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Thread: Rice pledging scheme is broke!

  1. #1
    Frequent Flyer kaptainrob's Avatar
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    Rice pledging scheme is broke!

    Mae did not plant as much rice this year, lucky in that it was a poor harvest due to drought, but also fortunate due to delayed payments from the Mills. Could be a long wait according to this article:-

    "~ the bad news – the BAAC is practically broke. The bank has had to delay payments to farmers who have collectively pledged (sold should be the proper word) about 1.2 million tonnes of paddy to the bank, because it has simply run out of cash.

    According to the bank’s president, Luck Wajananawat, the bank has sought permission from the National Rice Policy Committee to raise a 140 billion baht loan to partially cover the cost of the rice pledging scheme for the 2013-14 harvests. But the committee will need approval from the Finance Ministry, which was earlier reluctant to give permission because the bank has already used up the 500 billion baht fund capped by the ministry for the scheme.

    Mr Luck said that the bank has so far spent 680 billion baht to support the scheme since 2011 and has received only 140 billion baht from the Commerce Ministry from rice sales."

    Full story here > CLICK <
    Cheers, Rob.
    Lifes journey is not to arrive at the grave safely in a well-preserved body, but to skid in sideways totally worn out, shouting: holy s.h.i.t what a ride!

  2. #2
    Thai Dreamer ผู้เพ้อฝัน Hatari's Avatar
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    too much rice and not enough buyers; the current govt has painted itself into a corner with its vote-buying subsidies, while the rest of the world adjusts to market prices. How long can they sustain an annual loss of 200 billion baht? And will it change, if UN figures say production is exceeding demand?
    Yet the cost to buy locally has increased.

    Nov 5 (Reuters) - Thailand will start loading in December about half the 1 million tonnes of rice it has agreed to sell to China annually, the Thai Commerce Minister said on Tuesday.
    Thai 5 percent broken grade white rice was offered at $435 per tonne on Tuesday, well above the same grade from Vietnam which was at $400 per tonne, traders said.
    The most recent figure from the Commerce Ministry puts stocks at 16 million tonnes, more than double the 6.9 million tonnes exported by Thailand in 2012.

    November 7, 2013 2:42 pm
    Rice mountain set to grow even higher
    The world’s rice mountain is set to rise to a record for the 10th consecutive year as government support schemes for rice farmers have led to ballooning state reserves in Thailand and China, according to the UN Food and Agricultural Organization.
    . . . global production would be at a record 494m tonnes. Output was “expected to exceed utilisation in 2013-14, resulting in a further accumulation of stocks”, it said.

    CP boss says slash rice crop by 30%
    27 October 2013
    The head of the country's largest food group has condemned the government's rice policy, saying crops should be reduced by a third.
    Dhanin Chearavanont, chairman and chief executive of agro-industrial conglomerate Charoen Pokphand Group, said the government had failed to keep up with the changing global rice market, leading to excessive rice stocks and massive financial losses.
    Deputy permanent secretary Supa Piyajitti recently suggested the government had lost 200 billion baht a year through the scheme over the past two harvest years. The Commerce Ministry rejected the Finance Ministry's accounting procedures and said the losses could be less than 100 billion baht per harvest year.

  3. #3
    The artist formally known as Wabbits Thai Dreamer ผู้เพ้อฝัน wabbits's Avatar
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    The smart farmer who can diversify or is growing other crops as well will be in a better position..
    But I wonder how many on a % base that is?
    .

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    Thai Dreamer ผู้เพ้อฝัน Hatari's Avatar
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    ^ from 3rd article I quoted:
    Based on the Agriculture Ministry's records, rice farming covers 70 million rai. Of this, only 43 million rai is suitable for growing rice, but some farmers still attempt to grow on unsuitable land. He said rice farmers should switch to cash crops like rubber, palm, sugarcane and coconut.
    My partner has inherited land, run by a manager (b-in-l) and in order of precedence (not suited to rubber or palm) they grow sugar, cassava, eucalyptus and the rest (worst land) is leased out for rice farming for a flat fee per 10 rai plus percentage of return/crop - lessee takes all the risk.

    have seen articles suggesting Thailand try to pay for its proposed high speed rail network with rice as a way of clearing the stockpiles- sure if they did that it would be well below market rates (would that be 'rice laundering'?)

    reminded of in the 1980s NZ set up a trading scheme with what ws then a cash-strapped USSR/Russia, and began trading milk for Ladas!

