RICE IN THAILAND
According to the Thai government: “Growing rice has been the way of life of Thai farmers since ancient times. Their lifestyle is sifted, molded, and forged in the cradle of a rice civilization, to give rise to exquisite cultural traditions and customs between man and to an immense diversity in its genetic strands. In Thailand, there are about 3,500 varieties, ranging from wild rice, local varieties, and breeds newly created by man. Of the cultivation land utilized by farmers, rice takes up more land than other food crops, making up about 11.3 percent of the entire area of the country. The Central Plains and the Northeast possess larger areas of rice cultivation land, followed by the North and South respectively. Each region grows different types of rice, depending on its geographical conditions. [Source: Thailand Foreign Office, The Government Public Relations Department]
For a long time Thailand was the world’s largest rice exporter. It slipped to No. 3 behind Vietnam and India in 2012. In the late 1980s, Thailand became a leading exporter of rice. It exported over 10 million tons in 2008, compared to 6.8 million tons in 2001and 4. 5 million tons in 1994. The worlds top exporters of rice in 1991 were 1) Thailand, 2) the U.S., 3) Pakistan, 4) Vietnam, 5) China, 6) Australia, 7) Italy, 8) India, 9) Uruguay, 10) Spain.
Thailand has a huge stockpile of rice. Heavy rains in 2005 produced record harvests. Droughts in 2004 reduced the harvest. The Thai government accumulated 4.3 million tons of milled rice after buying rice from farmers as part of a pledging scheme in 2006. In 2008, rice surged to a record $1,080 a ton.
Thailand exports about 100,000 tons of rice to Japan every years, which accounts for 15 to 20 percent of Japan’s imports from Thailand. Most of it is used to make rice crackers and liquor. A little is served at Thai restaurants. A big deal was made in Japan when aflatoxin—a highly carcinogenic toxin produced by fungi—was found in Thai rice exported to Japan.
The world food crisis in 2008 was a boon for Thailand as it made large profits from exporting rice. Later Thailand effectively banned rice exports which helped raise rice prices further.
Rice as Food in Thailand
Rice is such a mainstay of the Thai diet that the verb for “to eat,” “”kin khao”, literally means “to eat rice.” Rice holds a special position in the hierarchy of living things and objects as it is a provider of life. To make sure the rice spirit is content special ceremonies are performed during planting and harvesting. Rice that is dropped on the floor is carefully swept up and great lengths are gone through not to imply anything bad about rice to avoid angering the rice spirit and causing a bad rice harvest.
Thais can be quite picky about the quality and type or rice as well as the temperature and method in which it is cooked. There are many varieties and grades of white rice. The best quality rice is known as “khao hawm mali “ or “jasmine fragrant rice. People in northeast favor Lao style “sticky” (glutinous) rice. Heaps of fragrant jasmine rice are served with almost every dish in central Thailand. Rice porridge is served with toppings such as herbs, pickles and peanuts for breakfast. Sometimes hot water is drained from the pot after the rice is boiled. This reduces the stickiness of the rice.
Thailand is famous for its distinctive long-grain jasmine rice, known for is pearly white color, and sweet “popcorn” aroma. It is usually served steamed and is regarded as best rice to accompany most dishes, including Thai curries. One Thai Senator told AFP, “jasmine rice for the Thais is like Dom Perignon.” Thai’s were outraged when an American scientist announced that he had developed a strain of jasmine rice that could grow well in the United States and patenting the strain. Thais accused the scientist of theft and piracy.
