 tonnes per harvest, had no choice but to return home with light pockets. However, the situation picked up last year when the previous government introduced its crop insurance programme. Middlemen were cut out, and a guaranteed price was paid directly to farmers, affording them peace of mind

"The biggest worry for farmers is the amount of rice that can be reaped each harvest, as crop destruction from unforeseeable events such as natural disasters is a big risk such as the situation with the ongoing floods," said Mrs Napa, who fears her price will now once again be pushed down by millers using the same old excuses.

The Pheu Thai government is returning to the old pledging scheme, promising to lift farmers out of their perennial plight by hiking prices through market intervention. Under the new plan, set to begin on Oct 7, the government will offer a fixed price of 15,000 baht a tonne for paddy rice and 20,000 baht for Hom Mali, significantly above market prices.

The scheme was cancelled by the Abhisit Vejjajiva government in favour of the rice insurance programme that paid cash if market prices fell below a given benchmark. Under this new pledging programme, the government will be the primary buyer of rice, paying for it through the Bank for Agriculture and Agricultural Cooperatives.

Chanchai Rakthananon, president of the Thai Rice Mills Association, has thrown his support behind the new plan, saying that hiking rice prices is the best way to help farmers, who are among the country's poorest people. He says rice pledging will pay farmers higher rates than the Abhisit government's crop insurance scheme, which lost 125 billion baht in just one year.

Yet several industry experts argue that the old pledging programme was prone to loopholes and corruption, with only 37.25% of the budget spent benefiting farmers and the rest pocketed by an exclusive group of millers, surveyors, exporters and politicians.

Niphon Poapongsakorn, president of the Thailand Development Research Institute (TDRI), said this pledging of every grain of rice from every household is improper. It will place an unnecessary burden on government coffers, as each farm household that is in desperate need produces less than 15 tonnes of rice per harvest. These farmers constitute 82% of all rice-farming households.

Other economic consequences include debilitation of crop quality and financial losses due to storage, as well as devastation to the export sector, as foreign consumers switch to rice from rivals Vietnam and India, he said. Such repercussions are better controlled under a crop insurance programme than under pledging

Dr Niphon slammed politicians who claim pledging - which he calls a subsidy scheme in disguise - is a panacea for farmers' well-being. The core problem is not so much one of low prices as it is overproduction.

TDRI economist Viroj Na Ranong said Thailand sees itself as a rice economy when in reality it is not. The rice sector contributes only 2-3% to the country's gross domestic product, from more than 4 million rice-farming households. Thailand's already excess rice supply is further exacerbated by the government's tireless promotion of farming the crop, leading to even more production and a deterioration in prices. Moreover, too much labour is wasted in the rice sector, as farmers are only needed in sporadic peak months. As soon as they have finished ploughing, harvesting and threshing, many farmers become inactive.

He proposes better management of rice production as a sustainable approach to making the sector self-sufficient along with reducing logistics costs and investing in research to improve irrigation and the quality of soil and seeds.

Farmers who are already efficient and competitive should continue to grow rice, while others should switch to other crops such as corn. Thailand must also make reservoirs effective in retaining and redistributing rainwater, which is currently not the case.

However, Ms Napa said it is not feasible for many of the farmers to switch to other crops, as their land tends to be suitable only for rice production, especially in the Central provinces of Suphan Buri, Ayutthaya, Chai Nat and Ang Thong. She suggests the government help farmers implement multiple crops so they can cash in all year round but admits few households in the lowlands could afford to do this

Even though a clear, sustainable solution remains elusive, the government should give serious consideration to these alternatives in order to prevent disruptions in the free-market system and burdening taxpayers with exorbitant costs. But for now, Ms Napa can only hope the government will see fit to restore the crop insurance programme and cut out participation by millers, thereby truly benefiting farmers.

(Source: Bangkok Post, Broken pledges, High prices promised with rice pledging may sound good, but loopholes and corruption depress actual payouts, 26/09/2011, Bundit Kertbundit, link

Rice Industry Vocabulary

loopholes - find a legal way to avoid or go around a law (ways to get around rules, while still following the rules)
corruption - (See Wikipedia on bribery, political corruption)

actual
- real; existing in fact จริง
depress actual payouts - lower the money they get (in reality)

scheme
- a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
pledged - seriously promised to do something สาบาน

millers -
rice millers (the factories that process rice and turn it into a product that can be sold in stores and markets)
strict - very careful and exact เข้มงวด

humidity
- the amount of water that is present in the air ความชุ่มชื้น
lack - does not have ขาดแคลน

proper
- actual or real จริง (พระราชพิธีพระราชทานเพลิงพระศพจริง)
maintenance - work that is done to keep something such as a building, machine, or piece of equipment repaired and in good condition การซ่อมบำรุง

bargaining - try to get a better deal from someone (for example, a better price for something you want to buy)
bargaining power - the ability to win in bargaining (and get the low price that you want) 

yield
- the amount produced per rai used in farming ให้ผลผลิตต่อไร่
harvest - the activity of collecting a crop, in this case a rice crop การเก็บเกี่ยวผลผลิต
reaped - same as "harvest"

the situation picked up - the situation became better
insurance - a system that pays money to help people harmed by bad event (See Wikipedia) การประกันภัย

middlemen -
buyers and sellers between the producer/factory and the shop and final consumer
middlemen cut out - when goods go straight to the store and consumer
guaranteed - promised that they will get something, for sure
peace of mind - not worrying (being calm, relaxed)

destruction - when something is destroyed การทำลาย, ภาวะที่ถูกทำลาย
unforeseeable events - events in the future that you can't see coming (unpredictable)

natural
- found in nature (not made in a factory by humans) ตามธรรมชาติ
natural disasters - events such as flooding, storms, earthquakes, etc that cause lots of damage, death and injury

