For farmers' sake, the blame game must end now

opinion February 20, 2014 00:00

By The Nation

It's time for the government to take responsibility and focus on the plight of more than a million rice growers who have fallen victim to its disastrous crop pledge

Wealthy government politicians and their supporters have deposited several million baht in the state-run Government Savings Bank (GSB), some of them opening accounts for the very first time at this bank popular among schoolchildren and people on low incomes.
The publicity move was obviously aimed at countering a damaging run by customers on GSB deposits. The bank saw massive withdrawals totalling Bt30 billion on Monday and another Bt40 billion on Tuesday, against deposits of Bt10 billion and Bt12 billion, respectively. Most of the deposits came from state enterprises, according to sources. 
The run on the bank, which is a rare phenomenon in a normal economic times like these, has been described as “punishment” by depositors on the GSB for extending an inter-bank loan of Bt20 billion to the Bank of Agriculture and Agricultural Cooperatives (BAAC).  The GSB claimed the loan was given to help improve the BAAC’s liquidity, but critics suspected it would go towards paying off government debts to farmers under the controversial price-pledging scheme. 
Following the deposit run, GSB’s board of directors on Tuesday cancelled the loan and agreed to pull back the first batch of Bt5 billion already given to the BAAC. GSB president Woravit Chailimpamontri also tendered his resignation on Tuesday, after mounting pressure over the issue. He cited distrust among GSB staff and suspicions that he was a political tool, running the bank to serve government policy.
Caretaker Prime Minister Yingluck Shinawatra, in her television address on Tuesday, blamed the government’s political enemies for its failure to repay the Bt110 billion owed to farming households. She said anti-government groups were “holding the farmers hostage” and blocking the government from implementing the scheme effectively.
On the same day, the National Anti-Corruption Commission (NACC) charged the prime minister with negligence and dereliction of duty over the rice-subsidy scheme. This could lead to criminal prosecution and impeachment proceedings if the anti-graft agency is unhappy with her explanation.
The latest moves by the government and its people, which came after angry farmers brought their protest to Bangkok and demanded immediate payment of their long-overdue debts, are unlikely to help all the farmers get the money owed to them. The government cannot expect to rely on borrowing every time it needs funding for its projects. The government has spent an estimated Bt500 billion in budget allocated to this rice-subsidy project in the past two years. But it still owes more than 1 million farming households about Bt110 billion. An estimated 15 million tonnes of rice is lying in government stockpiles, waiting to be sold. The delay has cost Thailand its status as the world’s top rice exporter – it now lies third behind Vietnam and India.
The government appears to be blaming others for mistakes and mismanagement of this project. It was warned repeatedly by local and international agencies of large-scale irregularities in this loss-making scheme, but chose not to listen. 
As such, the government must take the responsibility for the failure to repay debts to the farmers. The problems it is facing from desperate farmers and the anti-graft agency, among others, are self-inflicted. Borrowing to finance the loss-making rice scheme will only lead to more financial burden for the taxpayers. This is not a wise course, nor one commensurate with a responsible administration.
Anyone who genuinely wants to help the farmers would ensure that the rice-subsidy scheme is free from corruption and that sales from government stockpiles are efficient so that farmers are paid for their crops. Depositing money in the GSB and pointing the finger at the government’s political enemies is unlikely to help desperate farmers.