and the “rice money” goes to …
we’ve already blogged about the “rice money” earlier.
yesterday there was an article on Bkk Post which provides further illustration of the points raised in that previous post.
The government is set to sell 2 billion tonnes of milled rice from its stockpiles to 13-15 winning exporters at an average of 15,000 baht per tonne. According to Commerce Minister Porntiva Nakasai, results of the rice sales would be submitted soon to the Cabinet for acknowledgement to prevent a repeat of the dispute that happened with the proposed auction sale of mortgaged corn…
According to Mrs Porntiva, the winning bidders for the government’s rice sales include leading rice exporters such as Chaiyaporn Rice, Capital Rice, Asia Golden Rice, Chia Meng and Siam Indiga and C.P. Intertrade.
Mrs Porntiva said the selling prices were regarded as satisfactory, despite being relatively lower than current market prices.
Current market prices stand at about 16,500 baht per tonne, while the government’s pledging prices including rice processing and related warehousing costs are about 24,000 to 28,000 baht per tonne.
That means the government is prone to losses of up to 20 billion baht from this rice sale, according to an industry source.
However, the commerce minister said the time is ripe for releasing the state rice stockpile, as any delays would lead the government to more losses because rice prices are under pressure to drop due to the global economic recession and oversupply.
now, let me get this straight :
1) government buys rice from …. BROKERS / middlemen (because naturally farmers can’t sell their rice directly to gov. or foreign buyers due to being unable to meet the rigid rules set by Commerce Ministry) and millers according to its established pledging program.
HERE middlemen & millers profit hamdsomely. (especially because they buy from farmers for LESSER price than established by gov – which is as I recall 12-14000 Baht per tonn – real price farmers get may be at best 10’000 Baht).
2) it costs government (aka TAXPAYERS) 24’000 – 28’000 Baht (about 706$ – 824) per tonn inlc. all the expenses.
(I wonder about – who profits from the storage renting and other related services, possibly it is those same middlemen / millers)
3) then gov. sells back to exporters for LESS price (almost half !) of all the expenses per tonn – 15’000 Baht (about 441$) per tonn.
here comes the part mentioned in the article – that at this point gov. loses around 20 bln Baht (around 0.6$ bln) !
this is to please the EXPORTERS.
4) expoters sell this rice abroad for 16’500 Baht (485$) pet tonn and profit min 1’500 Baht (44$) per tonn. all together they (all those mentioned 13-15 exporters) get total 3 trillions Baht (or 88$ bln ) – to get some idea, if we suppose that each of those exporters gets equal share, than it would be approx. 6$ – 7$ bln for each of them !
so, the conclusion is :
– farmers (the producers of rice) are alwasy at all, getting peanuts, prices less than even pledged by gov. and definetely than intern. market prices – just hardly able to meet the ends, and therefore are in CONSTANT debts to millers, fertilizer selling companies, banks …
– middlemen / millers as well as exporters are getting fatter – NO MATTER WHAT, crisis or not, which government changes or not;
– government LOSES money to MAINTAIN this system – keep middlemen / millers getting fatter.
although on the surface it looks like gov. is “helping farmers” – in reality it helps those PARASITES only
– Taxpayers are paying for the losses which gov. makes, and yet the prices for EVERYTHING – including that very rice ! – are ever increasing.
so, who are the losers ? ——> ordinary folks like farmers and taxpayers.
who are the winners? ——-> gov. and all their patrons – all those big companies and conglomerates (exporters) as well as middlemen / millers (local provincial parasites)
the very logical step would have been to eradicate ALL the “in-between” (millers, brokers and exporters) :
either gov. changes the system so that it owns the mills andis able to buy directly from farmers,
or farmers are allowed to form cooperatives which would own those mills and storages and are able to sell directly to foreign buyers,
or farmers are allowed to do a “Contract farming” – thus making direct deals with foreign investors who would pay for all the stages from sowing to exporting, and farmers get the PURE profit.
whatever …. but obviously this present system is HURTING the country: because majority of its people are suffering (farmers, workers, and taxpayers), gov. loses money too, AND Thailand loses trade to competitors !
it is too damn obvious that if those middlemen could be eliminated – then Thailand could compete MUCH BETTER on international market AND still farmers would get a better prices for their produce – AND government would also get the good piles of guap in its coffers !
but apparently this logic escapes Thai government. the only explanation is – because government itself is lobbied (or “kept in the pocket”) by those very middlemen and huge companies who actually “eats” (or rather “sucks blood” ?) all the “rice money” (as well as whatever other agri products) !
will it be EVER changed ? very unlikely – not till some people are going to lobby gov. for such change.
and somehow – you just CAN NOT see it in Thai media at all ! I mean – it is too damn obvious, but … mysteriously UNSPOKEN !
no wonder that Thai alite and all those reactionary middle-class are trying hard to preserve their status quo and keep the grassroot movement at bay by any means !
they must be scared sh1tless to lose all their sweet priveleges and profits. but I have the feeling that sooner or later something is gonna give in…