A simpler way to help farmers?

I cannot help joining my farming compatriots in an early celebration on hearing the "good news", that they will be out of debt in two years – thanks to the government’s generous rice pledging scheme and, in particular, commerce permanent secretary Watcharee Wimuktayon.

The new head of the Commerce Ministry is the first and only person in the government camp to show such confidence in the merits of the controversial scheme, and to pronounce that it will wipe out the debts of our poor farmers if the scheme is continued for another two years.

These is a courageous statement and, as such, she deserves to be commended for having the courage to speak out.

Watcharee Wimuktayon (File Photo)

Mrs Watcharee is wholeheartedly in support of the scheme – which is not surprising at all for a top-ranking bureaucrat these days. How could they say otherwise?  She claimed that 15 million farmers in this country stand to benefit from the scheme, people who would otherwise have been taken advantage of by rice millers who would have kept down the price paid for their paddy.

The earnings received by farmers from the scheme, amounting to about 200 billion baht, will push up our Gross Domestic Product by 0.2%, Mrs Watcharee said. 

Dismissing the arguments of a group of academics and students from the National Institute of Development Administration (Nida) who are contesting the constitutionality of the rice pledging scheme, the commerce permanent secretary said the populist policy accords with Article 84(8) of the constitution, which stipulates that the state must protect the interests of farmers. The rice scheme, she insisted, has improved farmers’ livelihoods.

There is no question that the scheme has benefitted farmers, at least in the short run.  But what is so disturbing about this scheme is that it is not the farmers who are the only beneficiaries, there are many others who have benefitted from the scheme – and have probably eaten the largest chunk of the cake. 

The scheme is badly flawed.It is full of holes and loopholes making it possible for corrupt politicians and officials, unscrupulous millers, cheats and rice smugglers to steal from the farmers. Cheap rice from Burma and Cambodia has been smuggled into the country to cash in on the generous scheme. Landlords who did not sweat in the fields but instead rented their land out to farmers have benefitted from the scheme. 

There is no problem if the farmers stand to benefit the most, with the leftovers shared by all the vultures. The fact is that this is not the case.

And if the rice pledging scheme can wipe out all or most of the farmers’ debts in the next two years, as claimed by the commerce permanent secretary, my question is: why bother with the scheme at all; why not just focus on settling farmers’ debts directly?

In which case, the government would not have to allocate as much 400 billion baht to support the scheme, and allow the cheats and the corrupt to cash in on it;  there would not be smuggling of rice from neighbouring countries for sale to the government; there would not be a huge stockpile of unsold rice, and Thailand would still be the world’s biggest rice exporter. So why not opt for the simple approach to settle farmers’ debts? 

It is most probable that the pledging scheme will not solve farmers’ debts. Instead, it will ruin Thailand’s foreign rice market and undermine the domestic rice industry. The worst prospect is that it will substantially increase our public debt,  and so leave everyone of us heavily indebted.

The commerce permanent secretary said she would discuss with rice traders ways to speed up rice exports for the last quarter of the year, in order to make space in the warehouses for the new harvest. 

Without any big government-to-government rice deals being inked, and with exporters reluctant to buy rice at distorted prices as evidenced by the failure of two rice auctions, one may wonder aloud, how will the Commerce Ministry be able to clear out the huge rice stockpile in a short time.

So, again, why not opt for the simple approach and concentrate on settling farmers’ debts directly? 

About the author

Writer: Veera Prateepchaikul
Position: Former Editor