Media War

exposing media bias in Thailand

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…

Advertisements

May 16, 2009 - Posted by | "Rice money" | , , , , , , , ,

13 Comments »

  1. […] I am trying to follow the development in the “rice money“ saga in Thailand  as well as in general  the farmers plight. because rice is the main food in this […]

    Pingback by “rice money” & BJT party « Media war | June 8, 2009 | Reply

  2. Reuters :

    Thai Hot Stocks-Energy firms, Banks fall, CP Foods up
    http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSBKK48150120090608

    ” CHAROEN POKAPHAND FOODS CPF.BK UP ON PROFIT OUTLOOK

    Top chicken exporter rose more than two percent to 4.52
    baht, its highest since May 15.

    CPF said on Friday its 2009 net profit would exceed the 3.1
    billion baht ($91 million) it earned last year
    , and it expected
    to pay a higher dividend in 2009 compared to a year ago.”

    well, food is always in demand, even during economic crisis.

    Comment by antipadshist | June 8, 2009 | Reply

  3. Cairns Group meets on agriculture, Doha round
    http://www.btimes.com.my/Current_News/BTIMES/articles/cairns/Article/

    “Nineteen leading agricultural exporting nations, including Australia, Brazil and South Africa, kicked off talks in Bali yesterday aimed at pushing forward troubled world trade negotiations… the Cairns Group accounting for more than 25 per cent of the world’s agricultural exports…

    The protection of farmers from price swings or market implosions, such as subsidies for agricultural products, has emerged as one of the trickiest topics in the Doha round…

    The Cairns Group consists of Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Indonesia, Malaysia, New Zealand, Pakistan, Paraguay, Peru, the Philippines, South Africa, Thailand, and Uruguay.”

    Comment by antipadshist | June 7, 2009 | Reply

  4. Korn: Strong baht a concern
    Liquidity to be used on raw material imports

    http://www.bangkokpost.com/business/economics/18001/korn-strong-baht-a-concern

    Public debt will rise to 60% of gross domestic product over the next two years, which we think is acceptable…

    M.R. Pridiyathorn said purchasing power in rural Thailand could decrease in the second half of the year as merchants expect the government to sell paddy from its inventories at a cheaper price than it paid farmers

    I would say that not only farmers would feel it – because obviously ALL the food products and other daily necessities prices will steadily increase, as well as petrol (or whatever fuel). so, Baht will be devalued to help decreasing export, and prices will increase – that means people will be able to buy LESS stuff for the same money.

    therefore it is too obviouls that purchasing power will decrease.

    that’s why for example SPF corporation (see previous comment), the leading company selling foods in Thailand, ahs already adjusted their investment plans accordingly – more than 50% they are going to invest abroad !

    Comment by antipadshist | June 6, 2009 | Reply

  5. somewhat related news about leading agri products trader :

    CPF investment plan back on track

    Overseas businesses offset local slump
    http://www.bangkokpost.com/business/marketing/18007/cpf-investment-plan-back-on-track

    Encouraged by healthy business growth in the first quarter, Charoen Pokphand Foods Plc (CPF) is investing a total of 4.5 billion baht this year, including 2.5 billion in overseas expansion.

    The spending figure is in line with the company’s original plan, which had been under threat. CPF executives had cautioned earlier that it may have to cut back on investments because of a weak outlook.

    Expansion of foreign operations would lift sales overseas at a time when the economy is poor at home, said Adirek Sripratak, the president and CEO of the country’s largest listed food processor.

    CPF plans to invest about 2.5 billion baht this year to expand its overseas operations in Russia, India, Turkey, Malaysia, the Philippines and Laos….

    Mr Adirek said that after Russia, the company would look to invest in Ukraine and Eastern Europe…

    CPF reported a net profit of 770.5 million baht in the first three months of this year, an increase of 70.8% from 451.24 million the year before, on sales of 34.77 billion, up from 33.86 billion.

    CPF shares rose yesterday on the Stock Exchange of Thailand by 10 satang to close at 4.38 baht, in trade worth 154.93 million baht.

