A 20% cut in the paddy pledging ceiling price is expected to help the government cut losses but it is unlikely to rein in corruption weighing on the scheme, a rice expert says.
The problem with rice-pledging, says the TDRI expert, is not the farmer, but right here, where corruption at the milling and merchant level steals billions from the trade. (Post Today photo)
Nipon Poapongsakorn, distinguished fellow at the Thailand Development Research Institute (TDRI), said the cut can lower losses by about 87 billion baht but it it does not strike the corruption problem at its core.
"The release of the rice stocks is where massive corruption takes place," the TDRI's rice expert told a forum hosted by the Thai Journalists Association and the Isra Institute Thai Press Development Foundation.
Mr Thanong said his calculation is based on the ceiling price of 12,000 baht price per tonne and a maximum of 500,000 baht paid to each farming household. The amounts of rice to be pledged are estimated to fall by 17.2%.
The seminar looked at whether the government's decision to slash the rice-pledging price for the second crop in 2013, from 15,000 baht a tonne to 12,000 baht per tonne, would help the embattled programme.
"The slashing of the pledging price does not affect any stakes which rice millers or state officials have in the programme. It just takes away money from rice farmers," Mr Nipon said.
However, the cut will allow the government more room to continue with the rice pledging scheme which is planned for four harvest seasons.
Mr Nipon urged the government to scrap a regulation in which rice mills are allowed seven days to send milled rice to the government's silo.
The seven-day period allows rice millers to buy cheap paddy rice from neighbouring countries and pass it off as the pledged rice, he said.
He said about 3 million tonnes of rice held in the government stock has questionable origins.
"This is a probably why the government can't close the account for 2012/2013 harvest. There is more rice in stock than there is supposed to be," Democrat list-MP Kiat Sittheeamorn said.
He said the government is wrong to treat information relating to the scheme as confidential.
"The prime minister says the scheme is transparent. But how can it be scrutinised when there is no information," he said.
Somporn Isawilanont, a senior academic, said the price cut is merely a way for the government to reduce the scheme costs, which are higher than expected.
However, he said slashing the price will encourage the private sector to compete with the government and buy rice from farmers for export.
Senator Yutthana Thaipakdee said the release of rice stockpiles is plagued with irregularities, especially the government's sales of packed rice under the Commerce Ministry's low-cost Blue Flag programme.
About 2.5 million tonnes of rice is being sold for the Blue Flag scheme to be made into 500 million packs of rice.
He said a senate committee investigated the matter and found that private companies contracted to make packed rice have failed to hand over the crop.
It is suspected the rice price was reduced to 7,500 baht per tonne when released and was sold back on to the market at between 13,000 and 14,000 baht per tonne.
These private companies have made 15-20 billion baht in profit from this activity, which is also the government's loss, he said.
Rangsan Kasulong, a farmers' representative, lashed out at the government for cutting the price.
"We didn't ask for 15,000 baht per tonne. The government put it in our hands and after that the production costs rose," he said.
He said the farmers will submit a petition against the price cut to the government tomorrow.
Meanwhile, the Pheu Thai Party is bracing itself for a backlash against the price cut.
Party spokesman Prompong Nopparit said MPs will meet this week to listen to feedback.
He said the party will send its MPs to discuss the matter with farmers and counter the opposition's allegations.
About the author
- Writer: Pradit Ruangdit