Thai PM defends rice-buying scheme

February 06, 2014 - 7:41:33 am

Thailand’s embattled government yesterday defended a much-criticised rice subsidy scheme after a Chinese firm cancelled a one-million-tonne order following a graft probe involving Thai officials.

BANGKOK:  Thailand’s fiery protest leader, Suthep Thaugsuban, denounced the government’s battered rice-buying scheme as corrupt and the prime minister leapt to its defence yesterday, days after an election did nothing to restore stability in the divided country.

The rice programme was among the populist policies pioneered by Yingluck’s brother, Thaksin Shinawatra, a former prime minister central to the conflict that has divided Thais for eight years. He was toppled by the military in 2006.

Generous subsidies for farmers were a centrepiece of the platform that swept Yingluck to power in a landslide election win in 2011, but have left Thailand with vast stockpiles of rice and a bill it is struggling to fund.

Losses to the taxpayer, estimated at $6bn  a year, have fuelled protests against Yingluck and payment problems risk alienating farmers at the heart of her support base in the poorer north and northeast.

“Yingluck took farmers’ rice more than seven months ago and hasn’t paid them,” Suthep told supporters yesterday, even as another warrant was issued for his arrest.

Yingluck and her government are being investigated by an anti-graft panel for alleged irregularities in the rice scheme. 

The rice programme is close to collapse after the commerce minister said China had cancelled an order for 1.2 million tonnes due to the corruption investigation.

State-run Krung Thai Bank has joined other lenders in saying it will not provide loans urgently needed to rescue a scheme that has at times been buying rice at prices up to two-thirds above the prevailing benchmark rates.

“Farmers who took their rice to milling houses received just over 10,000 baht when the price they were guaranteed was 15,000 baht,” Suthep said at a rally at one of the protest sites in Bangkok’s central business district.

Yingluck said the government was only trying to help farmers.

“These problems stem from the dissolution of parliament (last year) which made it difficult under the framework of the law to approve payments,” she told reporters. 

“Whether this scheme is extended or not is up to the next government ... Everyone knows that the government does not have the power to do anything that will affect the incoming government so this issue may take time to resolve.”         Reuters

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