Ex-ministers defend Yingluck on YouTube

Ex-ministers defend Yingluck on YouTube

Four former ministers assigned by ex-premier Yingluck Shinawatra to answer questions about her government's rice pledging programme have gone online in her defence.

The four took to YouTube after being forced to listen in silence on Friday in the National Legislative Assembly while NLA members read out their questions. They were among nine people that Ms Yingluck had sent to the NLA to appear on her behalf.

NLA members have demanded that Ms Yingluck appear to answer their questions in person ahead of a vote on her impeachment scheduled for Friday. She appeared last Monday to give a preliminary statement in her defence but legislators said they still had more questions to ask her.

The four ministers were Kittiratt Na-Ranong, a former deputy prime minister and finance minister; Niwattumrong Boonsongpaisan, former deputy premier and commerce minister; his former deputy Yanyong Phuangrach; and former PM's Office minister Varathep Rattanakorn.

The clips they uploaded to YouTube on Saturday answered some of the 35 questions the NLA members asked on Friday.

Mr Niwattumrong said in his clip that rice pledging was nothing new in Thailand. It had been used for 33 years by several parties and Pheu Thai improved it for effectiveness in order to really pull farmers out of poverty.

Citing 2013 data from the Organisation for Economic Co-operation and Development (OECD). he said rice subsidies were 2-3 times larger than those for other crops. Some countries such as Japan, South Korea, Norway and Switzerland subsidise more than 50% of all farmers' incomes. Indonesia spends 3.5% of its gross domestic product (GDP) on farm subsidies while China spends 2.2%. In terms of value, the United States spends $83 billion or 0.5% of GDP compared to $7.3 billion or 2% of GDP in Thailand, and $63 billion (1.3% of GDP) in Japan.

"These subsidies are considered an investment. They are not supposed to be calculated in terms of profits and losses because there are other [intangible] benefits involved. If you don't solve farmers' difficulties, other problems will follow," he said.

Economists estimate that the rice pledging programme, which involved paying farmers 40-50% more than market rates for their paddy, resulted in losses to taxpayers of at least 500 billion baht. Millions of tonnes of deteriorating, overpriced and unsellable rice remain in local silos.

Ms Yingluck stands accused of failing to step in and stop the programme after being warned that it was rife with corruption and would cost the government huge sums.

However, Mr Niwattumrong defended the oversight of the programme, saying that five more committees were added to the existing seven. They focused on four areas: corruption prevention, checks, risk management and corruption suppression.

"We used technology such as IT in registering farmers and GPS to keep coordinates of all farming areas to enhance transparency," he said.

Mr Kittiratt also said farm subsidies should not be considered in terms of profits and losses.

Citing Fiscal Policy Office data, he said the programme added 308 billion baht in economic value in the 2011-12 crop year and 315 billion in 2012-13.

"The programme helped lift GDP by 2.7% so there's no need to find the culprit because it did not cause damage," he said, comparing the programme to a road construction project.

"Bailing out financial institutions after the 1997 financial crisis was the same," he continued. "It's at the discretion of the government at the time to help the group it views as needing its help the most. And our government chose to help farmers.

"Can we leave the 4 million households and 15 million people, or 23% of the population, in poverty? The programme did improve their life, increase purchasing power and narrow the poverty gap.

"Adding up the subsidy in each crop year and calling the total accumulated losses is not the correct way to tell the story. If we really have to do so, we must add the economic value the programme generated during those years.

"Besides, the money was transferred directly to farmers' accounts with the Bank for Agriculture and Agricultural Cooperatives (BAAC) so there's no arguing it did not reach farmers."

Mr Kittiratt also dismissed the accusation that the scheme destroyed the market mechanism.

"Only half of all rice output was pledged. The rest was traded normally. In fact, it even fetched higher prices because farmers for the first time had a choice: to either sell it on their own or to the programme," he said. "Claims that exporters could not source rice are unfounded as well because the grain from the stockpiles was auctioned normally in open bids."

The former finance minister also defended the debt ratio during his government's term.

"Public debt at the time was only 45% of GDP, well below the 60% [legal ceiling] set by the previous government. But the accusers may have misunderstood that it did not include the scheme's loans," he said. "In truth, the 45% already included the guarantee for the loans to the BAAC to manage the programme and it's still very low by international standards."


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