Rice pledging sows trouble for our future

Rice pledging sows trouble for our future

There is no need to cite any polls or indices. But the censure debate that did little more than cause the government to shrug its shoulders is further evidence that Thai democracy has not made much progress.

In the no-confidence motion late last month, the government was charged with accusations that its rice pledging scheme is plagued with corruption.

The pledging scheme is the ruling Pheu Thai Party's most controversial election campaign promise. Others include the minimum wage hike, tax rebates for first-time car buyers and various entrepreneurial funds.

Whether the policy really has any merit is still up for debate. Opponents of the scheme argue that it favours rich farmers over poor ones as most of the hundreds of billion baht spent so far has gone to middle-income and wealthy farmers, especially those close to Pheu Thai canvassers. The scheme's supporters claim that the policy is a simply a reallocation of wealth to farmers, who they argue have long been milked by millers and merchants.

Those in this camp also believe this is something farmers deserve, given that a large chunk of fiscal spending had previously been used to bail out bankers and top-level businesses during the tom yum kung crisis in 1997.

In fact, I fully support any state intervention that reduces the wealth gap. A plethora of indicators points to disparities, particularly in public services like education and health care as well as job opportunities between people in Bangkok and those in remote provinces.

But corruption is another thing.

At the centre of the no-confidence debate was the so-called government to government (G-to-G) rice deal of 1.46 million tonnes. The opposition Democrat Party presented evidence that the money from the sale of rice could have come from a few local companies belonging to close associates of ousted prime minister Thaksin Shinawatra.

The Democrats allege that the deal could be a front for a plot to sell rice in the stockpiles "under the table" to a local rice trader, to be resold to rice millers who would afterwards pledge the rice with the Commerce Ministry under the scheme.

So far, the government has not taken any steps to deal with graft allegations. Actually, the Pheu Thai Party failed from the start in not being able to explain why the rice pledging price was set at 15,000 baht per tonne. It's unlikely that the sum is based on rational calculation.

Moreover, it failed to specify measures to handle the existing stock and the glut of incoming stock to prevent a decline in the quality of rice and also to recoup the sum it invested.

While the rice pledging policy may have served the purpose of increasing income for some farmers, there are big loopholes in how the state ensures taxpayers' money goes to those who deserve it.

Will the scheme result in sustainable empowerment of farmers? I cannot see that happening.

After all the criticism and concern over public debt accumulating, some cabinet ministers have tossed out the idea that the government will run the policy for three years. The scheme will have consumed a trillion baht by then. I hope Thai farmers will be stronger and in need of less state support, if not able to stand on their own feet. If not, what more will the government have to do for them?

If you travel upcountry today, you can sense farmers' enthusiasm to grow more rice for the scheme. You may see smoke billowing from rice fields as farmers burn dry rice stems to quickly pave the way for a new harvest, destroying nutrients in the soil.

Mainstream farmers will continue to rely heavily on farm chemicals in the hope of increasing yields. There will be a high price to pay, not only in terms of money but in health as chemical residues have been linked to serious illnesses such as cancer.

I hope that when the rice pledging scheme comes to an end, the government will come up with a policy that will strengthen the position of farmers, and at the same time make Thai rice competitive again in the world market.

But in order to do so, we need a long-term policy _ something I still don't see this government offering.


Parista Yuthamanop is Senior Economics Reporter, Bangkok Post.

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