Rice Scheme Will Hurt Thais and Help Vietnam

Thailand–Consumers face prospect of high prices, low quality rice from Burma, Cambodia: TDRI. While consumers and taxpayers will suffer from the government’s controversial rice policy, Vietnam will substantially gain, the Thailand Development Research Institute (TDRI) has warned. Ammar Siamwalla, a prominent economist, yesterday asked the government to answer hard questions on the rice pledging scheme – its cost burden, impact on consumers, and farmers’ and government ability to boost global market prices. “As the government is set to buy paddy at Bt15,000 per tonne from farmers, it has to build up a large stockpile this year – and years later it must accumulate ever larger and larger stockpiles in order to maintain these high prices, which will in the end lead to high costs for taxpayers,” Ammar warned at a TDRI press conference yesterday. When the government releases rice from the stockpile, the price would drop in the global market, which would result in more losses. “It’s a dilemma,” he said… He said farmers would ignore developing grain quality as the government had set up a high pledging price without regard to rice quality. The pledging project would draw a flood of rice from Cambodia and Burma. The market mechanism would be destroyed and only millers and a few exporters who joined the pledging scheme would survive, as the state would monopolise rice trading. Past attempts by the Thaksin government to form a rice cartel with Vietnam in order to influence global prices had been a proven failure, he noted.