    Wiki has a reference - didn't know vodka was part of the deal.

    Ladas were briefly popular in the 1980s. Meat, dairy and fertiliser exports to Russia were wholly or partly paid for with Belarus tractors, Stolichnaya vodka and Lada cars. The New Zealand Dairy Board were distributors for Lada vehicles.
    Last edited by Hatari; 9th November 2013 at 21:29. Reason: typo corrected

  5. #5
    Frequent Flyer kaptainrob's Avatar
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    Quote Originally Posted by Hatari View Post
    ^ from 3rd article I quoted:


    My partner has inherited land, run by a manager (b-in-l) and in order of precedence (not suited to rubber or palm) they grow sugar, cassava, eucalyptus and the rest (worst land) is leased out for rice farming for a flat fee per 10 rai plus percentage of return/crop - lessee takes all the risk.

    have seen articles suggesting Thailand try to pay for its proposed high speed rail network with rice as a way of clearing the stockpiles- sure if they did that it would be well below market rates (would that be 'rice laundering'?)

    reminded of in the 1980s NZ set up a trading scheme with what ws then a cash-strapped USSR/Russia, and began trading milf for Ladas!

    Wiki has a reference - didn't know vodka was part of the deal.
    Contra deals with rice an excellent idea so long as not for Lada's. I don't think they've improved that much in 30 years. 555

    I suggested our family should sell any rice land last year as I could see the problem coming from 18 months back. The 12 rai which Mae plants for extra income was offered to us @ 600k, 2 years ago as the BKK family Members had no use for it. We declined. Then last year they decided to sell @ 1mil [higher price due to rice pledging + BKK ppl buy into Isaan after 2011 floods] and had a cash buyer lined up. Jo's sis decided it must be too cheap and bumped the price to 1.2mil ... it didn't sell. Be lucky to get 800k now and it's all downhill from here.
    Cheers, Rob.
    Lifes journey is not to arrive at the grave safely in a well-preserved body, but to skid in sideways totally worn out, shouting: holy s.h.i.t what a ride!

  6. #6
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Moo Uaon's Avatar
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    not much joy for the rubber tree growers either with prices plunging from as high as 80-90 baht/kg in recent years to as low as 35 ATM...rubber trees everywhere out near our shack.....volatile times.
    FACE YOUR FEARS LIVE YOUR DREAMS

  7. #7
    Frequent Flyer kaptainrob's Avatar
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    Quote Originally Posted by Moo Uaon View Post
    not much joy for the rubber tree growers either with prices plunging from as high as 80-90 baht/kg in recent years to as low as 35 ATM...rubber trees everywhere out near our shack.....volatile times.
    Urr urr ... BIL borrowed heavily to extend holdings in Chumpon when Gov't subsidies, low % loans and free seedlings, were offered. Now he's scratching an income. Sugar cane perhaps safer investment and mill construction is regulated.
    Cheers, Rob.
    Lifes journey is not to arrive at the grave safely in a well-preserved body, but to skid in sideways totally worn out, shouting: holy s.h.i.t what a ride!

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Zablive's Avatar
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    If you can't sell directly to the processors the middlemen will take most of the profit.

    If you want to make money in the rural areas - buy a truck.

