Govt rice losses: 130 billion baht, not 34 bil
Low estimate didn't include market value of unsold rice in storage. Rice is perishable & falls in value so market value is real value (mark-to-market).
Low estimate didn't include market value of unsold rice in storage. Rice is perishable & falls in value so market value is real value (mark-to-market).
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RICE-PLEDGING SCHEME
PM's Office finally comes clean
B130bn deficit gets stamp of approval
15/06/2013
Chatrudee Thepara and Wichit Chantanusornsiri
Commerce Minister Boonsong Teriyapirom holds a meeting of the National Rice Policy Committee (Photo: Pattanapong Hirunard).
PM's Office Minister Varathep Rattanakorn has admitted for the first time that the 130-billion-baht loss estimate by a subcommittee overseeing the rice pledging scheme's accounting under the Finance Ministry for the previous two crops is valid.
But it remains to be seen whether an additional 80 billion baht in losses from the 2012-13 main crop will emerge, Mr Varathep said after meeting representatives from the Commerce Ministry, the Bank for Agriculture and Agricultural Cooperatives and the subcommittee.
Mr Varathep has been assigned by Prime Minister Yingluck Shinawatra to compile information from all relevant agencies amid a looming rift between the Commerce and Finance ministries, which have reported far different loss estimates for the scheme.
The subcommittee has estimated losses of almost 137 billion baht from the first two crops - the 2011-12 main and second harvest crops - well above the 34.84-billion-baht figure of the Commerce Ministry.
The subcommittee's loss estimate of more than 200 billion baht for the previous crops led to strong criticism, while Moody's Investors Service warned that such huge losses threatened Thailand's credit rating, although the company later walked back the comment.
The current rice pledging scheme was begun by the Yingluck administration to fulfil promises made during the 2011 election campaign
The state guarantees the purchase of every single grain at a price of 15,000 baht a tonne for white rice paddy and 20,000 baht for fragrant Hom Mali paddy, which are 40-50% above market prices.
An unnamed source at the Finance Ministry insists there is no plan to change accounting methods for estimating the scheme's losses as requested by the Commerce Ministry.
The Commerce Ministry has asked the subcommittee to revise the accounting methods for the scheme, especially the calculation of losses from stockpiled rice.
The subcommittee, headed by Supa Piyajitti, the deputy finance permanent secretary, calculated losses from rice stockpiles by comparing the average price per tonne from the recent sales of stockpiles with the government's buying price plus expenses related to rice milling, storage, interest and other factors.
The Commerce Ministry has excluded current stockpiled rice, saying it has yet to be delivered and cannot be calculated, as well as rice sold under the state's low-cost food programmes.
The figure calculated by the Finance Ministry's subcommittee may be more realistic in determining the scheme's outlook.
After reports of potential heavy losses from rice pledging, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong on Thursday said the buying price could be cut to reflect the current circumstances.
The decision ultimately rests with the National Rice Policy Committee.
(Source: Bangkok Post, RICE-PLEDGING SCHEME, PM's Office finally comes clean, B130bn deficit gets stamp of approval, 15/06/2013, Chatrudee Thepara and Wichit Chantanusornsiri, link)
Academic: Stockpile losses key
15/06/2013
Post Reporters
The Commerce Ministry should have taken into account rice in its stockpiles when calculating losses from the pledging scheme, said Assoc Prof Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand
The government loses 8,277 baht for every tonne of rice bought under the subsidy programme.
He estimates the government bought 23.49 million tonnes in the previous three crops, so losses could be 194 billion baht on top of the management fee of the programme at 20 billion baht a year.
The Commerce Ministry has garnered only about 40 billion baht from selling 3,000 tonnes of rice to the Philippines, 97 tonnes to Bangladesh and 3 million tonnes domestically, he said.
Separately, Korbsook Iamsuri, president of the Thai Rice Exporters Association, said although the Finance and Commerce ministries used different accounting methods in calculating the figures, it should be noted that rice is perishable.
"No matter what method is used, we should not forget that rice is not like gold, which can be kept forever with the quality intact while we wait for the price to increase," she said.
It's true rice prices may rise one day, but there will always be a depreciation cost due to deteriorating quality. In general accounting practice, they tend to base the calculation on mark-to-market prices to evaluate the performance
(Source: Bangkok Post, Academic: Stockpile losses key, 15/06/2013, Post Reporters, link)
Rice Subsidies Vocabulary
subsidy - when the government supports some activity by paying part of the costs of it เงินสนับสนุน เงินชดเชยที่รัฐเป็นผู้จ่ายให้
rice subsidy
government rice subsidy programme
The government loses 8,277 baht for every tonne of rice bought under the subsidy programme.
