Could rice program bankrupt Thailand?

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

One way a developing country can head toward bankruptcy is the way the Thailand government’s ruling party won election—promising farmers more than the government can afford in crop subsidies.

The rice producer subsidy has become known as the “Thai rice scheme” and has the government owning about 17 million tonnes of milled rice, or nearly twice what it exports normally in a year.

The government is committed to paying farmers 15,000 baht (1$=29.82 baht) per tonne for rice. The Thai government is involved in marketing its farmers’ rice; therefore, the asking price for Thai rice is at $570 a tonne, about $170 higher than rice from its main rivals in the market—India and Vietnam, explained a Reuters News Agency report.

Prime Minister Yingluck Shinawatra came into power in 2011 on a promise to pay farmers way above what was then the market rate for their rice. Now, the government owns all this overpriced rice that has gone into storage—and continues to go into storage. Dumping the rice on the market could plunge the price of rice worldwide.

The government is paying for warehouse storage, and also running out of storage warehouses for the milled rice. And although the government has threatened arrest of anyone entering the warehouses without permission, there are reports that the rice is going out of condition and spoiling, which is logical considering the country’s hot and humid climate.

Officials who know the particulars report the government spent a minimum of $11.3 billion on the first year of the program through last September, and the current year’s program is underway with the financial mess compounding itself.

Having been to Thailand twice as a guest of the previous ruling political party, I was in Thailand when the last election campaign was underway, and it was obvious that promising the large rural population a higher income than the ruling party was willing to promise was swaying the vote of rural rice growers. Those rural low-income voters are still loyal to the new ruling party because they appreciate the higher income and aren’t concerned about the total economic situation of the country.

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (2) Leave a comment 

e-Mail (required)


characters left

Anan Tridechapong    
Bangkok  |  February, 12, 2013 at 03:26 AM

There were many warning from many sectors to abolish paddy rice pledge scheme but Thai government still go ahead this project. It seem to destroy the country without awareness from Thai people.

Nazz Sniper    
Bangkok  |  February, 12, 2013 at 09:52 PM

Current Thai Government manages many projects look like managing by one of the criminal organization which dominate over state power because nothings for overall Thai benefit.

Pacesetter Grain Hopper

The Pacesetter Gain Hopper features original and innovative ideas like the patented RollerTrap™, the industry’s easiest to open and maintain trap ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form