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| BUSINESS |
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Ministers give unclear explanation
on rice pledging losses
Commerce Minister Boonsong Teriyapirom last Friday categorically denied a
report that government’s losses amounted to Bt26 billion from the rice
pledging scheme.
He said government’s allocated expenses to buy rice from farmers was Bt118
billion and Bt228 billion in the 2011-2012 and 2012-2013 harvest seasons
respectively while another lot of Bt50 billion subsidy will be earmarked
soon.
Boonsong said the rice subsidy scheme, launched in late 2011, has
contributed to the country’s gross domestic product (GDP) growth at 0.5-1
percent while 14-15 million rice-cultivating households could sell their
paddy at higher prices.
Deputy Commerce Minister Nattawut Saikua said the committee tasked with
handling accounting for the scheme did not report on the Bt260 billion
losses but only mentioned 17 categories of agricultural produce under the
subsidy program.
Remaining rice in the state’s stockpiles is worth Bt226 billion and the
total losses were recorded at Bt216 billion, not Bt260 billion.
The losses were not higher than those incurred in the previous government at
Bt70-80 billion, he said.
A report from the committee said the government spent Bt661.224 billion to
buy rice in the 2011-2012 and 2012-2013 harvest years while the total
expenses were limited at Bt500 billion.
As of the closing entries on January 31 this year, the rice pledging scheme
suffered a combined loss of Bt220.967 billion, and the loss from subsidizing
the second harvest in 2009 was Bt41.677 billion.
Moody’s Investors Service earlier warned that the government’s higher than
expected loss in the rice scheme may jeopardize the country’s credit rating.
(MCOT)
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Thai private sector should invest in rice business in Myanmar: Kasikorn Research Center
Thailand’s Kasikorn Research Center (KRC)
said the Thai private sector should invest in rice businesses in Myanmar
after the country has sped up intensive rice production both in terms of
quantity and quality.
Myanmar has conducted research and development on rice breeds, agricultural
technology and irrigation systems, prompting the country to have continued
growth of rice production from 2.35 tonnes/hectare in 2011 to an expected
2.67 tonne/hectare this year, according to the US Agriculture Department.
Such figures therefore could result in a boost in rice exports, encouraging
Myanmar to possibly become the world’s leading rice exporter.
Thus far, Japan, China, and Singapore are already investing in the rice
business in Myanmar, while the United States is conducting a survey for
investment on rice breeding research there.
According to the KRC, Myanmar could easily produce two million tonnes of
rice for export as targeted this year by Myanmar authorities and three
million tonnes in 2015, in the absence of serious natural disasters.
The leading economic think-tank also viewed that Myanmar could become one of
the world’s top-five rice exporters, with export quantity of at least five
million tonnes, in the next ten years.
Potential Thai rice entrepreneurs wishing to invest in such businesses in
Myanmar are advised to invest in rice production lines by applying a reverse
integration strategy, such as cooperating with local entrepreneurs to
develop and open a modern rice mill and then using Myanmar as a base for
exporting rice.
Kasikorn Research Center indicated that over 80 percent of rice mills in
Myanmar are still small and utilizing low technology, causing lower rice
quality and broken rice grains.
Opportunities for other rice-related businesses include becoming a rice
trader in Myanmar for export or selling fertilizer and agricultural
machinery and motors.
Consideration on the investment expansion in Myanmar as the Thai rice
business is losing its ability to compete on a price basis is another option
for Thai entrepreneurs who are ready.
However, obstacles to be faced include, for example, legal processes to set
up a rice mill, lack of infrastructure, and power shortages. (MCOT)
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