How the rice pledging scheme is backfiring on Thai farmers

       The government rice pledging scheme, in place for six years and paying higher than market prices,has encouraged farmers to plant rice varieties with big yields. There has been no emphasis on quality. The quality of Thai rice has thus deteriorated and foreign buyers have reduced their purchases, notes a Thai Rath writer.Thai rice exports have fallen 30% over the six years to a global market share of 22% while Vietnam has seen its exports rise 56% to capture a 20% global share,becoming the second biggest rice exporter in the world.
       Another adverse effect of the rice pledging scheme is that some rice traders are importing cheaper rice from neighbouring countries such as Burma and Cambodia and selling it to the gov-INernment under the pledging scheme,reaping double benefits. The result of this corrupt practice is many farmers in Burma and Cambodia have expanded production for export to Thailand to be sold to the government.
       The rice pledging scheme not only encourages the planting of lower quality rice by Thai farmers but also helps farmers in neighbouring countries sell their produce in Thailand at a cost to Thai taxpayers who have to foot the bill.
       As a trained economist, the Thai Rath writer said he did not agree with any form of price intervention, whether as a rice pledging scheme or as a rice guarantee scheme. Any measure that distorts market mechanisms will have adverse consequences for the economy as a whole.
       But the writer recognised that, in terms of politics or even humanitarian consideration, helping poor farmers whose economic status is below any other sector in society is necessary. For this reason, most economists would not object to all price intervention schemes.They understand the good intentions of successive governments in trying to help poor farmers. They just feel that the rice price intervention scheme must be handled with utmost care to benefit farmers directly - and only when it is absolutely necessary.
       Even if the scheme means the whole country has to shoulder some losses to benefit poor farmers, the writer believes most Thai taxpayers would be supportive. However, they would not be pleased to learn the scheme is being misused by some rice traders to buy cheaper rice from neighbouring countries and sell it for a profit to the government.
       The writer said it was time to revise the rice pledging scheme. It has several adverse consequences. the main one being the low quality of Thai rice which has enabled Vietnam to expand its rice exports at the expense of Thailand. Vietnam may leapfrog Thailand to become the world's leading rice exporter next year or soon after, concluded Thai Rath .
       Asean rice free trade
       Prime Minister Abhisit Vejjajiva told the Asean ministerial meeting in Phuket this week that Asean would become like the EU within six years with people,labour, capital and goods flowing freely within the 10 Asean member countries,noted another Thai Rath writer.Asean member countries will gradually reduce or abolish tariffs on several products in the years to 2115,when a completely free trade environment is implemented. Starting from Jan 1 next year,rice trading within Asean will be tariff free, which means neighbouring countries can sell their rice to Thailand and Thailand can sell its rice to other Asean countries tariff free.
       This may seem to be good news as Thailand is the world's No1 rice exporter.But the facts suggest otherwise. Thai farmers cannot compete against Vietnamese rice farmers in terms of productivity and price, meaning Vietnam will gradually grab a bigger rice export market share at the expense of Thai rice exporters.
       Most Thai farmers plant rice according to the seasons because the irrigation system does not cover most rice fields.Most Thai farmers have to sell at low prices because they are at a disadvantage in dealing with rice traders. For this reason, successive governments have operated a pledging scheme to buy rice from farmers at higher than prevailing market prices, putting a huge dent in the national budget as the government has to sell the rice stocks at reduced prices to exporters.
       The Abhisit government has proposed a new rice price guarantee scheme, which means the government will pay farmers less as there is no need to manage rice stocks.
       When the Asean Free Trade Area on rice takes effect next year, the Thai Rath writer believes rice from Vietnam, Burma,Cambodia and Laos will be exported to Thailand to compete with the local variety, and could win a significant share due to lower prices.
       If more and more Thais resort to buying cheaper rice from neighbouring countries, the writer believes Thai rice farmers will suffer.
       How will they earn a living?
