Ministers face off over sale

Abhisit said Deputy Premier Suthep Thaugsuban of the Democrat Party would mediate between Korbsak |and Porntiva, whose ministry has agreed to release more than 2 million tonnes of rice from government warehouses to the private sector at a hefty loss.

During yesterday's Cabinet meeting, Korbsak, also a Democrat, grilled Porntiva, a key figure of coalition partner the Bhum Jai Thai Party, over her ministry's deal with rice exporters.

Sources said the transaction could lead to more than Bt10 billion in losses for the government, which bought the rice last year in a bid to shore up domestic paddy and rice prices.

The 2 million tonnes of rice cost the government Bt18,000 a tonne plus storage and other expenses but was sold for only Bt14,000 a tonne.

Besides white rice, the deal includes an undisclosed amount of more expensive jasmine rice, whose loss will be larger.

A senior commerce official said the Cabinet's decision to put the rice sale on hold would lead to more problems for the government.

"Many rice traders could sue the government for damages, since they already signed contracts with the ministry to buy the rice," the source said.

Last week, the Commerce Ministry's Public Warehouse Organisation approved the sale of more than 2 million tonnes of this rice to 17 exporters.

The stockpiled rice will be transferred to the buyers pending Cabinet endorsement of the results of the ministry's sale.

Cabinet sources said all sales of agricultural crops in government hands since May 13 required the Cabinet's nod.

However, the Commerce Ministry started the tender for the rice on May 6.

A rice-trader source said the ministry should have cleared up the problem before inviting bids.

"We [traders] are caught in the middle [of this row]. We cannot move the rice from warehouses, thus missing delivery deadlines in contracts signed with importers. The government needs to sell the rice quickly, because its quality has deteriorated," the source said.

When asked about being sued by the private sector, Abhisit dodged the question and asked the Commerce Ministry to clarify its position.

Abhisit said his Deputy PM Suthep would listen to both sides in order to help end the conflict.

Earlier, Porntiva told the Cabinet she needed to sell the rice now to avoid bigger losses in the future, as major rivals, especially India and Vietnam, would shortly release their supplies into the market.

Korbsak said there was a lack of transparency in implementing farm-crop intervention programmes under the ministry.

"The quality of the rice is a major issue. We may need closed-circuit TVs to monitor all warehouses, as the rice is usually of high quality when it is purchased by the government. However, it usually turns out to be of low quality when it's about to be sold," he told the Cabinet.