come clean - tell the truth (about something they were hiding as a secret)
PM's Office finally comes clean
mark-to-market prices - using the current price to value things (assets) in the accounting system and to make official reports; recording the value of an asset as the price that you would get if the asset was sold in the market now (market price) (See Wikipedia)
mark - record สถิติ
It's true rice prices may rise one day, but there will always be a depreciation cost due to deteriorating quality. In general accounting practice, they tend to base the calculation on mark-to-market prices to evaluate the performance
deficit - when you spend more than you receive (has to be financed or funded by borrowing); not enough income to cover expenses (have to borrow to cover deficit)
B130bn deficit
approval - official permission; giving permission for some action; saying "yes" you can do something การอนุมัต
stamp of approval - when something is officially approved, given permission
gets stamp of approval
B130bn deficit gets stamp of approval
admit - accept that something is true (even if it is difficult to accept)
admit for the first time
estimate - guesses an amount (not exact); to say what you think an amount or value is or will be, either by using available information or by guessing คาดคะเน โดยประมาณ
the 130-billion-baht loss estimate
committee - a group of people in an organization who meet and make decisions
sub - underneath
subcommittee - a committee that is underneath another committee or organization
accounting - the work of keeping and checking financial records for a company or organization
the rice pledging scheme's accounting
oversee - manage, checking to see that it operates properly and nothing goes wrong
a subcommittee overseeing the rice pledging scheme's accounting
valid - legally accepted ชอบด้วยกฎหมาย reasonable and generally accepted ที่มีเหตุผลพอ
the loss estimate is valid
PM's Office Minister Varathep Rattanakorn has admitted for the first time that the 130-billion-baht loss estimate by a subcommittee overseeing the rice pledging scheme's accounting under the Finance Ministry for the previous two crops is valid.
meeting - when a group of people come together to discuss issues and make decisions การประชุม
hold a meeting
Commerce Minister Boonsong Teriyapirom holds a meeting of the National Rice Policy Committee.
it remains to be seen - we don't know yet (and have to wait for future to see what happens)
But it remains to be seen whether an additional 80 billion baht in losses from the 2012-13 main crop will emerge, Mr Varathep said after meeting representatives from the Commerce Ministry, the Bank for Agriculture and Agricultural Cooperatives and the subcommittee
relevant - directly connected and important to what is being discussed or considered ที่เกี่ยวข้อง ที่เกี่ยวข้องโดยตรง
all relevant agencies
compile information - to collect information from different places and arrange it in a book, report or list รวบรวม
compile information from all relevant agencies
looming - likely to happen soon ที่เห็นลางๆ
rift - a serious disagreement between two people or groups ความแตกร้าว
a looming rift - a serious disagreement likely to happen soon
a looming rift between the Commerce and Finance ministries
estimates - guesses of what the size, value, amount, cost, etc. of something might be การประมาณค่า
loss estimates
scheme - a plan that is developed by a government or large organisation in order to provide a particular service for people แผนการ โครงการ
loss estimates for the scheme
report - inform; to tell people about something รายงาน
reported far different loss estimates for the scheme
X amid Y - X happening at the same time as Y
Mr Varathep has been assigned by Prime Minister Yingluck Shinawatra to compile information from all relevant agencies amid a looming rift between the Commerce and Finance ministries, which have reported far different loss estimates for the scheme
harvest - gathering fully grown crops from the field เก็บเกี่ยว การเก็บเกี่ยวผลผลิต
the 2011-12 main and second harvest crops
figure - an amount of money จำนวนเงิน
the 34.84-billion-baht figure of the Commerce Ministry
The subcommittee has estimated losses of almost 137 billion baht from the first two crops - the 2011-12 main and second harvest crops - well above the 34.84-billion-baht figure of the Commerce Ministry.
criticism - finding things and pointing out things that are wrong with something การวิจารณ์, บทวิจารณ์
strong criticism
the high loss estimate led to strong criticism
credit - loans เครดิต เงินกู้
credit rating - a measure that shows how likely
threatened - telling someone that if they don't do it, they will be punished
huge losses threatened Thailand's credit rating
comment - to express an opinion แสดงความคิดเห็น remark, telling what you think or what your opinion is about an issue หมายเหตุ
walked back the comment - meaning:
The subcommittee's loss estimate of more than 200 billion baht for the previous crops led to strong criticism, while Moody's Investors Service warned that such huge losses threatened Thailand's credit rating, although the company later walked back the comment.
current - of the present time ปัจจุบัน
the current rice pledging scheme
administration - one government that a country has for a period of time
the Yingluck administration
election - the process of choosing a person or a group of person for a position, especially by voting elect (v) electoral (adj) synonym: the polls การเลือกตั้ง
election campaign - a planned series of activities designed to persuade voters to vote for a particular candidate or political party การรณรงค์หาสียง
campaign promises - things that politicians promise voters to get elected
fulfil promises made during the 2011 election campaign
The current rice pledging scheme was begun by the Yingluck administration to fulfil promises made during the 2011 election campaign
guarantee
purchase - buy
guarantee the purchase
single - one only ดี่ยว
grain - the seed from cereal crops such as rice, wheat, or corn เมล็ดพืช
every single grain
state - government รัฐ
The state guarantees the purchase of every single grain
paddy - rice after it has been harvested from the field ข้าวเปลือก
The state guarantees the purchase of every single grain at a price of 15,000 baht a tonne for white rice paddy and 20,000 baht for fragrant Hom Mali paddy, which are 40-50% above market prices.