risk
- a danger, the possibility that some bad event might happen ความเสี่ยง
ongoing - happening at the present moment; continuing ไม่หยุดยั้ง, ต่อเนื่อง

plight - an unpleasant condition, especially a serious, sad or difficult one สภาพเลวร้าย
perennial plight - never-ending problem

hiking prices -
raising prices

intervention
- a situation in which someone becomes involved in a particular issue, problem, etc., in order to influence what happens การแทรกแซง
market intervention - buying and selling large amounts in a market to influence the price

fixed
price - one price that does not change

paddy rice -
rice after it has been harvested from the field ข้าวเปลือก
significantly - in an important way อย่างสำคัญ
significantly above market prices

cancelled X in favour of Y - ended activity X and began activity Y
cash - money เงินสด
benchmark - a standard that other things can be compared to and measured by

support
- help สนับสนุน
thrown his support
behind the new plan - has decided to help and support the new plan

budget
- an amount of money able to be spent on something งบประมาณ
spent - used ที่ใช้ไป

exclusive - limited to a particular person, group or thing and not shared with others แต่ผู้เดียว
pocketed - money taken dishonestly (putting the mony in your own pocket)

pocketed by an exclusive group of millers, surveyors, exporters and politicians

pledging of every grain
of rice from every household - the government is going to buy all the rice that people produce

grain - the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช

improper - not proper, not right or correct

household - a group of people, often a family, who live together ครัวเรือน
burden - a serious or difficult responsibility that you have to deal with ภาระ
place an unnecessary burden on government coffers - require more government spending than necessary

desperate need - need very much for survival
desperate - in great need; in a bad situation and will try anything to get out of the situation อย่างสิ้นหวัง อย่างหมดหวัง

households
- families or groups of people living together (economics treats this as a unit that makes decisions)

consequences - the things that happen as a result of a decision or event
debilitation - made to work less well than it could

storage
- the putting and keeping of things in a special place for use in the future การเก็บ
devastation - ruin, destruction

sector
- a part of a country's economy or business activity ภาคเศรษฐกิจของประเทศ
export sector -

consumers
- people who buy things (individuals and families)

switch
- to change เปลี่ยน
rivals - people you are competing with to achieve something that not everyone can have (scarce resources) คู่แข่ง

slammed - strongly criticised วิพากษ์วิจารณ์อย่างรุนแรง
claim - saying something is true without proving it yet

subsidy
- an amount of money that a government or organisation pays to help to reduce the cost of a produce or service เงินชดเชยที่รัฐเป็นผู้จ่ายให้

disguise
- change your appearance so that people do not know who you are, cannot identify you (by wearing different clothes, haircut, mask, beard, moustache) ปลอมตัว

core
- most important แก่น สิ่งที่สำคัญที่สุด

panacea -
a medicine to solve all problems and suffering

reality - what actually happens ความเป็นจริง
gross domestic product - the production and income of the whole country

excess
- greater than is usual; too much of something มากเกินปริมาณที่พอดี
excess rice supply - producing more rice than needed

exacerbated
- make a problem worse
tireless promotion of farming the crop

deterioration
- condition getting worse over time
deterioration in prices - prices becoming worse

sproadic -
happening sometimes, every so often (not continually)
peak - highest; the time when something is at its highest or greatest level ช่วงเวลาที่พบมากที่สุด
sporadic peak months - the highest months that only occur from time to time

ploughing
- breaking up the earth before plant
harvesting - collecting a crop from the fields การเก็บเกี่ยว
threshing - removing the covering from the rice before it is milled

sustainable - can be continued for long periods of time, without being forced to stop แบบยั่งยืน ที่ดำเนินต่อไป
approach - a particular way of doing something or thinking about something วิธีการทำให้ถึงจุดหมาย

sufficient
- enough พอเพียง
self-sufficient - able to produce enough for your own use

logistics
- the activity of transporting, storing, and tracking goods (being sent from one place to another) (See Wikipedia and previous article) การขนส่งสินค้า

improve
- to make better ทำให้ดีขึ้น

irrigation
- the process of bringing water to land through a system of pipes, ditches, etc. in order to make crops grow ระบบชลประทาน (See Wikipedia)
efficient - doing a task with no waste of time, money or energy; producing a lot using few resources
competitive
- involving competition มีการแข่งขัน

retain -
keep in one place (in a reservoir, for example)
redistribute -
after gathering it together in one place (reservoir), sending it out to different places 

make reservoirs
effective in retaining and redistributing rainwater

effective
- works well, gets the job done; producing the result that was intended ได้ผลดี

feasible - possible to do, possible to succeed at or achieve; project has a good chance of being successful ซึ่งเป็นไปได้
suitable - acceptable or right for someone or something เหมาะสม

implement
- to make something such as an idea, plan, system or law start to work and be used นำ แผนหรือนโยบายมาปฏิบัติ
afford - to have enough money to be able to pay for something มีเงินพอจับจ่าย ซื้อหา ทุนพอ
clear
- easy to understand

elusive
- difficult to describe, find, achieve or remember ซึ่งหลบหลีก, ยากที่จะหา, ยากที่จะเข้าใจ
consideration - giving careful thought to something before making a decision

alternatives
- different choices that can be made
taxpayers - people who pay taxes (who don't want to see their hard-earned money wasted) ผู้เสียภาษี

exorbitant
- (especially of prices or demands) much too large มากเกินไป สูงเกินไป
see fit to Y - decide that Y is the right thing to do and then do it

restore
- to cause a particular situation to exist again, especially a good one ฟื้นฟูสภาพ
participation - being involved in an activity (rather than merely watching it happen)

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer