ADB: Govt rice policy disrupts world rice markets

Better to invest in R&D to cope with climate change & cooperate to build Asean rice reserve.



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Economics
AGRICULTURE

ADB scoffs at rice cartel suggestion

5/09/2012
Parista Yuthamanop

Massive global supply will prevent rice prices from soaring even as Thailand continues its paddy pledging and India restricts its exports, says the Asian Development bank.

Lourdes Adriano, lead agriculture specialist, called on Thailand to consider its global responsibility as a major rice exporter when contemplating the idea of forming a rice cartel.

The Thai government has accumulated 10 million tonnes of paddy from its pledging programme this year, causing storage problems as warehouses fill to the brim.

Commerce Ministry employees have floated the idea of setting up a rice cartel, but Ms Adriano said such a scheme is impractical as countries are likely to compete with one another and the supply of rice is uncontrolled.

''Asean should step in if any countries consider pursuing a rice cartel. This is not a regional issue but a global responsibility. A cartel will not benefit any exporters, nor any other countries in the world. It's a zero-sum game,'' she said through a video conference.

Ms Adriano said the Thai government's rice pledging programme not only incurred a fiscal cost from the massive subsidies, but also threatened to disrupt the thin supply volume in the world market.

''A better idea is to facilitate trade and export to needy countries, investing in infrastructure that reduces the cost of marketing and the post-harvest process, as well as R&D to cope with the effects of climate change,'' she said.

The Thai government might consider contributing the paddy to the stockpile of the Asean+3 (including China, South Korea and Japan) reserve pool, as the existing amount of 750,000 tonnes could barely meet demand in case of a supply disruption, she added. ADB estimates 1.2 million tonnes is a suitable reserve size.

Ms Adriano said a high global stockpile will prevent rice price increases in the world market even if Thai exports were squeezed by the pledging scheme and India continued to ban exports.

Rice prices are unlikely to fall as increasing production cost from fertilisers, oil and water dampen incentives for Asian farmers to produce more rice, although the supply in Myanmar is expected to rise, she said.

Asia is an important price setter for rice, accounting for more than half of supply and demand.

India has accumulated a huge stockpile since 2011, after lifting the export ban it implemented from 2008-10.

The Thai government's pledging scheme reduced the supply of rice in the export market, as exporters would not buy the grain at the artificially high prices set by the government.

India lifting its export ban prevented a steeper surge in rice prices in 2011 and this year, along with supply from Vietnam and Pakistan.

Ms Adriano said the Thai government should consider a cash transfer to compensate for the gap between its selling price of rice and the market price.

Bui Giap Minh, another ADB specialist in the agricultural sector, said paddy from Cambodia is shipped to Thailand and Vietnam for milling because it is considered low-quality and unsellable on the world market, and the country lacks post-harvesting systems. This practice also cushions against further surges in rice prices.

Crop prices overall are expected to increase this year, mainly because of gains in corn, soybeans and wheat as a result of drought in the US.

(Source: Bangkok Post, Economics, AGRICULTURE, ADB scoffs at rice cartel suggestion, 5/09/2012, Parista Yuthamanop, link


Rice Sector Vocabulary

disrupt - prevent something from operating normally; from continuing as usual or as expected ทำให้ยุ่งเหยิง, ทำให้ยุ่งยาก ทำให้เสียกระบวน, ทำให้เสียระบบ, ทำให้สับสน

cartel - a group of commpanies that agree to control prices of some good to profit more 
rice cartel

Asian Development bank (ADB) - a regional development bank for Asia started in 1966 to help in the economic development of countries in Asia, modeled closely on the World Bank (See Wikipedia)

scoff at - to laugh at something, considering it silly, ridiculous, a joke (saying things to show that you think that something is stupid and deserves no respect)
suggestion - when you tell a person what you think they should do

ADB scoffs at rice cartel suggestion

massive - in very large amounts
global - throughout the world; all over the world, including the whole world ทั่วโลก  ทั้งโลก
massive global supply

soar -
increase or go up suddenly and qSuickly
revent rice prices from soaring

paddy
- rice after it has been harvested from the field  ข้าวเปลือก
paddy pledging - the government system of guaranteeing rice farmers a higher price for their rice

Massive global supply will prevent rice prices from soaring even as Thailand continues its paddy pledging and India restricts its exports, says the Asian Development bank.

lead -
the head or first person in a group; the one who leads the group; the leader
lead agriculture specialist


called on
- ask someone to do something

responsibility - something you have to do (because it is part of your job or the right and moral thing to do)
global responsibility

contemplating
 - thinking about doing something
contemplating the idea of forming a rice cartel

Lourdes Adriano, lead agriculture specialist, called on Thailand to consider its global responsibility as a major rice exporter when contemplating the idea of forming a rice cartel.

accumulated -
gathering and collecting something (so that amount grows bigger over time)
accumulated
10 million tonnes of paddy

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

brim - the edge of a container
fill to the brim - fill to the point it is full (cannot take anymore)

causing storage problems as warehouses fill to the brim

The Thai government has accumulated 10 million tonnes of paddy from its pledging programme this year, causing storage problems as warehouses fill to the brim.

float idea - propose an idea to talk about (mention an idea for consideration and possible use)
floated the idea of setting up a rice cartel

scheme
- a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
impractical - an idea that does not work in the real world, not practical ไม่เหมาะสมในทางปฏิบัติ ซึ่งไม่มีประสิทธิภาพเมื่อนำมาใช้งานจริง,ที่ใช้งานไม่ได้
such a scheme is impractical 

Commerce Ministry employees have floated the idea of setting up a rice cartel, but Ms Adriano said such a scheme is impractical as countries are likely to compete with one another and the supply of rice is uncontrolled.

step in - when person outside a situation (or diagreement, conflict, argument, fight) comes in to help solve problems and end differences

issue - a subject that people discuss or argue about; a problem that needs to be considered ประเด็น
regional issue

global responsibility


benefit - to get help or an advantage from something ผลประโยชน์

sum
- an amount of something, especially money จำนวนเงิน
zero-sum game - a situation in which only one person wins or benefits
win-win game -
a situation in which all can gain and benefit

''Asean should step in if any countries consider pursuing a rice cartel. This is not a regional issue but a global responsibility. A cartel will not benefit any exporters, nor any other countries in the world. It's a zero-sum game,'' she said through a video conference.

fiscal - related to government spending; connected with the government budget, i.e., public money เกี่ยวกับงบประมาณ
incurred a fiscal cost

massive
- very large in size, amount or numberใหญ่โต  มหาศาล
subsidies - when the government pays part of the cost of some activity to encourage it เงินช่วยเหลือจากรัฐ เงินสนับสนุน
massive subsidies

threatened - create a danger of something bad happening
threatened to disrupt

volume - the quantity or amount of something
the thin supply volume in the world market

Ms Adriano said the Thai government's rice pledging programme not only incurred a fiscal cost from the massive subsidies, but also threatened to disrupt the thin supply volume in the world market.

facilitate - help; to make it possible or easier for something to happen  ทำให้ง่าย ทำให้สะดวกขึ้น
trade - the buying and selling of goods การค้าขาย
facilitate trade

needy - poor; not having enough money, food, clothing, etc. ยากไร้
needy countries
export to needy countries

infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
investing in infrastructure

harvest - gathering fully grown crops from the field เก็บ เก็บเกี่ยว การเก็บเกี่ยวผลผลิต
post - after
post-harvest - after harvest 

process (verb) - a series of actions that you take in order to achieve a result แนวทางปฏิบัติ, กระบวน, วิธีการ
processing (noun) - the activity in a factory when some input good is "processed" to produce an output good
post-harvest processing

R&D - research and development

cope - to deal successfully with a difficult problem, situation or job successfully รับมือกับ
cope with

climate
- the general weather conditions usually found in a particular place สภาพอากาศ
climate change - (See Wikipedia)

''A better idea is to facilitate trade and export to needy countries, investing in infrastructure that reduces the cost of marketing and the post-harvest process, as well as R&D to cope with the effects of climate change,'' she said.