       VeteranDemocrat MP shows insensitivity
       The Election Commission on July 16 ruled that 13 Democrat MPs should lose their seats in parliament for breaching the provision in the constitution barring MPs from holding shares in media companies or those holding government concessions, noted Nongnuch Singhadecha,aMatichon writer.Nongnuch cited the reactions of some of the veteran Democrat MPs, including constituent MPs Juti Krairirk and Samphan Thongsamak and party-list MP Trairong Suwannakhiri.
       Mr Juti, representing Phitsanulok province, said he accepted the EC's ruling.He did not blame anyone but himself for failing to study the constitution provision. He said he would contest the byelection made necessary by his disqualification and spend the next three to four months stumping for votes. He asked people to forgive him for necessitating a by-election to be paid for by taxpayers.
       Nongnuch judged Mr Juti's remark to be full of political spirit and very mature, upholding the Democrat Party's standards.
       She also praised Mr Samphan, a Nakhon Si Thammarat MP, for saying he accepted the EC's ruling and he too would contest the by-election.
       But she took issue with veteran MP Trairong, who said the ruling was suspect because some EC commissioners might not understand stock trading and had misinterpreted the law.
       He also lashed out at the constitution drafters for writing the provision ambiguously and causing this problem of interpretation.
       As if the Democrat Party's image was not damaged enough, the next day Mr Trairong said Deputy Prime Minister Suthep Thaugsuban, who was also judged guilty and resigned from his seat in parliament, had quit mainly to spite the EC.
       The remarks of the former cabinet minister gave the impression some Democrat MPs were no better than the MPs from the opposition party which is financed by former prime minister Thaksin Shinawatra. These MPs criticise any independent body's ruling that does not favour them as biased and praise any decision that goes their way.
       What irked Nongnuch the most was Mr Trairong's phrase,"One need not believe [the EC commissioners] because they might lack knowledge about stock trading", which could be interpreted as saying the independent body, which is tasked by the law to hold both local and national elections, cannot be relied upon to be neutral or knowledgeable.
       If everyone accepts Mr Trairong's argument, then independent bodies would not be able to function - including the courts - as people could cite the same argument - that judges lack expertise in economics and business and so their decisions cannot be accepted.
       Nongnuch blasted Mr Trairong for being insensitive as the matter was still not final. The EC ruling is awaiting a Constitution Court interpretation. He should waitand argue in the Constitution Court that his stock holding is so small he could not influence the direction of the company with a concession with the government.
       It would have been better if Mr Trairong and his party had said the issue rested with the Constitution Court. Or better, he could have said nothing if he disagreed with the EC ruling.
       If Mr Trairong wishes to continue to blast the EC as an institution that cannot be believed, Nongnuch reminded him that former executives of the Thai Rak Thai and People Power parties might also argue they should not have been barred from politics for five years.
       It is often said that before one speaks,one is the master. Once words are spoken,one is a slave of those words. Some Democrat MPs should be aware of this,concluded Matichon
       Miscellany
       The Public Health Ministry is reporting 20 more deaths from the deadly type-A (H1N1) flu and estimates more than 500,000 Thais have been infected.
       The new fatalities recorded over the past seven days raise the national death toll to 44 from the flu pandemic. Another 35 patients were in hospital, seven of them in critical condition, the ministry said in its weekly report, which replaces its daily report in an attempt to calm public panic about the disease.
       Kamnuan Ungchusak, a senior expert in preventive medicine, said the estimated figure of 500,000 A (H1N1) cases was based on ministry calculations, which used the number of patients who had sought hospital treatment as a factor.More than 25,000 people have sought treatment for flu-like symptoms at hospitals each day, the ministry has found.
       But he said a surge in A (H1N1) cases was not impossible.
       "If we can't quarantine the patients with mild symptoms at home, the figure will absolutely skyrocket," Dr Kamnuan said."If 50% of them stay home, the rising infection rate will stabilise. And if more than 70% of them stay home, we can successfully control the outbreak."