Rice policy mainly benefits rich people

Poor farmers get 5% of govt rice program money, merchants & millers get 63%.

In photo above rice expert Dr Ammar Siamwalla says rice policy adds to hardship of poor. 

Click button to listen to Pro-Rich Anti-Poor Rice Policy to download

Rice scheme is 'pro-rich'

TDRI says pledging puts entire industry at risk
8/08/2012
Wichit Chantanusornsiri & Parista Yuthamanop

The government rice pledging programme is rife with corruption and inefficiency, putting the entire industry at risk unless changes are made, local economists and rice experts said.

One of the most important economic policies of the Yingluck Shinawatra government, the programme represents a guarantee by the state to purchase unlimited amounts of rice from local farmers at prices as much as 50% higher than market value.

But economists said the programme, which has cost the state more than 200 billion baht to date, is one of the worst-designed and costliest policies enacted by the Yingluck government as it nears the end of its first year in office.

Ammar Siamwalla, honorary economist at the Thailand Development Research Institute (TDRI), said the rice pledging scheme was "pro-rich and anti-poor", with high pledging prices raising the cost of living for the entire public.

"The policy is biased in favour of farmers who can produce more rice compared with those who produce less," he said yesterday. "The policy has also added to the hardship faced by the poor who must purchase rice for their own consumption."

According to the TDRI, 63% of the funds spent on the pledging programme went to merchants and millers, with the rest going to farmers. Only 5% of funds spent went to poor farmers.

The pledging scheme offers farmers prices of up to 15,000 baht per tonne for white rice paddy and 20,000 baht per tonne for jasmine Hom Mali rice.

The TDRI estimates losses for the first year of the programme have reached more than 100 billion baht, based on current global prices and including storage and maintenance costs.

Dr Ammar said the price guarantee programme of the Abhisit Vejjajiva government was more efficient in ensuring funds went directly to farmers. The programme, developed with the TDRI, would pay farmers the difference in crop market prices and regularly-adjusted benchmark prices.

"The insurance programme avoided government intervention in the market, and helped farmers regardless of how much they produced," Dr Ammar said.

But Kittiratt Na-Ranong, the finance minister and a deputy prime minister, said the government is committed to maintaining the pledging scheme.

He added that the Abhisit government incurred losses of 50 billion baht from its insurance programme.

"I don't think it's right. Why would we want to export rice at low prices simply to increase volumes? Thai farmers would suffer. I would rather keep prices high, even though it will cost the government," Mr Kittiratt said.

But TDRI president Nipon Poapongsakorn said the pledging programme must be "fine tuned."

While policies to help raise crop prices were well-intentioned, high prices should go together with high quality, he said. The pledging prices, as much as 50% over market value, encourages farmers to raise production without concern for quality.

Dr Nipon said hopes that the policy would raise global rice prices have proven false, as the government is unable to influence world supply or demand.

"If rice prices are high, who can force the more than 400 million rice farmers around the world to reduce their plantings?" Dr Nipon said.

Thailand is one of the world's largest rice exporters but ranks far behind China, India, Indonesia and Vietnam in terms of total production.

Exports this year fell 45% in the first half from the same period the year prior to 3.45 million tonnes, with export values down 34% to 71.4 billion baht.

Dr Nipon said the pledging scheme has the potential for corruption, with funds channelled away from farmers to surveyors, rice mills and middlemen.

Vietnam and other rice-exporters are benefitting from the higher prices of Thai rice. "Thai taxpayers are helping the exporters of other countries," said Dr Nipon.

Somporn Isvilanonda, a researcher from the Knowledge Network Institute of Thailand, agreed. The government must sell rice for at least US$800 (25,000 baht) a tonne to justify the pledge price of 15,000 baht a tonne, he said.

But white rice is currently priced at just $575 a tonne, and Vietnam currently sells its rice at just $450 a tonne.

Mr Somporn said the government should invest in educating farmers on how to reduce production costs and fund more agricultural research.