While Jasmine rice is the most coveted, it is also the most expensive. Consequently, most restaurants serve Khao Suoy, “beautiful rice”, a plain white variety that grows in abundance and is consumed with all style of entrée. Khao pad or “fried rice” is made with fried with pork or chicken, chilies and fish sauce, typically with leftover Khao Suoy, so as not to waste leftover rice that is a bit “stale”. Khao Tom is a popular breakfast dish, a salty porridge-like soup that is cooked with pork and garlic. Khao Niaw, “sticky rice” is eaten by hand when served with dishes of northeastern influence, such as grilled chicken (gai yang) and spicy papaya salad (som tam); however, sticky rice is a crucial ingredient in a favorite Thai dessert, sticky rice and mango. [Source: Tourist Authority of Thailand]
Rice is grown in abundance in all parts of Thailand. A common greeting is "”Kin khao rue yang”? (“Have you eaten rice yet?") With the answer "kin laeo“ (“ Yes, I have"), the respondent likewise refers to a meal he or she has taken, with or without rice. For Thais, and all those who know and love Thai food, a sumptuous meal in the hot season is not quite complete without “khao niao mamuang “— glutinous rice steamed in coconut milk served with ripe mango, preferably the variety called “ok rong” , the fruit with a dividing line down its length, which is golden when ripe, with a pleasant sweet aroma and delicate sweet taste. Other top varieties are nam dokmai, thong dam, and thun thawai. A new variety that came out on the market recently is maha chanok, named after a literary work based on a Jataka extolling perseverance, from a story of one of the Buddha's lives, written by His Majesty the King. [Source: Thailand Foreign Office, The Government Public Relations Department]
One Thai entrepreneur hoped to strike it rich, marketing ready-to-eat canned rice. The canned rice comes in three varieties—brown, jasmine and glutinous—and can be prepared by placing the can in poling water for three minutes and empty the can into a bowl and heating in a microwave oven.
Rice Agriculture in Thailand
Rice is Thailand main crop. It was grown by about three quarters of all farm households in the early 1980s. Two main types were cultivated: dry, or upland, rice, grown predominantly in the North and Northeast; and wet rice, grown in irrigated fields throughout the central plain and in the South. About half the 1986 production of 19 million tons was grown in the central plain and major valleys in the North; another two-fifths was produced in the Northeast; and about 6 percent came from the South, which was a rice deficient area. Roughly 8.5 million hectares were devoted to rice production in the early 1980s, about 40 percent more than in the early 1960s. The rice yield was highest in the Center, averaging about 1.9 tons per hectare, which was about a third of the yield per hectare in Taiwan and South Korea. [Library of Congress, 1987 *]
In the 1980s, low productivity was attributed in part to longstanding government policies aimed at keeping consumer rice prices low. The so-called rice premium (in fact an export tax) and occasional quantitative export controls were claimed by opponents to have discouraged production expansion by reducing profitability. Although perhaps a valid argument for commercial rice farming, the policies probably had a minimal effect on the large number of subsistence farmers in the Northeast and North, who produced small, if any, surpluses and whose dry rice was not usually exported. Perhaps more significant was the apparent loss of paddy fertility in the North and Northeast because of poor soil management and the extension in those regions of the growth of lower yield upland rice.
Rice is often still harvested by hand with a scythe, left to dry on the ground for a couple of days, and bundled into sheaves. Rice is dried in the roads because valuable farmland can't be used for sun drying. As a result, imported bags of Thai rice sometimes have passing trucks and motorbikes in them.
