A rice deal that never existed in the first place
- Published: 22/11/2012 at 12:56 PM
- Online news:
The truth is out, that the Commerce Ministry's claim of a 15-million-tonne government-to-government rice deal with China over three years is anything but real.
There is a popular Thai saying that goes along these lines: “A dead elephant cannot be covered up by lotus leaves.”
This is exactly the situation facing the Commerce Ministry – there is a dead elephant in its front yard and it is trying desperately to cover it up with lotus leaves, or with whatever is handy. In this case, the dead elephant is the controversial rice pledging scheme, which has already filled the country’s warehouses with some 10 million tonnes of unsold milled rice with another 30 million tonnes of paddy from the new harvest season to be bought under the scheme, milled and then stored in wherever empty space is available - such as an aircraft hangar, or in a military base somewhere.
The 15 million tonnes of milled rice that the Commerce Ministry earlier claimed to have been sold to China in a government-to-government deal over three years, of five million tonnes annually, under a memorandum of understanding (MoU) hastily approved by the Thai cabinet on Nov 6 turns out to be a complete fantasy.
There is no such deal at all, according to the MoU which was actually signed on Wednesday at Government House between Commerce Minister Boonsong Teriyapirom and his Chinese counterpart Chen Deming and witnessed by visiting Chinese Premier Wen Jiabao.
In the MoU there is no mention whatsoever of anything which indicates that China will definitely buy rice from Thailand. There is no mention whatsoever of the amount of rice to be bought by China, or the value of the rice, or the delivery timeframe.
The closest thing to a rice deal is the mention in the MoU that both China and Thailand will support their respective governmental and private sectors to push for bilateral rice trade and to secure rice markets.
So, where did the 15 million tonnes figure come from in the first place? Was it made up by the Thai Commerce Ministry to give the impression that it had secured a rice deal with China, to ease the pressure from criticism of the rice pledging scheme, without the knowledge or consent of the Chinese side?
The fact is that the MoU approved by the Thai cabinet at the Nov 6 meeting chaired by Deputy Prime Minister Chalerm Yubamrung, while Prime Minister Yingluck Shinawatra was abroad, was just a draft and was not seen by the Chinese.
So when they actually saw the document, it had been radically changed. And the real MoU is the one that was signed on Wednesday – the one which does not bind China in any way whatsoever to buy rice from Thailand on a government-to-government deal.
Now you can see why the Commerce Ministry was so reluctant to reveal any details about the draft MoU, claiming it was classified.
Do they really believe that they can forever hide from the public and the media that there is, in fact, no rice deal at all, even after the MoU was formally signed? I really cannot understand the mindset, or the IQ, of the people in the Commerce Ministry who think they can fool the Thai public all the time with this shallow fantasy.
Another warning. Do not confuse this MoU with the rice deal which was inked on the same day, and also witnessed by Chinese Premier Wen, at the Thai Chamber of Commerce. It is a separate deal under which China’s state firm, Cofco, will buy 240,000 tonnes of milled rice worth about 6.24 billion baht from three Thai rice exporters, Asia Golden Rice (120,000 tonnes), Thai Fah (100,000 tonnes) and CP Group (40,000 tonnes).
There is talk by government officials that the private sector’s rice deal was due to the government’s efforts to export rice – which is another lie. This is understandable, that the Commerce Ministry is so desperate to dispose of its huge rice stock that it would claim credit for every rice deal, even the one clinched by the private sector.
The government, and the Commerce Ministry in particular, is caught in a serious dilemma. It cannot just dump the rice stockpile on the world market at a fire sale price without inviting uproar from the US, which has already raised questions with the World Trade Organisation about the rice pledging scheme, and harsh comment from critics at home. Also, selling off the rice stock at a low price would be an acceptance of the failure of the scheme, and of the brains behind it, and the claim the scheme will actually help boost rice prices in the world market.
On the other hand, if the rice stockpiles are left unsold, they risk being eaten up by rice bugs or rot the longer they are kept, and there would still be no more room available to store the new rice, about 30 million tonnes of paddy to be bought with another 300 billion baht of taxpayers’ money at above market prices.
The rice pledging scheme is worse than a dead elephant -- and stinks even more, too. But the very worst problem is, when will the Thai public wake up to this destructive scheme and realise that it benefits only a certain party, politicians and crooked businessmen, and not the poor farmers it was supposedly intended to help?
About the author
- Writer: Veera Prateepchaikul
Position: Former Editor