"But the Agriculture Ministry only devotes 1.3 billion baht per year to agricultural research," he said.

Even farmers have complained about the pledging scheme. Prasit Boonchoei, chairman of the Thai Farmers Association, said that with so much rice now in storage for the state, rice mills are able to negotiate lower prices with farmers for new paddy pledges.

Farmers are forced to accept lower prices or risk losses due to spoilage, he said. Rules against the cross-provincial sale of paddy also limits options.

Mr Prasit said 75% to 80% of all rice farmers who rent land are also facing rising rental costs.

Kiat Sittheeamorn, a Democrat MP, noted that the government has committed vast amounts of funds to help only a small segment of the population.

More than 200 billion baht has been spent buying rice from just 1.7 million farm households, out of 5.6 million rice-farming households nationwide.

Mr Kiat called for investigations into allegations that the high pledging prices have resulted in around 2-3 million tonnes of imported rice being sold to the government under the programme.

(Source: Bangkok Post, Rice scheme is 'pro-rich', TDRI says pledging puts entire industry at risk, 8/08/2012, Wichit Chantanusornsiri & Parista Yuthamanop, link) 


Rice Policy Vocabulary

pledge - 1. to promise collateral for a loan; 2. to make a serious promise สัญญา 
collateral - property or something of value that you promise to give someone if you cannot pay back money that you borrow หลักทรัพย์ค้ำประกัน, ทรัพย์สินผูกพันตนเพื่อเอาไว้หักชำระหนี้หากไม่ชำระหนี้นั้น

rice pledging programme - the government system to help farmers out with rice prices
rice pledging system - Same as above
pledging programme - Same as above
pledging scheme - Same as above

pledging prices
high-pledging prices

pro - helping someone, for a group 
pro-rich - helping the rich, for the rich 

anti - making if difficult for a group, against a group
anti-poor

hardship - when life is difficult and unpleasant (usually due to a lack of money)
rice policy adds to hardship of poor

scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
rice scheme

rice scheme is 'pro-rich'

risk - danger, how likely or possible it is for a bad event that causes harm and damage ความเสี่ยง
put at risk

TDRI says pledging puts entire industry at risk

rife - very common or frequent มีอยู่ทั่วไป,แพร่หลาย
corruption - (See Wikipedia on bribery, corporate corruption, and political corruption)

inefficiency - now working well as it could, could do more work with given resources อย่างไม่มีประสิทธิภาพ a network, a transportation network
rife with corruption and inefficiency

local - in this country (here: Thailand)
local economists and rice experts

The government rice pledging programme is rife with corruption and inefficiency, putting the entire industry at risk unless changes are made, local economists and rice experts said.

guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน (See glossary)

state - government รัฐ
purchase - buy

a guarantee by the state to purchase unlimited amounts of rice from local farmers

One of the most important economic policies of the Yingluck Shinawatra government, the programme represents a guarantee by the state to purchase unlimited amounts of rice from local farmers at prices as much as 50% higher than market value.

worst - most + bad
worst-designed

enacted - made a proposal into a law ยื่นร่างกฎหมาย
policy - a plan of action to guide decisions and achieve outcomes (See Wikipedia) นโยบาย

costliest policies enacted by the Yingluck government

But economists said the programme, which has cost the state more than 200 billion baht to date, is one of the worst-designed and costliest policies enacted by the Yingluck government as it nears the end of its first year in office. Ammar Siamwalla, honorary economist at the Thailand Development Research Institute (TDRI), said the rice pledging scheme was "pro-rich and anti-poor", with high pledging prices raising the cost of living for the entire public.

biased - unfair; preferring one person, thing, or idea to another in a way that is unfair ลำเอียง
favour - to give an advantage to someone or something, often in an unfair way ช่วยเหลือ

in favour of ... - giving an advantage to ...
biased in favour of farmers
the policy is biased in favour of farmers

consumption - using, eating or drinking something การบริโภค

hardship - a situation in which life is very difficult
hardship faced by the poor
purchase rice for their own consumption