    Comment by antipadshist | June 6, 2009 | Reply

  6. FTI backs rice mortgage policy
    http://www.bangkokpost.com/breakingnews/145320/fti-backs-rice-mortgage-policy

    Payungsak Chartsutthipol, vice chairman of the Federation of Thai Industries (FTI) said on Saturday that he supported the government’s decision to expand mortgage quota of off-season rice from four million to six million tonnes.

    Mr Payungsak the quota expansion is necessary as the country is being hit hard by impact of global economic recession and that the government has to help shore up prices of farm products to boost the economy of the grassroots sector.

    Comment by antipadshist | June 6, 2009 | Reply

  7. Panel ups off-season rice, shrimp pledging volume
    http://www.nationmultimedia.com/2009/06/05/business/business_30104433.php

    By THE NATION
    Published on June 5, 2009

    The National Rice Policy Committee yesterday approved the extension of the off-season rice pledging programme by 2 million tonnes at a cost of Bt23.6 billion plus administrative expenses of Bt1.16 billion.

    Funds to cover the larger quota will come from a Bt130-billion credit facility aimed at propping up agricultural product prices.

    The Farm Policy and Farmer Assistance Committee is also expected to approve a pledging programme for shrimp farmers today, which will need about Bt1.3 billion-Bt1.4 billion in funding.

    The rice committee, chaired by Prime Minister Abhisit Vejjajiva, also resolved that the intervention would not be further extended, Commerce Minister Porntiva Nakasai said.

    The scheme, ending next month, originally targeted only 4 million tonnes.

    She said the extension was based on the Agriculture Ministry’s new estimate that the second-season rice crop would reach 8.2 million tonnes instead of 7.6 million.

    “There was extensive discussion on additional output. The Commerce Ministry was assigned to investigate this issue and if any irregularity is found in this pledging, all parties must file complaints immediately,” she said.

    The pledging price was kept at Bt11,800 per tonne.

    The ministry was assigned to come up with a clear policy on rice prices for the next harvest season and submit the plan – which could involve selling rice in the commodity market or guaranteeing prices for farmers – to the committee within a month.

    The committee also agreed that stabilising prices through the pledging programme should end, given the government’s fiscal predicament.

    Today, Deputy Finance Minister Pradit Patarapradit, as chairman of the rice-pledging sub-committee, will call for a meeting to proceed with the pledging enlargement, which involves allocating quotas to each province.

    so, Abhisit personally oversees this matter abour rice selling and buying.

    interesting what will be the new system ? most probably it will be rather old stuff mostly benefiting middlemen brokers, millers and rice exporters – all those blood-suckers who are largely responsible for all this mess.

    Comment by antipadshist | June 5, 2009 | Reply

  8. Rice mortgage quota increased by 2 mln tonnes
    http://www.bangkokpost.com/breakingnews/145163/rice-mortgage-quota-increased-by-2-mln-tonnes

    By: BangkokPost.com
    Published: 4/06/2009 at 07:30 PM

    The National Rice Policy Committee resolved at a meeting on Thursday to increase this year’s rice mortgage quota from 4 to 6 million tonnes, involving a budget of 24 billion baht. The mortgage period ends on July 31.

    The meeting, chaired by Prime Minister Abhisit Vejjajiva, was also attended by Deputy Prime Minister Korbsak Sabhavasu, Commerce Minister Porntiva Nakasai, Deputy Commerce Minister Alongkorn Polabutr and Agriculture Minister Teera Wongsamut.

    The mortgage price will remain at 11,800 baht per tonne. The decision to increase the quota responded to a demand made by farmers who rallied in many parts of the country for government’s help.

    Comment by antipadshist | June 4, 2009 | Reply

  9. another news is – in S. Thailand shrimp-farmers has blocked the Tisulananda bridge in Songla (bridge named after Prem) in protest of gov. not helping them – they lose a lot of money.

    the interesting thing about it is that Songkla is a power base of Democrats, and a birthplace of Prem

    Comment by antipadshist | June 3, 2009 | Reply

  10. Farmers threaten to besiege Bangkok with farm trucks next week
    http://www.nationmultimedia.com/breakingnews/30104304/Farmers-threaten-to-besiege-Bangkok-with-farm-truc

    The Thai Farmers Association Wednesday threatened to deploy farm trucks or e-tan trucks to besiege major roads linking Bangkok to other regions.

