The politics of rice in Thailand
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The politics of rice in Thailand

On the day after the coup, the junta announced they would immediately pay farmers monies owed from the rice pledging scheme.  One of the first tasks by the junta was to repay farmers. At the time of the coup, 92 billion baht had not been paid to farmers and since then around 5-6 billion baht a day has been paid out (around 30 billion baht had been paid since January when pressure came on the government over the failure to pay farmers and prior to that 70 Billion Baht had been paid). By the end of June, it seems likely that all outstanding payments will be made.


But if the country’s ruling generals expected gratitude, it was not on display on Tuesday in this northeastern town, a bastion of the former governing party, which the military overthrew in a coup last Thursday.

“I still have anger in my heart,” said Maitree Vichapa, a farmer and part-time carpenter who arrived with his wife and child to receive 27,000 baht, or around $850. “We should have had this money a long time ago.

The military also cranked up its propaganda machine, aided by the Thai news media, which has been largely subservient since the coup. “Farmers Receive Money With Tears of Joy,” ran the headline in a national newspaper, Ban Muang.

Other reports showed farmers marching to army bases to hand over red roses and holding up banners proclaiming appreciation for the general who led the coup, Prayuth Chan-ocha. Identical banners, featuring rice stalks and the same image of General Prayuth raising his hand in the air, were paraded by farmers in Phuket, Lopburi and Ubon Ratchathani, provinces that are separated by hundreds of miles.

Thai newspapers quoted farmers praising the military in highly formal language.

“We, on behalf of all farmers, would like to thank you for your true kindness and understanding of the hardship of the people,” a man who was described as a farmer was quoted by the ASTV Manager news website as saying. “We are here to offer moral support and flowers to thank you, the military of the entire people.”

“Real farmers wouldn’t come out and do those things,” said Duen Douangchansi, a farmer who received 280,000 baht (about $8,580) on Tuesday. “Real farmers would be too busy working.”

David Streckfuss, an expert in Thai politics who is based in the northeast, where the former government was popular, said the army was unlikely to win over many people in the region by handing out the rice money.

Simply paying people for what they are owed is not going to buy the military any popularity, or somehow legitimize it,” Mr. Streckfuss said.

FT on a visit to the Northeast notes:

Several Isaanis said they felt patronised rather than grateful over what they see as a crude effort at bribery by the junta, which has pledged to pay almost $3bn of unpaid rice subsidies owed to farmers in the region and elsewhere.

BP: Some comments:

At the time of the coup just under half of the 190 billion baht in the current pledging season had yet to be been paid. Not all the voices of support for the military quickly paying the farmers is off former Puea Thai voters, because in many of the provinces where there are many rice farmers particularly in the Lower North there are large pockets of Democrat voters. The failure of the Puea Thai government to pay them is hardly going to make them more likely to vote Puea Thai.

For Puea Thai voters who had already received money – you have to remember more than half of rice farmers had received the money in the current season (as well as for 2 years prior to this) before the coup although it was certainly delayed for this season for many – so for those who had received their money they don’t have much personal reasons to be grateful to the military. In addition, a survey by the Thai Chamber of Commerce last year showed the scheme was popular amongst rice farmers – see here and here.

For Puea Thai voters who hadn’t received their money, this depends on who they blamed. BP does think you can apportion plenty of blame on the government in not ensuring adequate monies to pay the rice farmers for the season that ended at the end of February. Even before the dissolution there were delays in payment, but then again, the PDRC seized the Ministry of Finance on November 25 (around 2 weeks before the dissolution) and other ministries involved in raising money to pay farmers. Many farmers will be upset at the Puea Thai government regardless but, as stated in the above stories, many won’t as they will assign more blame to protesters and others who prevented the government from paying farmers.

Nevertheless, there is another problem for Puea Thai aside from those Puea Thai voters who feel grateful to the military. The previous government faced protesters, lawsuits, court decisions, and all manner of obstacles. Whereas the junta can just do anything it wants. So not only will some voters feel grateful that the junta has loosened the purse strings and allowed monies to be paid, it is also the quickness and lack of obstacles. The question is, how many Puea Thai voters will lose heart over a pro-Thaksin party’s ability to implement policies successfully without the policies being blocked by opponents?

However, don’t expect all things to be plain sailing for the junta. Rice pledging officially ended in February when the Yingluck government didn’t renew the scheme, but now we already have calls for farmers for a new rice pledging price. The Bangkok Post:

Thai Agriculturists Association president Wichian Phuanglamjiak said the NCPO should enforce measures to ensure the market price of rice covers the actual cost of production plus some sort of profit.

He said the junta must help farmers if it abolishes the rice-pledging scheme, since the production cost of rice is currently 7,000-7,700 baht per tonne, compared to an average market price of 4,000-6,000 baht.

Farmers should be able to make a 40% margin on top of their average production cost, meaning they should be able to sell rice for 10,000-12,000 baht, he said.

Mr Wichian said growers also want the junta to help supply them with affordable rice farming materials and to help them access markets in which growers can sell their grain directly to rice buyers.

He added that the NCPO has promised to come up with ways to tackle the issues before June 20.

Rice farmers’ representative Rawi Rungruang told the NCPO the state should offer a subsidy of 3,000 baht per tonne of rice.

Prasit Boonchuey, president of the Thai Farmers Association, said farmers must be given subsidies calculated per rai of land.

BP: There you go, there are three different opinions on how subsidies should be given out. There will also be academic advice as well. Unless the junta spends around 100 billion baht a year, it will be difficult to give farmers anywhere close to the level of subsidy they want.* The junta has a populist streak, but it will be difficult to go back on the rhetoric of criticism of recent years against a rice pledging scheme so BP expects that the junta will choose a different method whether subsidies per rai or per tonne or subsidies at the production stage or mixture of these.

In the next couple of months, this is not likely to be a big issue particularly with martial law and current legal restrictions in place on criticism of the junta and that any new scheme will probably only start in October (when the main harvest starts), but BP expects the level of money the junta will spend will likely be short of what farmers want and once we have the installed PM in place, there are likely to be less restrictions in place. We will then see see at the end of the year/beginning of next year see more clearly how farmers view the new policy. Then you also have the issue for Puea Thai voters (as of the last election, at least), how they view this policy compared with rice pledging to see how their views about Puea Thai change.

*World rice prices this week hit the their lowest since 2008 and there are no signs yet of any change and this part of the reason why more than 100 billion is likely needed (whereas one year ago 90-100 billion probably would have been enough).