"The policy is biased in favour of farmers who can produce more rice compared with those who produce less," he said yesterday. "The policy has also added to the hardship faced by the poor who must purchase rice for their own consumption.

paddy - rice after it has been harvested from the field ข้าวเปลือก
funds - money needed or available to spend on something เงินทุน

According to the TDRI, 63% of the funds spent on the pledging programme went to merchants and millers, with the rest going to farmers. Only 5% of funds spent went to poor farmers. The pledging scheme offers farmers prices of up to 15,000 baht per tonne for white rice paddy and 20,000 baht per tonne for jasmine Hom Mali rice.

estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า

current - of the present time ปัจจุบัน
global - throughout the world ทั่วโลก
current global prices

storage - the putting and keeping of things in a special place for use in the future การเก็บ
maintenance - work that is done to keep something such as a building, machine, or piece of equipment repaired and in good condition การซ่อมบำรุง
storage and maintenance costs

The TDRI estimates losses for the first year of the programme have reached more than 100 billion baht, based on current global prices and including storage and maintenance costs.

efficient - produces a lot from few resources; doing a task with no waste of time, money or energy
efficient in ensuring funds went directly to farmers

regularly - done continually, every month or every week, for example
regularly adjusted - changed

benchmark - a standard that other things can be compared to and measured by
benchmark prices
regularly-adjusted benchmark prices

Dr Ammar said the price guarantee programme of the Abhisit Vejjajiva government was more efficient in ensuring funds went directly to farmers. The programme, developed with the TDRI, would pay farmers the difference in crop market prices and regularly-adjusted benchmark prices.

insurance - when you pay a company to take your risk for you การประกัน (การประกันความเสี่ยง ประกันราคา) (See Wikipedia)
insurance programme

intervention - a situation in which someone becomes involved in a particular issue, problem, etc., in order to influence what happens การแทรกแซง
government intervention in the market

"The insurance programme avoided government intervention in the market, and helped farmers regardless of how much they produced," Dr Ammar said.

committed - loyal and willing to give your time and energy to something that you believe in
committed - promised (a sure thing)
committed to maintaining the pledging scheme

But Kittiratt Na-Ranong, the finance minister and a deputy prime minister, said the government is committed to maintaining the pledging scheme.

incurred losses - when a person or company loses money

He added that the Abhisit government incurred losses of 50 billion baht from its insurance programme.

suffer - to experience physical or mental pain
farmers would suffer

"I don't think it's right. Why would we want to export rice at low prices simply to increase volumes? Thai farmers would suffer. I would rather keep prices high, even though it will cost the government," Mr Kittiratt said.

fine tuned - small changes to get something working perfectly

But TDRI president Nipon Poapongsakorn said the pledging programme must be "fine tuned."

concern - a worry ความกังวล
concern for quality

intention - a goal you want to achieve
well-intentioned - to honestly want to help (with the goals you working to achieve)
raise production without concern for quality

While policies to help raise crop prices were well-intentioned, high prices should go together with high quality, he said. The pledging prices, as much as 50% over market value, encourages farmers to raise production without concern for quality.

influence - affect what people do or think; to affect or change how someone or something develops, behaves or thinks อิทธิพล มีอิทธิพลต่อ, ชักจูง อำนาจบังคับ
demand - the need and desire to buy goods and services by households and businesses

the government is unable to influence world supply or demand

hopes have proven false - what people wanted (hoped for, wished for) in the past, did not happen

Dr Nipon said hopes that the policy would raise global rice prices have proven false, as the government is unable to influence world supply or demand.

force - make something do something (even if they don't want to)
force rice farmers to reduce their plantings
who can force the more than 400 million rice farmers around the world to reduce their plantings?