Much of the rice produced in Thailand is put in 100 pound bags that are stacked in walls 27 bags high in warehouses along the Chao Phray River in Bangkok. The rice commodities market like most agricultural businesses is highly speculative and a gamble, which the Thai's love. One dealer sold $305 million dollars of rice to Iran, but waited until the last minute to buy the rice from his suppliers. In that time the price of the rice dropped $25 a ton and he walked away with a quick profit of three quarters of a million dollars. [Source: Peter White, National Geographic, May 1994]
Rice Agriculture, Culture and History in Thailand
Rice has always sustained people in Thailand and formed a close bond with their way of life for over 5,000 years. It not only feds people throughout the land but also plays a very significant role in the history, culture, society, and economy of the Thai nation. According to the Thai government: “In an agricultural society, rice, as a cereal, is the stuff of life and the source of traditions and beliefs; it has played an important role in Thai society since time immemorial, providing a strong foundation for the evolution of all aspects of society and culture. Rice is regarded as a sacred plant with a breath (spirit), a life, and a soul of its own, just like that of human beings. To the Thai people, rice is guarded by the goddess Phosop, who acts as its tutelary deity, and rice itself is considered a "mother" keeping guard over the nation's young and watching over their growth into adulthood. [Source: Thailand Foreign Office, The Government Public Relations Department]
Thailand is home to one of the world's oldest rice-based civilizations. Rice is believed to have first been being cultivated in there around 3,500 B.C. Evidence of ancient rice agriculture includes rice marking found on pottery fragments unearthed in graves unearthed at Non Noktha village in Khon Kaen province in northeast Thailand that have been dated to be 5,400 years old and rice husks found in pottery in the north, at Pung Hung Cave, Mae Hong Son dated to be around 5,000 years old. People that lived in a site called Khok Phanom Di in Thailand between 4,000 and 3,500 year ago practiced rice farming and buried their dead facing east in shrouds of bark and asbestos fibers. The oldest rice grains ever discovered in China; they date back to about 5000 B.C.
Thai Fragrant Jasmine Rice
Thai Hom Mali Rice, popularly known as "jasmine rice," is an original species developed by a local Thai farmer and improved to be a premium white rice with pandan-like aroma, globally known for its quality, long grain, curled-up tips, and clear, glossy exterior. When cooked, the rice maintains its white color and long grain, although the texture becomes tender, fragranced with a fresh, appetizing aroma that goes well with almost all savory dishes. Hom Mali rice is filled with nutritional substances: vitamin B1, B2, niacin, carbohydrates, protein, and minerals such as iron, calcium, and phosphorous. [Source: Thailand Foreign Office, The Government Public Relations Department++]
Each year, Thailand produces approximately three million tons of Hom Mali rice, or 10 percent of its total rice production, 75 percent of which is for local consumption while 25 percent is for export. Hom Mali rice is a major economic commodity that earns Thailand over 20 billion baht in export value, or 25-30 percent of the total rice export value. Its major importers are Asia and the United States (60 percent and 20 percent respectively). The rest is shipped to Europe, Africa, and Oceania. ++
According to the Thai government: “Although there is a number of species of khao hawm mali (hom mali) rice, the one officially selected and promoted as Thai fragrant rice is "Khao Dok Mali Rice 105," which represents most of the Hom Mali rice grown in Thailand. Hom Mali rice not only gives off a unique fragrance while it is being cooked, but after it is cooked, the grains become tender, held together loosely by natural moisture, and with a heavenly flavor. Many consumers do not want any other rice once they get to taste this wonderful specimen. These attributes are for the "new crop" of Hom Mali rice, when it is marketed soon after its harvest and properly stored before consumption, so it tastes delicious and needs less water to cook. ++
The "old crop" is stored five to six months after harvesting. The fragrance fades slightly, and its unique tenderness and moistness after cooking are gone, although the taste is about remains the same. It needs more water to cook but it doesnut become tough, the way other species do. Because Hom Mali rice is "light-weight rice," it is ready for harvest sooner than other species, around the end of November. Consumers can get the "new crop" around that time and later go back to the old crop. Hong Kong and Singapore are the most avid consumers of Hom Mali rice, so the new cropus price soars at the end of every November. ++
Invention and Production of Jasmine Rice
According to the Thai government: The Department of Agricultureus records show that this species of rice was first found in Bang Khla district, Chachoengsao province. In 1950-1951, a farmer in Bang Khla stored 199 specimens of this species. He later moved to Khok Samrong district, Lop Buri province, and in 1955 he had the species purified at the Rice Experimentation Post there. In 1959, the comparisons performed among species of rice from the northern, the northeastern and the central regions revealed that this particular types possessed higher quality with higher yield and better fragrance. [Source: Thailand Foreign Office, The Government Public Relations Department ++]
The Ministry of Agriculture thus promoted its distribution on 25 May 1959 and gave it the official name "Khao Dok Mali Rice 105," later called "jasmine fragrant rice" or "jasmine rice," as it is known overseas. It was widely grown in all regions during the first 10 years of its promotion. In the South it tapered off gradually, until none exists there any more, because of its dislike of excess water, but it thrives in the northeastern region, where it is more arid. ++
Presently, jasmine rice it is grown in eight northeastern provinces: Surin, Buri Ram, Si Sa Ket, Yasothon, Maha Sarakham, Nakhon Ratchasima, and some parts of Ubon Ratchathani and Thung Kula Rong Hai, which borders six provinces - Roi Et, Surin, Buri Ram, Yasothon, Maha Sarakham, and Si Sa Ket - and covers approximately 2.1 million rai (over 800,000 acres). Currently, the best Hom Mali rice in Thailand is grown in the Northeast. ++
In addition, it is grown in the Central Plains' Bang Khla district and Ratchasan subdistrict in Chachoengsao province; Phan Thong district in Chon Buri province; Khok Samrong district in Lop Buri province; and in Phetchabun province; while up in the North, it can be found in Chiang Rai and Phayao provinces, but not much in the rest of the country. ++
Preserving the Premium Quality of Thai Hom Mali Rice
According to the Thai government: The quality of Hom Mali rice, and its appeal to consumers, rests on its fragrance and quality after being processed or milled into raw white rice. Its fragrance comes from the aromatic oil in it, which evaporates if it is poorly stored. There are several methods for preserving the quality: Hom Mali rice should be harvested sooner than other species. The beginning of its harvesting season is set for November 20, when most species' grains are ripe enough for growing seeds but not for harvesting or onsumption. In the case of Hom Mali rice, if it is harvested at the same time as others, the grains will be too ripe and lose their unique fragrance, tenderness, and taste. In addition, harvesting while its panicles still extend upward is also easier and faster; most of the grains are kept intact, resulting in a higher yield and better price. [Source: Thailand Foreign Office, The Government Public Relations Department ++]
Before the hulling process, the panicles should be sun dried along the edge of the paddy field or right in the field itself, for no longer than three days, so the grains do not become brittle because of alternating exposure to the sun during the day and dew at night. Completely sun-dried rice will help preserve the quality and attributes of the grains if the farmers cannot sell their lot in time and need to store it in a silo. Farmers used to hull rice with the help of machines because it was faster and more convenient but at the cost of many broken grains, so they have gone back to basics and do it manually to preserve the quality of the perfectly dried rice. ++
"Thailand Standard for Thai Hom Mali Rice or Thai Jasmine Rice," announced in the Royal Gazette, General Announcement Issue, volume 117, special edition 93 Ngor, dated 13 September BE 2543 (AD 2000), stipulates that the following definitions be used in the standard: 1) "Thai Hom Mali rice" or "Thai jasmine rice" means hulled, unbleached rice and raw white rice obtained from the harvested Hom Mali rice species grown in Thailand and certified by the Department of Agriculture and Cooperation, i.e., Khao Dok Mali Rice 105 species, Kor Khor 15 species, Khlong Luang 1 species, all of which possess natural fragrance, depending whether it is new or old crop. When cooked, the grains' texture becomes tender. 2) "Amylose" means a type of flour in rice grains. When cooked, the rice's tenderness depends on the quantity of amylose. 3) Other terms besides 1.1 and 1.2 shall be as defined in the Announcement of the Standard of Rice Goods, Ministry of Commerce, in regards to the Standard of Rice Goods BE 2540 (1997). ++
