BAAC moves to prevent rice-pledging fraud

After working closely with farmers for decades, the bank has compiled information on them to double-check whether they are real farmers. In addition, the bank's employees have been sent to rice mills participating in price intervention measures to inspect all documents and processes to purchase paddy rice from farmers. The staff also monitor the polishing and stocking process.

The bank has had to take responsibility for the government's pledging programme for the first time following Prime Minister Samak Sudaravej's order early last month.

Samak ordered the Finance Ministry to handle the pledging programme instead of the Commerce Ministry, aiming to create a quick measure to shore up rice prices after they hit a record level for a short time.

He said the Cabinet would draw up a policy that ensures farmers continue to enjoy high rice prices. A part of the measure includes quick sales under government-to-government contracts.

Having handled the price intervention programme since June 15, the bank has purchased about 20 per cent of its target: 508,506 tonnes of paddy rice worth Bt6.71 billion from 38,285 farmers.

BAAC senior executive vice president Ennoo Suesuwan said the bank had to handle the processing steps from paddy rice to polished rice. Consequently, it has to expand storage space to stock rice before sales.

The bank will soon set up two or three new central warehouses at Pathum Thani and Samut Sakhon for the convenience of rice millers, shortening transportation and reducing their costs. The bank currently manages 33 central warehouses nationwide, mainly in the central region.

A second rice crop is expected to enter the market to t September.

Previously, the Cabinet approved a budget of Bt35 billion to support the rice pledging programme, which targets the purchase of 2.5 million tonnes of the second crop of paddy rice.

Under the subsidy measure, the BAAC will purchase paddy rice from farmers at a price of Bt14,000 per tonne at a moisture level of 15 per cent. The guaranteed price will drop in line with the moisture level.

 Ennoo said the bank had learned  to  launch stringent restrictions to protect against corruption. It has systemised not only inspection methods but also the logistics system to ensure transparency.

"We have talked with farmers and they are satisfied with our restrictions to gain fair prices," he said.

However, the BAAC has not been ordered to manage marketing strategy or prices. Prices under intervention will be quoted by a sales committee, tol make decisions on when stocks will be released and at what price.

Ennoo said the programme would encourage small and medium-sized millers to participate more in the government price intervention scheme. It will also allow them to develop their management to  standard operations.

Previously, the government's rice subsidy had been controlled by major millers. However, they were put on a blacklist for illegal practices and cheating the government's rice programme.

Ennoo added that rice stocks should be sold in six months to ensure high quality. If the rice is kept in stock longer than this, both quality and price decline.

However, the market price of rice has declined as buyers delay purchasing and gain more bargaining power.