"If rice prices are high, who can force the more than 400 million rice farmers around the world to reduce their plantings?" Dr Nipon said. Thailand is one of the world's largest rice exporters but ranks far behind China, India, Indonesia and Vietnam in terms of total production. Exports this year fell 45% in the first half from the same period the year prior to 3.45 million tonnes, with export values down 34% to 71.4 billion baht.

potential - might happen in the future; possible ความเป็นไปได้
potential for corruption
the pledging scheme has the potential for corruption

channelled - sent in some direction
funds channelled away from - money was not given to them, but given to someone else instead

surveyors - people who check some activity and work to make sure it was done correctly (and there was no corruption)
funds channelled away from farmers to surveyors

middlemen - companies that buy and sell goods (often in bulk) between the factory and the final consumer พ่อค้าคนกลาง

Dr Nipon said the pledging scheme has the potential for corruption, with funds channelled away from farmers to surveyors, rice mills and middlemen.

taxpayers - people who pay taxes (who don't want to see their hard-earned money wasted) ผู้เสียภาษี

Vietnam and other rice-exporters are benefitting from the higher prices of Thai rice. "Thai taxpayers are helping the exporters of other countries," said Dr Nipon.

justify - provide a reason for; to show that there is good reason for something แสดงเหตุผลที่ดีพอ
justify the pledge price of 15,000 baht a tonne

Somporn Isvilanonda, a researcher from the Knowledge Network Institute of Thailand, agreed. The government must sell rice for at least US$800 (25,000 baht) a tonne to justify the pledge price of 15,000 baht a tonne, he said. But white rice is currently priced at just $575 a tonne, and Vietnam currently sells its rice at just $450 a tonne.

research - the detailed study of something to find out and discover new facts about something การวิจัย
agricultural research

fund - to provide money for something เงินทุน กองทุน ให้เงินทุน
fund more agricultural research

Mr Somporn said the government should invest in educating farmers on how to reduce production costs and fund more agricultural research. But the Agriculture Ministry only devotes 1.3 billion baht per year to agricultural research," he said.

complain - tell people that you don't like something บ่น
complained about the pledging scheme

negotiate - to successfully travel on a road or path that is difficult to travel on or through ฝ่าไป
negotiate lower prices with farmers

Even farmers have complained about the pledging scheme. Prasit Boonchoei, chairman of the Thai Farmers Association, said that with so much rice now in storage for the state, rice mills are able to negotiate lower prices with farmers for new paddy pledges.

spoilage - crops that are damaged (rot, go bad) and cannot be sold or used

cross-provincial - across provinces; from one province to another province
cross-provincial sale of paddy

options - choices;  the different things that someone can choose to do ทางเลือก
limits options - reduces the choices you have

rent - to pay money for the use of something for a period of time เช่า
rent land
rice farmers who rent land

Farmers are forced to accept lower prices or risk losses due to spoilage, he said. Rules against the cross-provincial sale of paddy also limits options. Mr Prasit said 75% to 80% of all rice farmers who rent land are also facing rising rental costs.

vast - very large in area, size, amount, etc. กว้างใหญ่, มหาศาล มหึมา  ส่วนใหญ่
vast amounts - very large amounts

vast amounts of funds
committed vast amounts of funds

segment - a part of something ตอน a separate part ส่วนต่างๆของสังคม
population - the group of all the people who live in one country, area or place กลุ่มที่อาศัยอยู่ในบริเวณหนึ่ง
small segment of the population

Kiat Sittheeamorn, a Democrat MP, noted that the government has committed vast amounts of funds to help only a small segment of the population.

households - families or groups of people living together (economics treats this as a unit that makes decisions)
nationwide - throughout a whole country ทั่วทั้งประเทศ

More than 200 billion baht has been spent buying rice from just 1.7 million farm households, out of 5.6 million rice-farming households nationwide.

allegations - accusations; statements that someone had done something wrong or illegal even though this has not been proven yet ข้อกล่าวหา

Mr Kiat called for investigations into allegations that the high pledging prices have resulted in around 2-3 million tonnes of imported rice being sold to the government under the programme.