    Wichian Puanglamchiak, vice president of the association, said the besieging would stage to pressure the government to continue the rice pledging scheme.

    The government has planned to use price guarantee instead of the pledging scheme.

    Wichian said representatives of the association’s members from 40 provinces will drive their farm trucks to Bangkok.

    They would block the Asia Highway from the North, the Phaholyothin from the Northeast, Sukhumvit Road and Motorway from the East and Phetkasem Road from the South and West.

    in some places it has already started:

    Farmers block highway; demand government rice support continuation
    http://enews.mcot.net/view.php?id=10187

    CHIANG RAI, June 3 (TNA) — More than 200 rice farmers in Thailand’s northernmost province of Chiang Rai on Wednesday blocked a highway once again, demanding that the government continue its rice support programme.

    The protesting farmers blocked Phaholyothin highway in Phan district, a road leading to Phayao, after learning that the government plans to use a price guarantee programme instead of a pledging or mortgage scheme for major crops.

    They installed tents and used loudspeakers on their cars, stopping all traffic on the highway.

    The protesters demanded that provincial authorities locate silos to store their crop at prices fixed by the government, with payment to be made within three days.

    About 250,000 tonnes of rice in Chiang Rai now await harvested.

    They threatened to block the highway until the government extends rice mortgaging scheme, or a better solution is found.

    In Bangkok, Prime Minister Abhisit Vejjajiva told journalists that the Cabinet agreed Wednesday to fix sugarcane prices.

    He said the quota of the government-sponsored rice mortgage scheme is full while rice in some provinces has just been harvested.

    The rice policy committee has been assigned to determine if the quota should be increased.

    The committee will meet Friday and a solution should be found, Mr. Abhisit said.

    Comment by antipadshist | June 3, 2009 | Reply

  11. THAILAND: Retail Draft Law To Be Submitted Soon

    http://www.kamcity.com/namnews/asp/newsarticle.asp?newsid=47439

    “Thailand’s Commerce Ministry has announced that it plans to submit a revised draft retail and wholesale business bill to the Cabinet in July, as it tries to get the bill passed through the current government.

    The draft is covers regulations regarding large and small retailers, with particular focus on the role of hypermarkets and international chains. The Ministry said the committee that redrafted the bill included representatives from small and large retailers, consumers and suppliers who referred to retail laws of other countries. “

    Comment by antipadshist | May 18, 2009 | Reply

  12. Lychee farmers give tommorow as deadline for govt to solve problems
    http://www.nationmultimedia.com/breakingnews/30102946/Lychee-farmers-give-tommorow-as-deadline-for-govt-

    “Thousands of lychee farmers on Monday spilled about two tons of their fruits onto a road in front of Chiang Mai’s Fang district office to protest over the low prices of the fruits.

    They demanded the government to solve the problems.

    On May 13, The farmers who came from Fang, Mae Ai and Chaiprakarn districts of Chiang Mai said they had asked the government to compensate for the loss and to set up a long-term fund of Bt250 million.

    President of Lychee Farmers Coopratives in Chiang Mai Adul Intakhao said there was neither any progress nor answer from the government. “We decided to rally again as we want to know if the government will help us or not.”

    He added that the farmers will give the government until Tuesday (May 19). If the government does not discuss their problems in the cabinet meeting on Tuesday, they were ready to block main roads in the province which will surely paralyse the traffic.”

    Comment by antipadshist | May 18, 2009 | Reply

  13. related news ….

    Now Ch. 9 (MCOT) shows the news report that farmers in North Thailand (Lamphun, Chiang Mai) are cutting trees in their Lychee gardens in protest to government’s doing NOTHING , ZERO to help them – although promised. each Lychee tree can live up to 100 years …

    Lychee fruit is in season now, and farmers can’t sell it at all.
    the price offered to them (I guess by brokers / middlemen) is too cheap. so, farmers see no any other alternative than to cut down those big old trees…

    Comment by antipadshist | May 16, 2009 | Reply


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: