Some violences in BKK are from the problem with Thai farmers that the cause is rice pledging project. The rice pledging project was at the heart of the Pheu Thai Party’s populist platform that swept Yingluck Shinawatra to power in the 2011 general election. But it has left the country with record rice stockpiles and hundreds of billions of baht in losses at taxpayer cost while throwing farmers into debt after the caretaker government delayed making payments for pledged rice.

The Pheu Thai-led government had dreamed of using the rice subsidy to kill two birds with one stone. It could boost the income of farmers, who are strong supporters of the party, and gain leverage in the in the global market on the assumption that rice prices would soar once a large supply was withheld from the market. In October 2011, the Yingluck government launched the rice pledging scheme by buying  rice from farmers at 40-50% higher than what they could expect from selling to rice traders in the market. Millions of farmers eagerly lined up to pledge their paddy. The government, however, lost its bet that hoarding rice in massive stockpiles would drive up prices. The past few years have seen the global market flooded with rice, due to favorable weather and the subsidy attracting multitudes of farmers. Other countries took the opportunity to ramp up production, and Thailand relinquished its crown as top rice exporter to India and Vietnam.

Even though the pledging scheme has managed to increase farmer income, a side effect is that rice farmers across the country have run up debt on the expectation of a steady revenue stream. They bought new pickup trucks, motorcycles and smartphones through consumer financing. Unfortunately, Ms Yingluck dissolved the House last Dec 9 without a borrowing plan to pay farmers. Given her status as caretaker prime minister, her government faces legal limitations on new borrowing; this in turn has discouraged banks from extending bridge loans to pay farmers. Available funds have dried up, and state rice sales are unable to raise sufficient cash at a brisk pace.

The caretaker government is months behind in its payments to more than a million farmers, leaving them in a cash crunch and at the mercy of loan sharks. A-58-year-old farmer who has been protecting the Min of Finance said she has resorted to borrowing from an informal source that charges 6% in monthly interest, just to support her living. So now, she has so much of due.

armers have cried foul over Pheu Thai’s rice policies, the party recently bought advertising in local newspapers insisting that Ms Yingluck will continue to pursue the rice pledging scheme if she successfully retakes the helm. The announcement highlighted how the scheme had helped raise the income of millions of farm households. But it did not state the losses incurred from the subsidy

A Finance Ministry subcommittee tasked with the pledging project’s accounting said losses could reach 400 billion baht for the first two harvest seasons. Former finance minister and Bank of Thailand governor MR Pridiyathorn Devakula estimated at least 425 billion baht in losses. But this doesn’t make the farmers offensive because not everyone get the money but just someone get.

Please to be continue about this case that how end.

THANKS

MILK#8 610

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