Rice losses at 'Bt200 bn a year'

Economy October 22, 2013 00:00

By The Nation

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Ministry completes audit; state banks enlisted to ease millers' liquidity

The Finance Ministry yesterday put the annual losses from the government’s controversial rice-pledging scheme in the vicinity of Bt200 billion after wrapping up its audit.
Supa Piyajitti, deputy permanent secretary and chairwoman of the audit team, did not disclose the exact figure from the audit report signed by her former boss Areepong Bhoocha-oom. Areepong was transferred from permanent secretary of the ministry to the post of secretary-general of the Public Sector Development Commission, reportedly for his inability to control Finance Ministry officials who repeatedly expressed concerns over the scheme’s impact on the national fiscal position.
Former deputy prime minister MR Pridiyathorn Devakula has estimated a loss of at least Bt425 billion in the first two years of the scheme, which kicked off in 2011.
The audit report will be reviewed by the National Rice Policy Committee before it is passed on to the Cabinet for acknowledgement.
“The report’s scope does not cover observations on possible irregularities, but it insists that the account-closing committee include representatives from agencies like the Public Debt Management Office and State Enterprise Policy Office to prevent any impacts on the country’s monetary and fiscal stances,” Areepong said.
When he bade farewell to the ministry yesterday, he told all officials there to adhere to their tasks in nurturing the national fiscal position. 
The ministry is the key agency that has to deal with the world, he said. 
The pledging scheme is now in its third year. The Finance Ministry is being pressed to find fresh funds for the scheme, which has exhausted nearly Bt700 billion. Some state-owned banks are also being asked to help out. 
Manoonrat Lertkomolsuk, president of the Small and Medium Enterprise Develop-ment Bank of Thailand, said Thai Credit Guarantee Corporation (TCG) was asked to guarantee the borrowings of rice mills with insufficient collateral. 
This would augment their working capital to purchase rice from the scheme.
The bank’s factoring product has been offered to rice mills and surveyors to improve their liquidity. About Bt400 million has been loaned to rice mills on expectation of Bt600 million more to be lent to them by the end of this month and Bt5 billion in total by the end of this year.
Vallobh Tejapaibul, general manager of TCG, said the corporation was in discussions with the bank to guarantee millers participating in the rice-pledging scheme for the 2013-14 harvest season in order to improve their liquidity to purchase rice. 
TCG still has funds left in Phase 5 of the Bt240-billion Portfolio Guarantee Scheme for such a plan. 
Luck Wajananawat, president of the Bank for Agriculture and Agricultural Cooperatives, said the bank was holding talks with TCG to guarantee rice mills with insufficient collateral. 
The bank’s normal credit line for rice mills is Bt2 billion.