The new government scheme to guarantee the prices of three major crops has cost the Treasury less than the long-standing
The Office of Agricultural Economics (OAE), which regulates the price-guarantee scheme, said last week that Bt56 billion was spent on average every year to subsidise the old pledging scheme, while a budget of no more than Bt34.9 billion would be needed to fund this new scheme each year.
OAE secretary-general Apichart Jongskul said the new scheme was less prone to corruption and easier to manage.
Almost all of the 5.92 million farm households on the OAE's list have registered for this new scheme, while only 10 per cent of a total of 5.7 million households at that time participated in the old scheme.
Under the old "price intervention" or "crop-pawning scheme", the government needed to mobilise as much as 80 per cent of the overall market prices and spend a huge amount on storage of massive supplies of "mortgaged" crops at government-affiliated mills or warehouses.
Under this new scheme, registered farmers can receive the price differential above the median rates set by the OAE, with or without selling their crops. They may keep their crops in storage for sale in the future, at their own risk of falling prices.
Under the old practice, farmers needed to sell their crops to government-affiliated mills or warehouses to obtain basic qualifications to earn the price-differential payments. The government got a huge bill for the cost of storage and faced the risk of the inventory losing quality and thus value due to higher humidity or damage from lengthy storage.
The crops covered by this new scheme are the same - rice for humans, and maize and cassava for cattle.
Farmers would also learn through a more effective system to calculate and regulate median prices each year and forecast future rates in coming years. This would help them make plans for the cultivation or selection of crops.
Corruption was also rampant with the old scheme, especially during the administrations of Samak Sundaravej and Somchai Wongsawat, when the median price was high in the early part of the year and plunged sharply at year-end, prompting massive purchases at huge cost by the government.
The profits from the price differential were so good that unscrupulous officials and farmers colluded to make false reports on the quantity of crops, bringing in crops from neighbouring countries to claim as locally grown.
Apichart said he had heard constant complaints from farmers that the registration process was difficult for them to understand, but he said they would get used to it over time through more public relations.
The process was made difficult on purpose to make corruption more difficult, he said.
A new double-check mechanism was also put in place to make corruption during the local registration process harder.
Source: The Nation
|
