Rant: Thailand’s rotten rice scheme

Now I prefer not to jump on the bandwagon about Thailand’s rotten rice scheme thus far, agricultural subsidising is a common practise throughout Europe and the US and its become a noisy issue in Thailand because of Thailand’s loss of its number 1 exporter status, Moody’s calling it an issue (do people still listen to these rating agencies?!) and the government’s recent flip flopping on the price as it clearly favours political support over economic common sense. In principle I still like the idea of ensuring a country has enough food to support its own population however the execution of this scheme has been absolutely rubbish thus far. So see below for some of the issues/facts/articles to read on whats been happening thus far.

Issue:

  • The government has been flip flopping over the rice scheme program
  • Thailand has lost THB 130 billion thus far (potentially far more), representing about 1-2% of Thailand’s total GDP

Facts:

  • Thailand has stored up to 17 million tonnes worth of milled rice since the program started in October 2011
  • Pre Scheme Thailand exported a record 10.6 million tonnes of rice in 2011
  • 2012 Exports were only 6.9 million tonnes
  • 1Q13 exports were 1.56 million tonnes, annualised 6.24 million tonnes, well short of the governments 8.5 million target
  • Thai rice is priced at US$ 540/tonne, vietnam @ US$370/tonne

Articles to read:

http://www.bangkokpost.com/opinion/opinion/357863/rice-scheme-critics-need-a-dose-of-empathy

http://www.reuters.com/article/2013/06/19/column-russell-rice-thailand-idUSL3N0EV0B920130619

http://online.wsj.com/article/SB10001424127887324577904578557050631839748.html

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