The government's price pledging scheme has opened a loophole for unscrupulous rice millers to recycle their old stocks to cash in on the high subsidy prices.

The corrupt practice would force the government to shoulder huge losses and also encourage millers to break purchase contracts due to the lack of a bank guarantee.

The Commerce Ministry yesterday reported that the excessive volume of rice offered for the pledging project could be partly blamed on old rice from previous crops that millers were claiming was new rice from the current harvest.

Commerce Minister Porntiva Nakasai said the ministry will soon send special teams to inspect each miller and look for fraud in the government's rice pledging scheme.

The government last week enlarged the pledging quota for off-season rice from 4 million to 6 million tonnes after it had already accumulated about 4 million tonnes of paddy rice in its warehouses.

The government is gradually starting to buy more rice to meet its target of procuring 2 million tonnes of paddy rice from 47 provinces.

However, the ministry has received complaints from farmers in some northern provinces, including Chiang Rai, Chiang Mai and Phayao, that the extended quota for their province was already filled up within a few days.

The ministry will also check if millers participating in the government's project have honoured their contracts to buy rice from the market.

Under the contracts, rice millers have to post a bank guarantee for 70 per cent of the total value of their purchases under the pledging programme. If they cannot meet the requirement, they have to get 50 per cent of their capacity from the market.

Porntiva said some millers have broken their contracts, so new rice from the second harvest has overflowed to the government's pledging scheme.

If the ministry found any millers reneging on their contracts or circumventing the pledging scheme with old rice, they would be subject to criminal punishment and blacklisted from participating in the government's activities in the future, she added.

Source: The Nation