Crisis?

If only ...
Since the last update 3 weeks back the Pandora box of disassociations concerning the Thai rice pledging system has fully opened. It would require a  taking on as a day job all the links and reports that have popped up since then; so what follows is just a recap:

• 28-7 This years programme may set a ceiling on the pledges per farmer (BP; note 20+ comments!).
• 30-7 TDRI report in the Nation that exports from Thailand have halved; shelve the current pledging system. BP highlights the fact that maybe more than 1 million tonnes pledged are actually from neighbouring countries, while 2 million+ may well have been double pledged:

  'He [Nipon Poapongsakorn, president of the Thailand Research and Development Institute (TDRI)] suspected that about 1 million tonnes of the discrepancy might have been smuggled from neighbouring countries by local traders to take advantage of the high prices offered by the pledging programme'.

  Again huge amounts of comments.
• 2-8 Nation is alarmed by Thailand losing it's position as the globe's no. 1 exporter. It quotes the Thai Commerce Minister as saying that farmers are satisfied, we don't care about the no. 1 position. The article which seeks farmers who profit does throw in a political angle: losing the no. 1 position might hurt the political position of the government of Phue Thai party.
• 2-8 BP mentions there will no lower limits to bids for exports. It is hoping for $700 a tonne!
• 4-8 BP focuses on government anti-corruption plans. High on the list are the rice pledging scheme.  Quote from the PM: She is concerned.
• 7-8 The BP has done the work, or better has found out that the government already knows. It points to millers / warehouses which use all kinds of fraudulent measuring equipment and use fake certificates. It also alleges that public organisations are involved. Even more comments.
• 7-8 The Nation declares the government policy is driving foreign ownership of rice lands. At least so the title makes believe. But then the article declares the oppoisite. Or not?

  'An investigation by The Nation, however, has found little support for such charges in the prime rice-growing Central region. Still, farmers, millers and exporters all say the government is losing control of the agricultural sector because farmers are being lured into selling their land to rich people, who are now growing rice to enjoy higher returns'.

  Running in the same issue it contradicts its own claims by giving voice to 'farmers and trade bodies' who claim that government policies

  '... is distorting prices, benefiting the rich as well as foreign investors, damaging the Kingdom's competitiveness and discouraging the long-term development of Thai rice'.

• 8-8 The BP echoes the former report:

  'Ammar Siamwalla, honorary economist at the Thailand Development Research Institute (TDRI), said the rice pledging scheme was "pro-rich and anti-poor", with high pledging prices raising the cost of living for the entire public'.

  Again 30+ reactions.
• 10-8 The government also claims the rice-pledging system promotes frauds according to the BP, so nothing new? One aspect which might be overlooked is to how to end this scheme. There are certainly no takers!
• Continuing it has the whole pro's and cons as it's highlight of the week.

  'Mr Korn [former finance minister of the Democrat Party] harshly criticised the scheme as a big waste for the taxpayers’ money while benefiting rice millers, landlords who lease their land to farmers, corrupt politicians and only a minority of farmers. But Mr Kittirat  [Deputy Prime Minister] defended the scheme as being beneficial to the majority of farmers and said it will not be dropped or reviewed'.

  It also adds:

  'Meanwhile, the United States Agriculture Department will send its experts to Thailand to study the rice pledging scheme to determine whether the government is distorting market prices'.

• 11-08 The BP now somehow has more news:

  'Huge losses loom in government rice sell-off - Mills overloaded with pledge scheme stocks.

  Somehow this is not news ...
• 13-08 The Nation reports how a parliament panel inspected a couple of mills in central Thailand and found them lacking, i.e. easy to defraud the scheme.
• 14-08 Despite the misgivings, the wheels are being set in motion to pledge the upcoming crop. Over 260 billion Thai baht is required according to the BP, roughly 8 billion $US. One can just imagine how much can be lost to fraud and poor trade policies. The same day, the same newsreel announces that a solution to the warehouse problems is to build more storage capacity. No price tag though ...
• 16-08 BP announces tinkering the scheme will take place so as to placate opponents.

Clearly the last word on the pro's and con's has not been said yet. For the global consumers the huge amounts of rice stocked will need to be marketed some day. The apparent gamble on prices going up seems not to have paid off. At best prices have stabilised. The lonnger term outlook remains unclear according to FAO. This compares to maize prices going to record heights, closely mirrored by wheat prices. For an article on recent developments the Financial Times ( 31-07-2012).

Other export news, Vietnam wants to limit the number of export companies, so as to increase quality, so it seems. Possibly more bad news for Thailand (source). This is echoed in the Businesstimes.vn.

IRRI is still focussed on feeding the needy and seems to only be able to answer their mission with hybrid rice. It notes that more and more research is undertaken in more 'tropical countries'. They also have an interview with Longping Yuan. In the process they manage to downgrade the expectations of increased hybrid yields from 30 to 20%. He also mentions poor suitability to tropical countries. Most of the advantages he mentions only apply to China.

Odd, Thai exporters are sourcing Cambodian and Vietnam rice to supply to African countries as their own rice is unavailable! (source)

On a side line, cashew exports seem to have increased 10-fold according to Phnom Penh Post (31 July 2012). Or have the statistics just changed?