Officials who implement the government's controversial rice pledging scheme could be damaging the country and risk being taken to court, a senior economist from the Thailand Development and Research Institute (TDRI) has warned.
Nipon Puapongsakorn, former president of the TDRI and now a distinguished fellow at the institute, compared the case to that of the former governor of the Bank of Thailand, Rerngchai Marakanond, who was fined 185.95 billion baht in 2005 for approving currency transactions that led to the loss of billions of baht in national reserves before the 1997 economic crisis.
The Appeal Court overturned the lower court ruling last year, though the central bank has since lodged an appeal with the Supreme Court.
Mr Nipon's warning came as the Constitution Court is today due to consider a petition by academics and students from Thammasat University and the National Institute of Development Administration (Nida) calling on the government to halt the controversial pledging programme.
The petition claims the rice pledging scheme is a breach of the constitution as it causes market distortions and disrupts normal trading practices.
Mr Nipon said the pledging scheme has wasted taxpayer money and destroyed the market price mechanism.
The government plans to spend as much as 405 billion baht for the 2012-13 harvest season to cover 34 million tonnes of paddy.
Prime Minister Yingluck Shinawatra insisted that the programme is meant to help farmers.
Mr Nipon, however, argued that the rice pledging scheme provides no benefits to poor farmers at all.
"In fact, this policy has already caused poor, landless farmers to shoulder higher costs of production because farmland owners have doubled the rents [due to high mortgage prices]," he said.
Since the pledged prices offered by the government are higher than market prices, farmers are unlikely to redeem their rice. The pledged rice thus becomes a commodity that rice millers or politicians can make profit from without being held to account.
These practices have led to corruption in the scheme and destroyed the rice trading mechanism, Mr Nipon said.
"We are destroying our own market. Politicians are duty-bound to help the people, not to help any particular groups," he said.
Mr Nipon also took aim at the government's failure to provide information about its claimed exports of pledged rice in government-to-government (G-to-G) deals.
Commerce Minister Boonsong Teriyapirom earlier announced that the ministry received purchase orders for 7.3 million tonnes of milled rice from China, Bangladesh, Indonesia and Ivory Coast under G-to-G agreements.
Rice traders, however, questioned if such deals exist, as there has been no shipping activity or export records.
Chukiat Ophaswongse, the honorary president of the Thai Rice Exporters Association, said the G-to-G export figures from early this year have not even reached one million tonnes.
"China has imported 1.5 million tonnes of white rice, but from India, where the rice is about US$100 cheaper than ours," Mr Chukiat said.
Commerce Minister Boonsong, however, said he was unable to reveal details of the G-to-G deals, saying it could affect foreign relations. He said export records have not shown up because the rice has not yet been exported.
Prime Minister Yingluck Shinawatra yesterday insisted G-to-G rice agreements had been reached with several Asean countries. She said there are six such agreements with about 8 million tonnes of pledged rice sold.
She said the rice pledging scheme will conclude by the end of next year and she will then disclose the full figures.
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