Asean+3
- Asean plus Asian countries China, South Korea and Japan

reserve - kept for use for something or someone; something currently not being used but that can be used when needed ที่จัดสรรไว้ สำรอง สำรองไว้
pool - when many people put together what they each have to share and use together
reserve pool - a group collection that everyone puts into and uses

stockpile - large quantities of goods stored for future use คลังสินค้า  จำนวนสินค้าที่เก็บตุนไว้เป็นจำนวนมาก
contributing the paddy to the stockpile 
the stockpile of the Asean+3 (including China, South Korea and Japan) reserve pool

demand - the need and desire of customers to buy goods and services
meet demand -
have enough supply for everyone who needs the good

barely
- almost not happening แทบไม่เคยเกิดขึ้น
barely meet demand - almost not have enough

disruption - prevent from operating normally; a situation in which something cannot continue because of a problem การขัดขวาง, การหยุดชะงัก

could barely meet demand in case of a supply disruption

suitable
- right for a situation; acceptable or right for someone or something เหมาะสม
suitable reserve size

estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า
ADB estimates 1.2 million tonnes is a suitable reserve size

The Thai government might consider contributing the paddy to the stockpile of the Asean+3 (including China, South Korea and Japan) reserve pool, as the existing amount of 750,000 tonnes could barely meet demand in case of a supply disruption, she added. ADB estimates 1.2 million tonnes is a suitable reserve size.

squeezed - reduced
exports were squeezed by the pledging scheme

ban - an official statement ordering people not to do something ห้าม การห้าม   ห้ามอย่างเป็นทางการ
India continued to ban exports

Ms Adriano said a high global stockpile will prevent rice price increases in the world market even if Thai exports were squeezed by the pledging scheme and India continued to ban exports.

a price setter - when a company (country or region) has power in a market and can determine through their actions the price the good is sold at
fertilisers - chcmicals or natural substances that help plants grow, food for plants (See Wikipedia)

dampen
- decrease and make less, reduce intensity ทำให้หดหู่
incentives - a reward to encourage people to do something สิ่งกระตุ้น  รางวัล ผลตอบแทน
dampen incentive - decrease the rewards for doing some activity (to make it less attractive, make people less likely to do it)

expected - believe will happen คาดว่า (จะเกิดขึ้น)
the supply is expected to rise

Rice prices are unlikely to fall as increasing production cost from fertilisers, oil and water dampen incentives for Asian farmers to produce more rice, although the supply in Myanmar is expected to rise, she said. Asia is an important price setter for rice, accounting for more than half of supply and demand.

implemented - when a plan is put into action, actually doing the things in a plan
grain - 1. a crop like rice or wheat; 2. the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช

artificial - not what it naturally would be (if markets were allowed to function as they normally do)
artificially high prices
exporters would not buy the grain at the artificially high prices

India has accumulated a huge stockpile since 2011, after lifting the export ban it implemented from 2008-10. The Thai government's pledging scheme reduced the supply of rice in the export market, as exporters would not buy the grain at the artificially high prices set by the government.

surge - to increase very quickly เพิ่มขึ้นอย่างรวดเร็ว
steeper surge -
a quicker and more sudden increase

steeper surge in rice prices
prevented a steeper surge in rice prices

India lifting its export ban prevented a steeper surge in rice prices in 2011 and this year, along with supply from Vietnam and Pakistan.

cash - money เงินสด
transfer - to official arrange for someone else to be the owner of something โอน
cash transfer - sending money from one bank account to another bank account

compensate - pay for a loss or damage; pay money to someone after they have been harmed or damaged by a bad event
compensate for

gap - the distance or difference between two things ช่องว่าง
gap between selling price of rice and the market price

Ms Adriano said the Thai government should consider a cash transfer to compensate for the gap between its selling price of rice and the market price.

sector - a part of the economy ภาคเศรษฐกิจของประเทศ (public sector = government, private sector = all businesses, household sector = families and consumers, banking sector,...) (See Wikipedia)
agricultural
sector

harvesting - collecting a crop from the fields การเก็บเกี่ยว
harvest (noun)  

post-harvest -
after the harvest of crops 
post-harvesting
systems - machinery to process crops after they are taken from the field (to put into form that can be sold)

practice
- something that people do regularly; a way of doing something การปฏิบัติ
cushions against further surges in rice prices

Bui Giap Minh, another ADB specialist in the agricultural sector, said paddy from Cambodia is shipped to Thailand and Vietnam for milling because it is considered low-quality and unsellable on the world market, and the country lacks post-harvesting systems. This practice also cushions against further surges in rice prices.

drought - a period of time when there is very little rain and water available ความแห้งแล้ง  (See Wikipedia)

Crop prices overall are expected to increase this year, mainly because of gains in corn, soybeans and wheat as a result of drought in the US.

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer