Ministers give unclear explanation on rice pledging losses

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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.