The unsuccessful plan of Thailand to control global prices of rice



Mexico City, February 17, 2014 – . Minister of Thailand, Yingluck Shinawatra, has implemented a plan in 2011 that included the purchase of rice by the government at prices up to 50 % above the market price, with the idea to hoard it and push the rising international grain prices.


The attempt to influence the price of rice in the market has been unsuccessful and left the Thai government with 18 million tons of rice (almost double what the country normally exports in a year) therefore the prime minister promised that Wednesday to will pay millions of dollars rice farmers who have been affected with this grant program.


The situation for rice farmers has been extremely difficult , in northeastern Thailand in Ban Non Son, one chose suicide after being engulfed in a huge debt .


Yingluck two years ago launched an initiative to transfer more cash into the rural economy to buy rice from farmers at $ 550. With this, the Prime Minister and his advisers estimated that could lead to rising global grain prices to store supplies and prevent them from reaching international markets .


Precisely countries like India and Vietnam temporarily restricted their exports and when Thailand started with the project for the storage, India reactivated its activities and Thailand could not compete in the market and the huge rice stocks could not be sold. Paper losses in the first two harvests in 2011 and 2012 totaled $ 4,000 million , and former president of the central bank, Pridiyathorn Devakula, estimates the total loss would amount to $ 12,000 million.


Yingluck ‘s plan had only one success : many people in rural areas of Thailand and got enough cash purchases of televisions and mobile phones were on the rise. The household debt soared to over 80 % of GDP.


Currently Prime Minister faces a corruption investigation and could end in a lawsuit against the Senate and his dismissal, Yingluck says his plan helped raise rural incomes and blamed the protesters for the delay in payments to farmers as was in the aforementioned case of the farmer,  who waited for four months a payment for their crop and the money never came.


Mexican Business Web, with media information. 

Suscríbase al Newsletter
Acerca de Mexican Business Web