  9. #9
    Thai Dreamer ผู้เพ้อฝัน Hatari's Avatar
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    Sugar . . . wasn't aware how much grown here - 'world's biggest exporter'

    Land being re-zoned for sugarcane
    Published: 11 Nov 2013 at 13.06

    Farm land being inappropriately used to produce rice is being re-zoned for growing sugarcane instead, Agriculture and Cooperatives Minister Yukol Limlaemthong said on Monday.
    Mr Yukol said land in 33 provinces is unsuitable for growing rice, and areas in 31 of these provinces have already been re-zoned for sugarcane.
    He expected there would be an additional 400,000 rai of land zoned for sugarcane by Nov 15, in time for the sugarcane-growing season.
    The rice farmers will have to be taught how to grow sugarcane, but it will give them a higher income from the same area of land.
    He said sugar mills are now capable of producing 13 million tonnes of sugar a year but are producing only 10 million tonnes.
    About 10 million rai of land is currently being used for growing sugarcane. The country needs another three million rai of land under sugarcane to feed the sugar mills to capacity, Mr Yukol said.
    Thailand was last year the world's biggest exporter of sugar after Brazil, but is facing competition from India.

  10. #10
    Frequent Flyer kaptainrob's Avatar
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    ^ Yes, a more viable crop ... but try telling rice farmers that. 555 Unlike rice mills, sugar mill/refinery construction is regulated and that would have to change.
    Cheers, Rob.
    Lifes journey is not to arrive at the grave safely in a well-preserved body, but to skid in sideways totally worn out, shouting: holy s.h.i.t what a ride!

  11. #11
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Zablive's Avatar
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    Seems they want to fill up the capacity of the existing mills.
    Again - what is the cost of transport to the nearest mill -you can't take much cane on a saleng.

  12. #12
    Thai Dreamer ผู้เพ้อฝัน Hatari's Avatar
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    how quickly nature can impact upon global markets

    Typhoon ruins Philippine rice, sugar
    Published: 11 Nov 2013 at 17.25
    Rice imports may increase, pushing purchases above an estimate of 1.1 million metric tonnes by the US Department of Agriculture,'' said Samarendu Mohanty, senior economist at the International Rice Research Institute. Between 50,000 tons and 120,000 tonnes of sugar may have been lost, the Sugar Regulatory Administration estimated.
    An expansion in rice shipments to the Southeast Asian country would offer opportunities to India, Vietnam and Thailand, the world's three biggest exporters. Stockpiles of the grain in Thailand stand at a record after a state-buying programme spurred local harvests.
    Philippine rice imports have declined as the nation progressed toward self-sufficiency. Purchases from overseas peaked at 2.6 million tonnes in 2008-2009

  13. #13
    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Moo Uaon's Avatar
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    Quote Originally Posted by Zablive View Post
    Again - what is the cost of transport to the nearest mill -you can't take much cane on a saleng.
    huge fleet operate from the mill near Nong Han....quite inexpensive i`d guess...as the same vee hickles may have been doing the job for decades.

    FACE YOUR FEARS LIVE YOUR DREAMS

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Zablive's Avatar
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    So what is your guess Moo for a farm gate price for those "vee hickles" per tonne per km - I'm sure the average rice farmer doesn't own one?
    Or don't maybe those "vee hickles" don't pick up from "the hicks" - and just cart from contract plantations?

    Or the discount per tonne of cane at the farm gate?

    Agro-Economics 101.
    Last edited by Zablive; 11th November 2013 at 21:14.

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    Uber Star Soi wanderer Thai Dreamer ผู้เพ้อฝัน Moo Uaon's Avatar
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    they must have done hundreds or thousands of loads of the stuff with those ol girls

    the whole region around that mill is chockas with the stuff.
    FACE YOUR FEARS LIVE YOUR DREAMS

  16. #16
    Frequent Flyer kaptainrob's Avatar
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    Quote Originally Posted by Moo Uaon View Post
    they must have done hundreds or thousands of loads of the stuff with those ol girls

    the whole region around that mill is chockas with the stuff.
    Always reminds me of NSW Northern Rivers ... except they use a dedicated rail line now. I foresee more rice land converting to sugar near existing mills. Other regions would require legislative change to allow Mill/Refinery construction as cane can't be viably trucked much more than say a 50km (to 75km max) radius by contractors.
    Cheers, Rob.
    Lifes journey is not to arrive at the grave safely in a well-preserved body, but to skid in sideways totally worn out, shouting: holy s.h.i.t what a ride!

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