The controversy over the rice-pledging scheme is not yet over, as the National Rice Policy Committee did not reach any decision on the expected modifications in the scheme.

Instead, after the meeting yesterday which was undertaken without participation by Commerce Ministry's officials, Commerce Minister Boonsong Teriyapirom announced that the much-touted loss figure of Bt260 billion is wrong. He referred that to the testimony by Supa Piyajitti, a deputy permanent secretary for finance who oversaw a sub-committee tasked to estimate losses incurred by the scheme.

The controversy kicked off when Supa was re-assigned to another area of the scheme, after her sub-committee revealed that losses in the 2012/2013 harvest year amounted to Bt260 billion. The huge loss led to heavy criticisms and a caution by Moody's Investors Service, which is concerned over the public debt. No reporters had a chance to talk to her yesterday.

"There was no such figure in the paper," Boonsong said. He did not state the actual loss figure, though, saying that it will be finalised at another meeting on Monday. On the day, the committee will also finalise the loss figure for the 2011/2012 harvest year. Based on the lowest market prices, the sub-committee came up with the Bt130 billion figure. The Commerce Ministry's estimate is however based on the purchase cost.

Boonsong chaired the meeting on behalf of the prime minister. Finance Minister Kittiratt did not appear at the meeting, though he told reporters in the morning that he would. Kittiratt also indicated that the scheme could be modified, particularly in the price to meet changing conditions.

Price-cut advised

Deputy Prime Minister Kittiratt Na-Ranong has advised the prime minister to lower the government's paddy pledging price to the reference market price after the rice pledging scheme came under fire from a major international credit rating agency and a prestigious local think-tank.

"I have already proposed the idea to the prime minister that every project could be revised such as the change in the policy interest rate. Thus, the pledging condition could also be changed to ensure smooth operations in the long run and flexibility in regard to the market situation and currency value," Kittiratt, also the finance minister, said yesterday.

The government has fixed the pledging price at Bt15,000 a tonne for paddy rice because it saw that the rice price would be increased.

Kittiratt has said the National Rice Policy Committee could consider the revision of the pledging condition.

PM's Office Minister Varathep Ratanakorn instructed the Commerce Ministry and the Bank for Agriculture and Agricultural Cooperatives to provide historical information about the rice pledging programme with the aim to change some pledging conditions.

The details that are required for study are total inventory, pledging volume in the past seasons, farmers' incomes, the conditions to set the pledging price and the current market price.

Varathep has been assigned to collate data related to the rice-pledging scheme from all government agencies so that the government can clarify confusing figures.

Last week, Deputy Commerce Minister Natthawut Saikuar said the government had initiated the pledging scheme to boost farm incomes. If farmers realise a better standard of living, the government could change the pledging conditions.

The Thailand Development Research Institute (TDRI) has called on the government to cut the rice pledging price to save costs and staunch the red ink from this policy.

Somchai Jitsuchon, the TDRI's research director for inclusive development, said that if the government cannot sell its rice stocks at a high price, it has to face losses.

"In my view, the best way is to cancel this policy," he said.

Source: The Nation