The Characteristics and Size of the Rice Grain: Thai Hom Mali rice grains shall possess the characteristics and size as follows: 1) General characteristic: long grain; 2) Average length without breakage: not less than 7.0 mm; 3) Average width of the full grain rice without breakage: not less than 3.0 mm. Chemical Attributes: Thai Hom Mali rice shall contain not less than 12 percent and not more than 19 percent of amylose at the 14 percent humidity level. ++
Categories of Thai Jasmine Rice: Thai Hom Mali rice shall be classified into three categories, depending on the percentage of the other rice species mixed with it: 1) Prime quality: other rice does not exceed 10 percent by weight; 2) Superb quality: other rice does not exceed 20 percent by weight; 3) Premium quality: other rice does not exceed 30 percent by weight. ++
General Stipulations: 1) White rice and unbleached rice mixed with other rice over 30 percent by weight is not classified as Thai Hom Mali rice by this Standard; 2) Humidity: The humidity of all types and classes of Thai Hom Mali rice shall not exceed 14 percent; 3) Rice sample: Any rice sample not classified in accordance with this Standard, supplied for trading purposes, shall be as the supplied sample and the agreement between the purchaser and vendor agreed upon; 4) Conflicts and issues: In case of contests or disagreements regarding the Thai Hom Mali rice quality, both parties shall forward the samples that passed the approval of the opposite party to the Department of Agriculture for examination and final ruling. ++
Patents, Intellectual Property Rights and the Fragrant Rice Seal of Approval
According to the Thai government: Although Thai Hom Mali rice is a major successful export in the global market, being referred to by many different names, such as fragrant rice, Hom Mali rice, aromatic rice, or scented rice, blurs its image, and without any stipulated standard, many consumers have complained about the quality of the rice they were buying. The Department of Foreign Trade, with the approval of the Ministry of Commerce, thus developed a Seal of Approval for Thai Hom Mali rice to certify that the exported Thai Hom Mali rice under this Seal possesses the standard pursuant to the stipulation of the Ministry of Commerce. [Source: Thailand Foreign Office, The Government Public Relations Department ++]
The Hom Mali Rice Seal of Approval is round, surrounded by a Thai statement, "," and an English statement, "Thai Hom Mali Rice - Originated in Thailand - Department of Foreign Trade," with rice grains and rice plants on it. To prevent exploitation of the seal, the Department of Foreign Trade registered the seal with the Intellectual Property Rights Department, Ministry of Commerce, and in counties of Thai Hom Mali rice importers all over the world. ++
When some foreign scientists modified a species of the rice and prepared to register a patent for it, Thailand's Ministry of Commerce lodged a complaint in January 2000 with the US Federal Trade Commission in regard to the consumersu confusion and the unfairness toward Thai rice exporters, pursuant to the Federal Trade Commission Act, and it won the case. That was not the first time someone had tried to claim a plant gene from the tropical zone and ride on its reputation. There were prior, similar examples, such as the trademark of "Jasmati Rice," "Basmati Rice Patent," "Turmeric," and "Neem." Registering a patent for basmati rice and a trademark for "Jasmati Rice" indicated that Hom Mali rice was the next big target eyed by foreign companies wanting to own the gene and claim the market, because the Hom Mali rice market is even bigger than the basmati rice market. ++
Later, the Minister of Commerce, in Los Angeles, reported that the Foreign Trade Department registered the patent of "Thai Jasmine Rice" with the Intellectual Property Department but the term "jasmine rice" could not be claimed because it is a wild rice of uncertain geographical origin. The new stipulation issued by the Ministry of Commerce regarding the English seal of approval thus sported the terms "Thai Hom Mali Rice - Originated in Thailand - Department of Foreign Trade" because of the above reason, even though "jasmine rice from Thailand" is what consumers globally refer to and "jasmine rice" has been the familiar term on peopleus lips and minds for decades.
Thailand’s Rice Pledging Scheme
In 2011, the government of Prime Minister Yingluck Shinawatra introduced the controversial Government Rice Pledging Policy in which rice farmers are promised a higher than market-price for their rice crop to increase their income. Under the scheme, Thai farmers are given up to $500 for every ton of rice they produce. The rice is deposited in warehouses run by government procurement agencies, who are in charge of selling the rice or storing it.
