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Thailand rice subsidy gets funding amid controversy
Publication Date : 09-10-2012
The Thai government gave the Bank for Agriculture and Agricultural Cooperatives (BAAC) close to 92 billion baht (US$3 billion) yesterday to finance its rice subsidy scheme. The move followed a complaint of insufficient funding, a senior bank executive said.
Of the total amount granted, just under 50 billion baht had been set aside from the 2013 state budget to cover costs the bank would have to shoulder implementing the scheme. And close to 42 billion baht was sent to the bank after the government sold part of its rice stockpile.
BAAC executive vice president Boonthai Kaewkhantee explained yesterday that the bank had spent 118.58 billion baht so far to buy up 6.95 million tonnes of rice from 1.14 million farmers in the 2011/2012 crop season. The bank is also spending 190 billion baht to purchase 12.82 million tonnes from 1.02 million farmers in the second harvest season.
"There should be no problem for the bank to finance the rice-pledging scheme for the 2012/2013 harvests, since the government has promised to provide 240 billion baht," Boonthai said.
The government was expected to sell part of its rice stocks this year and give the bank another 40 billion baht, he said. The government would also borrow 150 billion baht and provide more funds for the bank to buy 15 million tonnes of rice in the first crop year of 2012/2013, he said.
The government also announced yesterday it would proceed with a serious inquiry into any corruption in the rice pledging scheme.
To date, some 25 cases are being investigated. Four of these involve government officials from the circumvention practice. The rest are complaints by farmers of cheating in the project by rice millers. Damage from the cheating was put at a total of 307 million baht. In addition, nearly 92,000 farmers were waiting for assistance.
Police were sent to probe two points - the registration of farmers and the pledging point.
"Prime Minister Yingluck has ordered concerned agencies to rush to investigate and find facts about the whole pledging scheme, and whoever is found guilty will be subject to punishment," Deputy Premier Chalerm Yoobamrung said yesterday. He said the reports now only showed small cases of graft.
Farmers were also allegedly satisfied with government managers sending police to survey proceedings at the pledging points.
"Anybody who is unsatisfied with the price pledging programme should submit this issue to the Parliament for debate. Every government wants to upgrade people's way life but they have different thoughts and methods on how to do this," Chalerm said.
Chalerm, who chairs a special centre to probe corruption in the price pledging policy, asked if the government tolerated corruption, "why has it set up this investigating centre?
"I have worked as a police officer, [and know that] what we are doing should have evidence."
He claimed that the BAAC was politicising the subsidy scheme because the bank's top managers were appointed by Democrat Party.
"The bank claimed that it ran out of budget for the price subsidy project. [But] if the budget had gone, the bank should ask for such financial support from the Finance Ministry," Chalerm said. He said the bank officials involved should be identified.
The centre will call a meeting with concerned government agencies including the Comptroller General's Department, the Public Warehouse Organisation and the BAAC within the next three weeks. In addition, it will arrange a conference call with governors nationwide to keep a close watch on the scheme.
The government believes that when Vietnam sells its rice, the price of Thai rice will automatically rise. It hopes to eventually impose a trading set-up in the world market in the same way Opec sets oil prices.
Meanwhile, a group of senators sought a special debate with the government yesterday about its rice price-pledging project, in another blow to the expensive scheme.
Senator Paiboon Nititawan submitted a motion to Senate Speaker Nikom Wairachpanit, asking for him to call the general debate without voting, under Article 161 of the Constitution. Paiboon's motion has been backed by 80 senators.
Article 161 allows senators of not less than one-third of the Upper House to submit a motion for a general debate in the Senate, without a resolution to be passed. Under the clause, the Cabinet is requested to give statements of fact or explain important problems in connection with the administration of the state affairs.
Paiboon said yesterday that the government's 400-billion baht project was plagued with graft and had met with criticism and opposition, with the latest move coming from a group of academics from the National Institute of Development Administration (Nida).
"There should be a discussion to seek solutions to the problems. There must be improvement to ensure maximum benefit for farmers and to prevent wastage of state funds," he said.
Nikom said after accepting the motion that he would forward it to the Prime Minister's Office by himself. "I believe Prime Minister Yingluck Shinawatra will send a representative to explain the matter with the Senate as soon as possible although no timeframe is set in the Constitution," he said.
Senator Jetn Siratharanont said there were many issues in the project senators wanted to ask the government about. These included the sale of rice in government stocks, delays in payment to farmers selling to the government, and the new project for the next year. "I believe the government will explain to us before the end of this current parliamentary session on November 28," he said.
Senator Sumon Sutawiriyawat, who chairs the Senate's panel on corruption prevention and good governance, called on the government yesterday and related state agencies to disclose details to support their claim that 7 million tonnes to rice had been sold to other countries under government-to-government deals. She suspected this could be another "white lie", referring to the recent admission by Finance Minister Kittiratt Na-Ranong that he told "white lies" about economic matters.
Senator Prasarn Maruekapitak, during yesterday's Senate meeting, expressed doubt about government claims of massive rice sales. He said his sources among rice exporters were unaware of any recent signs that rice of such a huge volume was shipped from Thailand.