News / Economy

Thailand’s Controversial Rice Policy Helps Neighbors’ Exports

A Thai vendor weighs a bag of rice at a market in central Bangkok, July 26, 2013.
A Thai vendor weighs a bag of rice at a market in central Bangkok, July 26, 2013.
Ron Corben
The Thailand government is pressing ahead with a rice price support scheme despite criticism over financial losses, concerns over rice quality and falling rice export sales.  The scheme is possibly helping rival exporters, especially Vietnam and Burma.
The rice program was a keystone of Prime Minister Yingluck Shinawatra’s electoral success in 2011 and was hugely popular among rice growers from rural areas that form the backbone of political support for her party.  
Under the program the government buys paddy - or unmilled - rice at $480 a metric ton.  Private sector traders said this translates into export prices for milled rice of up to $750 a ton - well above the market of $400 for similar grades.  
That means to sell rice for export, the government needs to take a loss.
Thai Rice Exporters Association honorary president, Vichai Sriprasert, estimated the losses from the program may reach some $19 billion, while at the same time curbing the volume of exported rice.
“The announced aim of helping to raise the incomes of the poor - that was the announced objective. They tried this for two years - we export less and we get less income. High prices doesn’t mean bigger income it means smaller income. The farmers that benefit a lot from this scheme are the farmers in the central plains who have bigger acreage and bigger incomes already,” said Sriprasert.
Despite concerns over the program’s cost and its benefit to mainly larger rice growers, Prime Minister Yingluck recently said the program is helping to alleviate poverty among poorer farmers and it will continue.
Credit rating agency Moody’s warned the government the mounting financial losses from the scheme and other policies, are putting Thailand’s credit standing at risk. Critics also claim the scheme is open to rampant corruption.
Thailand was the world’s leading rice exporter, but since has fallen behind India and Vietnam. Meanwhile Thai rice stocks, which are now too expensive to be sold, have soared to almost 18 million tons. Rogue traders from neighboring countries have smuggled an estimated one million tons of rice into Thailand to take advantage of the government buying program.
Darren Cooper, an economist with the London-based International Grains Council, said Thailand’s policy has led to distortions in the international rice market.
“Looking at thing in the totality the pledging scheme per se has caused a pretty strange market in the past couple of years. Certainly with rice out of Thailand trading at more than $150 [a ton] above comparable grade in Vietnam, of course it’s going to be attractive for people to try and smuggle rice from different origins into it. So certainly it’s having a distorting effect,” Cooper said.
Cooper said international traders are now concerned over when Thai authorities plan to release their massive rice stocks onto the market. This, he said, will have a “significant downward pressure” on prices.
But Sam Mohanty, an economist at the International Rice Research Institute (IRRI), said the program appears to have the unintended effect of helping other exporters boost production.  “I’m arguing that if the Thai program continues for the next few years in fact it’s going to help Myanmar [Burma] to establish themselves as exporters," said Mohanty. "It will give them some of the market sales where Thai is going to lose out. So it’s definitely better for other competing exporters.”

India’s return to the global market pushed global rice prices lower while traditional rice importers such as Indonesia and the Philippines have also enjoyed good crops, further keeping prices low. The cheap prices have meant good news for consumers, but additional challenges for the Thai government, which must figure out a way to unload its growing stockpile of rice before it spoils.

You May Like

Photogallery Belgian Security Measures Foreshadow New Normal for Europe

Rising threat of terrorism, disaffected Muslim populations and open borders, along with refugee, migrant crisis, are creating perfect storm for Europe, which some analysts fear continent is ill-suited to weather

Competing Claims of Responsibility for Mali Hotel Attack

Malian authorities ask public for help in identifying gunmen killed in attack, amid conflicting claims of responsibility from multiple jihadist groups active in the country

Video Debt-ridden Refugees Await Onslaught of Lebanese Winter

Aid agencies are attempting to reduce potentially devastating consequences of freezing conditions and snowstorms that killed eight last year, including three Syrian refugees

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
After Paris Attacks, France Steps Up Fight Against ISi
November 24, 2015 3:04 AM
The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video After Paris Attacks, France Steps Up Fight Against IS

The November 13 Paris attacks have drawn increased attention to Syria, where many of the suspected perpetrators are said to have received training. French President Francois Hollande is working to build a broad international coalition to defeat Islamic State in Syria and in Iraq. Zlatica Hoke reports.

Video US, Cambodian Navies Pair Up in Gulf of Thailand

The U.S. Navy has deployed one of its newest and most advanced ships to Cambodia to conduct joint training drills in the Gulf of Thailand. Riding hull-to-hull with Cambodian ships, the seamen of the USS Fort Worth are executing joint-training drills that will help build relations in Southeast Asia. David Boyle reports for VOA from Preah Sihanouk province.

Video Americans Sharpen Focus on Terrorism

Washington will be quieter than usual this week due to the Thanksgiving holiday, even as Americans across the nation register heightened concerns over possible terrorist threats. VOA’s Michael Bowman reports new polling data from ABC News and the Washington Post newspaper show an electorate increasingly focused on security issues after the deadly Islamic State attacks in Paris.

Video World Leaders Head to Paris for Climate Deal

Heads of state from nearly 80 countries are heading to Paris (November 30-December 11) to craft a global climate change agreement. The new accord will replace the Kyoto Protocol on Climate Change that expired in 2012.

Video Uncertain Future for Syrian Refugee Resettlement in Illinois

For the trickle of Syrian refugees finding new homes in the Midwest city of Chicago, the call to end resettlement in many U.S. states is adding another dimension to their long journey fleeing war. Organizations working to help them integrate say the backlash since the Paris attacks is both harming and helping their efforts to provide refugees sanctuary. VOA's Kane Farabaugh reports.

Video Creating Physical Virtual Reality With Tiny Drones

As many computer gamers know, virtual reality is a three-dimensional picture, projected inside special googles. It can fool your brain into thinking the computer world is the real world. But If you try to touch it, it’s not there. Now Canadian researchers say it may be possible to create a physical virtual reality using tiny drones. VOA’s George Putic reports.

Video New American Indian Village Takes Visitors Back in Time

There is precious little opportunity to experience what life was like in the United States before its colonization by European settlers. Now, an American Indian village built in a park outside Washington is taking visitors back in time to experience the way of life of America's indigenous people. Carol Pearson narrates this report from VOA's June Soh.

Video Even With Hometown Liberated, Yazidi Refugees Fear Return

While the northern Iraqi town of Sinjar has been liberated from Islamic State forces, it's not clear whether Yazidi residents who fled the militants will now return home. VOA’s Mahmut Bozarslan talked with Yazidis, a religious and ethnic minority, at a Turkish refugee camp in Diyarbakır. Robert Raffaele narrates his report.

Video Nairobi Tailors Make Pope Francis’ Vestments

To ensure the pope is properly attired during his visit, the Kenya Conference of Catholic Bishops asked the Dolly Craft Sewing Project in the Nairobi slum of Kangemi to make the pope's vestments, the garments he will wear during the various ceremonies. Jill Craig reports.

Video Cross-Border Terrorism Puts Europe’s Passport-Free Travel in Doubt

The fallout from the Islamic State terror attacks in Paris has put the future of Europe’s passport-free travel area, known as the "Schengen Zone," in doubt. Several of the perpetrators were known to intelligence agencies, but were not intercepted. Henry Ridgwell reports from London European ministers are to hold an emergency meeting Friday in Brussels to look at ways of improving security.

Video El Niño Brings Unexpected Fish From Mexico to California

Fish in an unexpected spectrum of sizes, shapes and colors are moving north, through El Niño's warm currents from Mexican waters to the Pacific Ocean off California’s coast. El Nino is the periodic warming of the eastern and central Pacific Ocean. As Faiza Elmasry tells us, this phenomenon thrills scientists and gives anglers the chance of a once-in-a-lifetime big catch. Faith Lapidus narrates.

Video Terrorism in Many Forms Continues to Plague Africa

While the world's attention is on Paris in the wake of Friday night's deadly attacks, terrorism from various sides remains a looming threat in many African countries. Nigerian cities have been targeted this week by attacks many believe were staged by the violent Islamist group Boko Haram. In addition, residents in many regions are forced to flee their homes as they are terrorized by armed militias. Zlatica Hoke reports.

Video Study: Underage Marriage Rate Higher for Females in Pakistan

While attitudes about the societal role of females in Pakistan are evolving, research by child advocacy group Plan International suggests that underage marriage of girls remains a particularly big issue in the country. VOA’s Ayesha Tanzeem reports how such marriages leads to further social problems.

VOA Blogs

World Currencies


Rates may not be current.