According to Associated Press, “Thai governments have intervened in the rice market through a variety of means since the early 1960s to help farmers, but the current scheme has its roots in the populist policies of Yingluck's brother, former prime minister Thaksin Shinawatra, who won landslide victories in two elections before he was ousted in a 2006 coup. The scheme has been dogged by corruption and accusations the government has hidden its true cost. Previously, officials refused to reveal how much rice the government had stockpiled.
In October 2012, Xinhua reported: “Despite strong criticisms, Thailand's innovative rice pledging scheme is likely to continue at least for the time being as the Thai people, especially the farmers, continue to support the program. [Source: Surasak Tumcharoen, Xinhua, October 8, 2012^]
“Former agriculture minister Prapat Pothasuthon confirmed that the farmers would prefer to deposit their rice with the Public Warehouse Organization or the Marketing Organization for Farmers and receive as much as 15,000 baht (500 U.S. dollars) a ton rather than sell to the private traders who offer to buy at a lower price. Former Commerce Minister Wattana Muangsook explained that the government's rice program is not a monopolistic business because, he said, the private rice traders or millers could always compete by offering to buy at a higher price. "The rice pledging program is practically a market intervention measure whereby the farmers are assisted in dealing with the traders who usually buy their rice at a relatively low price," Wattana said. ^
Criticism of Yingluck Shinawatra’s Rice Buyback Scheme
The rice subsidies have been widely criticized for high costs and knocking the country from its spot as world's top rice exporter. Rice, Thailand's staple grain, is one of the country's main exports. India and Vietnam surpassed Thailand as the world's top rice exporters in 2012 as the Thai government stockpiled rice to avoid even bigger losses.
Generous subsidies for farmers have left Thailand with vast stockpiles of rice and a bill that it has a hard time paying off. Opposition leaders say the scheme is mired in corruption, costing the taxpayers and estimated at 200 billion baht ($6 billion) a year and fueling anger towards Yingluck.
William Pesek of Bloomberg wrote: “ Moody’s Investors Service says the subsidies damage Thailand’s credit rating. Granted, the program isn’t bankrupting Thailand. The country’s $346 billion economy can handle the $4.4 billion the government blew on rice purchases last year. [Source: William Pesek, Bloomberg, July 11, 2013]
In October 2012, Xinhua reported: “ The government's rice program, introduced in last year's electoral campaign of the ruling Puea Thai Party, has been openly criticized by some academics and members of the opposition Democrat Party. Members of the opposition have filed a complaint with the country's Constitutional Court seeking a definite ruling on whether or not the program has violated the Thai constitution. Whatever ruling the court would issue, it would certainly make an impact on the regular rice harvests later this year and early next year. [Source: Surasak Tumcharoen, Xinhua, October 8, 2012^]
“Though Minister Yingluck Shinawatra has not talked much about the rice program, she had earlier suggested that critics should go directly to the farmers and ask them if they have benefited or not from the program. The petitioners, including lecturers and students of the National Institute of Development Administration led by Adit Isarangkul na Ayudhya, dean of the Economic Development Faculty, charged that the pledging program is undermining the free market and turning the government into a monopolistic trader.The government has not only failed to uphold the free-trade principles but competed against the Thai private sector in the global rice markets, they said. ^
“Thai rice has become not very competitive against the rival rice from Vietnam and India since its costs have largely increased due to the government's rice pledging program, according to the academics. Democrat MP Ong-ard Klampaibul alleged that the $25 billion rice program was also prone to corruption and quoted a member of a House committee as saying that an estimated one million ton of rice bound for export has remained unaccounted for so far. Other academics, however, have aired solid support for the Yingluck government's rice program because, according to them, it was primarily designed help the country's more than 8 million rice farmers. Thammasat University's law lecturer Punthep Sirinupong said the government could pursue the "populist scheme" since it has been proven that it benefits the country's rice farmers. Thousands of rice farmers in central, northern and northeastern regions of the country have recently gathered peacefully in front of their provincial halls in support of the government's rice program. ^
Yingluck Shinawatra Extends the Rice Buyback Scheme
In September 2013, Thailand’s Cabinet agreed to extend rice subsidies. It approved a total budget of 270 billion baht ($8.4 billion) to buy 16.5 million tons of rice at above-market prices from farmers for another year. Associated Press reported: “Under the renewed program, farmers will be paid 15,000 baht ($467) per ton, or about 50 percent above what they would get on the world market. The government will cap the total value for each qualifying household at 350,000 baht ($10,890). [Source: Thanyarat Doksone, Associated Press, September 3, 2013]
The rice-buying scheme, a flagship policy of Prime Minister Yingluck Shinawatra's government, has accumulated losses of at least $4.46 billion since it was introduced in 2011. Attempts to lower the payments faced resistance from farmers, whose votes helped Yingluck's party win a commanding victory in 2011 elections. Despite the purchasing limit, which was introduced for the first time, the government will pay 30 billion baht ($933 million) more than it did in the last harvest year. Deputy Agricultural Minister Warathep Rattanakorn said the government expects losses will be as much as 100 billion baht ($3.1 billion) for the harvest year that began September.
