BANGKOK, Dec 19 – Thailand’s financial loss from its two-year rice pledging scheme should reach Bt247 billion (US$8.2 billion), or 1-1.3 per cent of gross domestic product (GDP), a World Bank economist said today.
Kirida Bhaopichitr, the bank’s senior economist for East Asia and the Pacific, said the Thai government’s rice pledging expenditure for the 2012-2013 harvest season will be Bt432 billion ($14.4 billion), or 3.8 per cent of GDP – an increase from last year’s Bt376 billion ($12.5 billion), or 3.4 per cent of GDP.
The final loss will not be known until the government sells the rice in its stockpile, she said.
The government has posted a loss of Bt115 billion ($3.83 billion) last year, while the loss in the new harvest is projected at Bt132 billion ($4.4 billion), she said.
Dr Kirida said the government’s rice pledging price is 50 per cent, or $200/tonne, higher than current global prices, adding that the price of 5 per cent white rice will probably drop from $550/tonne this year to $520/tonne next year.
She urged the government to spend the national budget on improving the productivity and quality of rice which will consequently increase the total yield.
According to the 2000-2010 data, Thailand’s rice yield was 2,877 tonnes/hectare – the lowest compared to Vietnam (4,834 tonnes/hectare), India (3,103 tonnes/hectare) and Myanmar (3,757 tonnes/hectare).
The World Bank economist said Thailand’s minimum wage adjustment to Bt300/day, to be effective nationwide January 1, will increase the overall minimum wage by 22.4 per cent from this year, which is extremely high compared to an increase at only 2.5 per cent in the past. She called on the government to improve the quality of Thai skilled labour.
She said the government’s economic stimulus projects at 5.4 per cent this year and 2.4 per cent next year will motivate domestic consumption.
However, financial spending for most of the projects are made through state financial institutes which will have to bear the burden of accumulated debts, she pointed out.
She added that Thailand’s public debt situation is far from worrisome at a predicted 50 per cent next year, a 5 per cent increase from this year, due to loans for various big projects.