The sharper edge to traveling in Asia

Why rice is fueling the latest Bangkok protest

Written By: herbrunbridge - Jan• 21•14

RiceBag1cRegarding the series of beefs the 100,000 street protestors occupying Bangkok are voicing today, perhaps the most difficult for westerners to grasp is the rice pledging fiasco.  Here are the salient issues simplified, from a WoWasis perspective.

Traditionally, Thailand has been a major world exporter of rice. Wanting to raise the price by lowering the availability of Thai rice, Prime Minster Yingluck Shinawatra’s Pheu Thai party in 2011 came up with an idea to pay rice farmers to pledge their crops to the Thai government, rather than to sell it on the open market. The Thai government would then release only what it deemed necessary to give its availability low and its price high.

Then two problems occurred. There was a glut in the world rice market, with players such as India, Vietnam, and the United States contributing significantly to what was available in the market. And te glut, inevitably, lowered prices. The world wasn’t buying expensive Thai rice. And so Thai rice sat unsold.  And with the lack of rice revenue from its warehouses, the executor of the funds, the Bank for Agriculture and Agricultural Cooperatives (BAAC) couldn’t pay this year’s pledges. Thousands of Thai rice farmers are begging for pledge money that the government doesn’t have, funds the farmers desperately need for seed rice and fertilizer. As a solution to this mess, the Finance Ministry has just raised more than 32 billion baht by selling bonds to repay rice farmers, which many are saying violates an election law which states that caretaker governments (such as Yingluck’s) cannot create debt that will become the responsibility of the succeeding government.

The caretaker government refuses to divulge exactly how much rice it has currently stored, but some estimate that it would take two to three years to sell off what’s in storage, once the pledging program is stopped. If it ever is.  In addition, Yingluck may end up facing charges that she acted negligently as chairwoman of the National Rice Policy Committee, which oversees the program.

That, in a nutshell, is at the heart of the rice matter, along with the standard allegations of corruption part and parcel to virtually every Thai governmental program. The folks protesting on the streets want the rice pledging program to end because it’s been a failure, economically. The caretaker Pheu Thai government wants to maintain it, saying it will pay for itself in the longer term.

Two lethal bombs have been thrown into crowds of Bangkok protesters within the past three days. The Thai army is waiting in the wings for a compelling event to cause them to free the streets (the protest is now in its eight day of blocking several of Bangkok’s biggest intersections).  There are a number of issues feeding the flames of discontent with Yingluck’s caretaker government, and the rice debacle is a major ember in the tinderbox. With the elections looming closer, Thais and expats alike are wondering if and when hot tempers and burning ambitions will turn the whole thing into an urban bonfire.

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