'Eat more rice' policy is a better way to go

No doubt, Commerce Minister Boonsong Teriyapirom knows many things that we don't. Fair enough. Policy-makers have their own reasons on what to keep behind closed doors and what should be discussed in public.

But I believe it is better to err on the side of transparency and disclosure. The argument of state secrets and national security is a cloak used all too often by politicians to avoid honest discussion about the merits of public policy. If the cause is just and the reasons have merit, politicians should be confident enough that the populace will understand.

Take Mr Boonsong's pledge that the government expects to sell up to 1.8 million tonnes of rice by the end of this year and another 5.56 million next year. One would think that the Commerce Ministry would be delighted to trumpet its successes in arranging government-to-government sales as proof positive that its audacious plan to revolutionise the global rice trade is working. But no, the ministry has been loathe to detail its overseas rice sales, never mind the fact that domestic warehouses are literally overflowing with rice purchased by the state under the pledging scheme.

I wonder if Prime Minister Yingluck Shinawatra and the Pheu Thai Party recall the basic economic principles championed by her brother Thaksin a decade ago. Under the "dual track" policy, boosting domestic demand and consumption went hand-in-hand with efforts to increase Thailand's role in global trade. One would think Ms Yingluck, who has essentially cornered the market on domestic rice production, would consider launching an Eat More Rice (EMR) campaign to boost demand.

Perhaps Mr Boonsong can actually meet his export targets. But eating more rice seems to be a simpler way out. If we made EMR a national policy, we could clear up the problems of our bumper crops in no time. Of some 20 million tonnes of rice produced each year, about half is eaten locally and the rest exported. With EMR, we will have less rice available for export sales, which should help push prices up. Simple supply and demand.

If all 66 million Thais do their part for the country and took up the EMR policy, I am confident that the current debate about the rice pledging scheme would fall by the wayside. Thai farmers would continue to benefit by receiving their generous price supports from the state, while increased domestic demand would end the need to spend more taxpayer funds on new silos or entertaining creative ideas such as remodelling Don Muang Airport to store pledged rice.

A 2006 study by Somporn Isvilanonda, a researcher at the Knowledge Network Institute, estimated per capita annual consumption at 101kg of milled rice in 2002, with wealthier citizens eating less rice than poorer, rural residents.

Mr Somporn also noted that domestic consumption fell over the past decade as household income levels increased, and that given the relatively small use of rice in the feed and processing industries, most of the excess production was exported, depressing global prices and in turn affecting domestic prices and raising subsidy costs.

It's clear that we must go back in time and eat more rice if we are to help the government clear its bulging warehouses. One way I suppose would be to reduce household incomes or increase taxes so as to reduce the attractiveness of beef, pork, seafood and other protein sources. Or perhaps the government can impose a new law requiring everyone to eat more rice, health concerns and waist-lines be damned. After all, if we don't do something we all could end up drowning in a sea of unwanted rice. Are we going to export our problems to neighbouring countries? Perhaps.

But I think if the government insists that we must produce rice, and lots of it, it's only fair that Thai consumers also do their part _ that one additional spoon per meal could go quite a way in helping raise domestic demand and alleviating the current oversupply.

If we get a bit more rotund as a result, well, so be it _ the government already offers citizens universal health care coverage, so I am quite confident the slightly added risk of heart disease, diabetes or other obesity-related illnesses will be cared for by our oh-so-generous state.

Enforcement might be a problem, of course.

But with a strong public campaign and determined leadership, I think the "eat more rice" campaign can have an impact. Indeed, a heavier, hungrier population would potentially do wonders for the economy.

The benefits for the health care sector are plain enough. But what about clothing manufacturers? Health spas and exercise equipment retailers? Think about the boon offered to our auto industry _ with EMR, we will have no need for small-engined eco cars. I forecast banner sales for high-horsepower SUVs.

It would be a win-win scenario. Farmers can continue to plant paddy unchecked, which the government can then purchase at a generous, even lavish price.

Demand, under EMR, would rise locally, reducing the need for Mr Boonsong to travel the world seeking customers. And the added tax revenues from industries to support a "growing" population could in turn be diverted back to the rice pledging programme.

We might even have some funds left over for research into new rice strains and production methods. Consider that even in a best-case scenario, a farmer today might make just 7,000 baht per rai from his field, assuming one tonne of paddy per rai and production costs of 7,000-8,000 baht. In practice, profits are much less, as yields average only around 400-500kg per rai, well below the production efficiency of many of our competitors in the region.

Perhaps with the EMR programme, the government can find some way to increase its research and development budget, which amounted to just 173 million baht from the Agriculture Ministry in 2010, or just 2.58 baht per rai.

Vietnam, which is likely to pass Thailand as the world's largest rice exporter this year, has taken a different strategy in helping its farmers. Not EMR, thank heavens. No, their policy is called "Three reductions, three gains".

It essentially means they want farmers to reduce the use of fertiliser, seed and insecticide while increasing productivity, grain quality and economy. It will be interesting to see which strategy proves more sustainable. Personally, I am quite confident that with the leadership of Ms Yingluck and Mr Boonsong, Thailand can eat its way through any problem.

Wichit Chantanusornsiri is a senior business reporter for the Bangkok Post.

About the author

Writer: Wichit Chantanusornsiri
Position: Business Reporter