Pluses and minus
With the heat shifting in the Thai rice pledging scheme let's focus on Cambodia.
The pluses:
+ Cambodia has set it's hopes on China. The PPP (Sep. 16) notes that
'State-owned Green Trade Company has signed an agreement with China’s Shandong Meijing Rice Co Ltd to export 100,000 tonnes of Cambodia’s milled rice'.
+ Cambodia's rice exports still increasing. The Cambodian Daily (Sep. 24):
'Cambodia exported 221,027 tons of milled rice in the first seven months of the year, an increase of 103 percent compared to the same period last year, according to figures from the Ministry of Commerce'.
+ Not only are overall exports up considerably, organic rice exports from Cambodia have already doubled compared to last year (PPP, Sep. 10).
The minus:
- The
government though does note that this years rice planting has fallen short by 5%,
but as productivity would increase, expectations are that crops would be similar or higher
than previous years (PPP, Sep. 4). But this was before the heavy rains of this month ....
And then a big threat?
The no. 1 and 2 markets for Cambodian rice are EU's Poland and France.
Exports are facilitated by the EU EBA programme which ensures low
tariffs on imports of agricultural produce from Cambodia.
However opponents of the scheme are gradually gaining influence to change the
policy so as to include basic human rights as a rule against which
importing nations can be measured so as to benefit from the EBA.
Inclusive Development International has just published a report on how
especially in Cambodia's sugar sector the EBA is subsidizing and is condoning
of amongst others child labour, forced displacement, government
sanctioned violence and arbitrary detentions.
Let's hope the report
manages to wake up those in the EU concerned with acting on behalf on the unnamed victims in this (source).
Skirmishes
Problems elsewhere in Thailand's agricultural hinterland have detracted the ever-changing media seeking for a new story to ditch the rice pledging scheme for newer frontiers.
Capturing the public eye are those farmers who are losing the possibility to sell rubber at guaranteed prices to their government. As farmers block major highways in Southern Thailand and pitch battles taking place with riot police, it illustrates just what handing out subsidies entails: the impossibility to roll back the policy.
The only way forward is to hope that either inflationary pressures catch up or world market prices render price guarantees redundant.
Especially in Nakhon Si Thammarat the overall sphere is grim (f.i. Nation, Sep. 4) as tens of thousands of protesters have taken to the streets. The government have tried to divide the growers by offering hand-outs which were accepted by those (rice-dependent) farmers in the north and central areas of Thailand but not in the stronghold of the opposition, the south, where farmers are more dependent on rubber output.
The Bangkok Post has reported that the government want cave in (Sep. 9).
Not being
able to quell the protests, the government now believes the protesters
are actually all stooges of traders who have been stockpiling rubber
hoping for the government to acquiesce and raise prices (Nation, Sep. 19). Behind the stockpiles would of course be opposition traders.
Not only are rubber
farmers been upset without the possibility of getting their hands of a
share of the government loot, corn farmers seek the same. The Bangkok
Post (Sep. 26) reports on road blocks in the north of the country, farmers wanting an extention of current purchasing programmes by the government.
Back on rice
Even cautious downgrades in the pledge scheme are unacceptable to farmers (Bangkok Post, Sep. 6).
A few days later (Sep. 9) the Nation chimes in:
'Vichian Phuanglamjiak, president of the Thai Farmers Association, said farmers were still poor and wanted a high price to deal with their high production and living costs. Although the government plans to cut the price to Bt13,000 a tonne, he said farmers were expected soon to call for a rate of Bt14,000 a tonne.
"The government will face never-ending subsidies if it does not help farmers reduce the cost of production or help them increase yield in the long run," he said'.
Transparency? Even the Thai government is secretive on the deals it has made (Nation, Sep. 15). So says the opposition.
Then, presto, 2 days later it is confirmed that Thailand will sell 1.2 million tonnes to China (Nation, Sep. 17):
'The government yesterday insisted it had secured a rice sale to China, with a Thai official in Beijing confirming the 1.2-million-tonne contract, which is part of Thailand's plan to export 4 million-5 million tonnes of rice to that country this year.
While Commerce Minister Niwattumrong Boonsongpaisan flatly dismissed the Democrat Party's speculation that his ministry is faking the rice deal with China, Phaichit Viboontanasarn, the commercial attache at the Thai Embassy in Beijing, confirmed the deal with a Chinese state enterprise, saying the price is close to the Bt15,000-per-tonne pledging price but lower than US$600 (about Bt19,020)'.
The Thai government have exonerated themselves. Rotting rice dates to 2008, well before current policy (Bangkok Post, Sep. 18):
'A probe by the Marketing Organisation for Farmers (MOF) concluded that the rice was damaged during the 2011 floods, he said. It also ruled that the burned rice had spontaneously combusted
...
Democrat MP for Phitsanulok Warong Detkitvikrom said he would petition the National Anti-Corruption Commission next week to also investigate the matter. He questioned the MOF's spontaneous combustion conclusion, saying this explanation did not make sense. Mr Warong said he strongly believed the rice was intentionally destroyed to cover up irregularities that would point to corruption in the pledging scheme'.
The Thai government has vowed to continue the practice of rice-pledging (Bangkok Post, Sep. 28), nothing new there.
Why? Because it raises farmers incomes.
The same article also refers to a survey of farmers where most farmers responded as being quite satisfied with the governments rice-pledging scheme.
'"Although rice farmers said they had earned more because of the pledging project, the government needs to find an 'exit policy' [and to decide] whether to continue the project for long, as it has created huge losses for the country and damaged rice-sector development," said Thanavath Phonvichai, director-general of the UTCC's Economic and Business Forecasting Centre [organisation which conducted the survey].
The government should conduct research to weigh whether the pledging policy really benefits the country and the majority of people, he suggested.
Based on a survey of 1,228 rice farmers, a poll showed that most were "quite satisfied" with the pledging project, as it had enabled them to earn more. On average, each farmer had earned an additional Bt58,314 a year since the scheme was launched.
But despite farmers' satisfaction with the programme, the UTCC said the government would need to spend a huge amount each year on a never-ending subsidy if it did not come out with a clearer policy for the sustainable development of rice farming and trading'.
The Bank for Agriculture and Agricultural Cooperatives (BAAC) notes that it's not the amount of money involved in the rice pledge scheme but the lack of transparency leading to questions about whether or not the farmers were receiving their fare share (Nation, Sep. 25).
Their suggestion:
'A central unit such as the Office of the Prime Minister should monitor the programme's spending'.
Post session
Oryzae.com (Sep 27) reports that prices have dropped by 10% compared to the same date last year.
Releasing
rice stocks from Thailand has a downward effect on Vietnamese rice
prices and thus on returns to Vietnamese rice farmers (Global Times, Sep. 9). It also affects exports:
'According to VFA, in the first eight months of this year, Vietnamese
rice exporters had signed contracts for the export of over 7.2 million
tons of rice. However, contracts worth 1.2 million tons were canceled,
and only 4.7 million tons were shipped abroad during the period'.