source - someone who gives information แหล่งข่าว
an unnamed source at the Finance Ministry
An unnamed source at the Finance Ministry insists there is no plan to change accounting methods for estimating the scheme's losses as requested by the Commerce Ministry.
revise - improve, create again or recreate with improvements
revise the accounting methods for the scheme
The Commerce Ministry has asked the subcommittee to revise the accounting methods for the scheme, especially the calculation of losses from stockpiled rice.
stockpiles - large amounts of something stored for future use กองสินค้าในโกดัง
rice stockpiles
calculated losses from rice stockpiles by comparing the average price per tonne
storage - the putting and keeping of things in a special place for use in the future การเก็บ
interest - payments made for the use of another's money for a period of time
factors - one of the things that effects a situation or event ปัจจัย
expenses related to rice milling, storage, interest and other factors
The subcommittee, headed by Supa Piyajitti, the deputy finance permanent secretary, calculated losses from rice stockpiles by comparing the average price per tonne from the recent sales of stockpiles with the government's buying price plus expenses related to rice milling, storage, interest and other factors.
excluded - not included
excluded from the calculation
current stockpiled rice was excluded from the calculation
The Commerce Ministry has excluded current stockpiled rice, saying it has yet to be delivered and cannot be calculated, as well as rice sold under the state's low-cost food programmes.
realistic - เป็นจริง, เหมือนจริง, เกี่ยวกับความจริง, เป็นไปได้จริง, สมจริง
a more realistic figure
outlook - what people think will happen in the future อนาคตที่คาดไว้ how good or bad things it seems things will be in the future ภาพรวม อนาคต
the schemes' outlook
The figure calculated by the Finance Ministry's subcommittee may be more realistic in determining the scheme's outlook.
potential - might happen in the future; possible ความเป็นไปได
potential heavy losses
circumstances - situation, conditions in which we live
the current circumstances
reflect - to show สะท้อน แสดงถึง
reflect the current circumstances.
the buying price could be cut to reflect the current circumstances
After reports of potential heavy losses from rice pledging, Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong on Thursday said the buying price could be cut to reflect the current circumstances.
the decision rests with ... - the person who will make the decision is ..., the person with responsibility for this decision is ...
ultimately - finally, in the end, after a series of things have happened ท้ายที่สุด, ตอนสุดท้าย, ในที่สุด
the decision ultimately rests with
The decision ultimately rests with the National Rice Policy Committee.
key - important คนสำคัญ
Academic: Stockpile losses key
fellow - someone who is associated with an organization in some way
a senior fellow
The Commerce Ministry should have taken into account rice in its stockpiles when calculating losses from the pledging scheme, said Assoc Prof Somporn Isvilanonda, a senior fellow at the Knowledge Network Institute of Thailand.
fee - an amount of money that you pay to be allowed to do something ค่าธรรมเนียม, ค่าตอบแทน, ค่าบริการ
management fee
He estimates the government bought 23.49 million tonnes in the previous three crops, so losses could be 194 billion baht on top of the management fee of the programme at 20 billion baht a year.
garner - get (get something from some activity)
The Commerce Ministry has garnered only about 40 billion baht from selling 3,000 tonnes of rice to the Philippines, 97 tonnes to Bangladesh and 3 million tonnes domestically, he said.
perishable - will spoil, rot, go bad after a period of time and become unusable and unsellable (such as food, vegetables, meat, flowers)
rice is perishable
it should be noted that rice is perishable
the Finance and Commerce ministries used different accounting methods in calculating the figures
intact - still having
with quality intact - still having high quality
gold can be kept forever with quality intact while we wait for the price to increase
"No matter what method is used, we should not forget that rice is not like gold, which can be kept forever with the quality intact while we wait for the price to increase," she said.
practice - a way of doing something การปฏิบัติ
general accounting practice
depreciation - when things become less valuable over time
a depreciation cost due to deteriorating quality.
base - use as the rule, idea or method for doing (orcalculating) something
base the calculation on mark-to-market prices
tend - to be likely to behave in a particular way or have a particular characteristic มักจะ
tend to base the calculation on mark-to-market prices
performance - how well or badly something works (or whether an investment provides a reasonable return)
evaluate performance
In general accounting practice, they tend to base the calculation on mark-to-market prices to evaluate the performance
It's true rice prices may rise one day, but there will always be a depreciation cost due to deteriorating quality. In general accounting practice, they tend to base the calculation on mark-to-market prices to evaluate the performance