Warathep said the government has installed CCTV cameras at buying points and weighing stations, and put extra police officers at checkpoints to make sure that rice payments are made to farmers.
William Pesek of Bloomberg wrote: “Yingluck had planned to limit a practice that jeopardizes the country’s fiscal position and warps commodity markets. Yet she caved to farmers, even firing her commerce minister to do so.[Source: William Pesek, Bloomberg, July 11, 2013]
Thailand Loses Spot as World’s No. 1 Rice Exporter
In January 2013, Tan Hui Yee wrote in The Straits Times: “Thailand has lost its crown as the world's top rice exporter for the first time in 30 years. Hampered by an expensive government-run price support scheme, it shipped under seven million tonnes of the grain last year, trailing behind India and Vietnam. In contrast, India exported 10 million tonnes and Vietnam 7.5 million tonnes, according to figures from the United States Department of Agriculture.
The dethroning is a blow to the country that prides itself as the food basket of Asia, but it is something local exporters had warned of for months as the government-run rice pledging scheme pummelled export figures. Under the 15-month-old programme, the government guarantees farmers up to 15,000 baht per tonne for white rice, more than 50 per cent higher than world prices. [Source: Tan Hui Yee, The Straits Times, January 5, 2013]
While it has raised the incomes of farmers, it has also turned the government into the main buyer of rice, and resulted in a giant stockpile that cannot find takers on the world market. According to a World Bank report released in December 2012, the Thai government is sitting on a stock of more than 20 million tonnes of rice, twice the amount the country exported in 2011. The mountain of rice created storage headaches last year and the government even briefly considered storing it in a cargo building at Don Muang Airport.
Although government price guarantees for rice are not new, the Puea Thai government differed by not putting a cap on the amount of rice it would buy. Exporters have been deeply sceptical of claims by the government of deals to sell rice to other governments. Rice exporter Vichai Sriprasert told The Straits Times: "Sooner or later, this plan has got to be scrapped. It's physically impossible to sustain."
The programme benefited just 1.3 million out of 3.6 million of the rice farming households in the harvest year that ended last September. According to the World Bank report, the scheme cost the government 376 billion baht, or around 3.4 per cent of the country's gross domestic product, in the same period. In the coming harvest season, assuming none of the rice is sold, the cost of the programme is expected to hit 440 billion baht.
Beyond financial cost, the losses from the programme may be felt in the longer term, noted the World Bank report. The high padi prices have made farmers increase the number of crops each year by producing lower quality rice. Thailand's rice yield is already one of the lowest among rice growers in the world, and "continued subsidies to rice production may be slowing a needed transformation of Thai agriculture", it said.
Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Tourist Authority of Thailand, Thailand Foreign Office, The Government Public Relations Department, CIA World Factbook, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.
Last updated May 2014