Before the military coup which brought Prayut Chan-o-cha to power in 2014, he was a staunch critic of Yingluck Shinawatra’s rice subsidy schemes. Now he has launched an almost identical scheme of his own to appease rural voters, and the hypocrisy only shows a lack of fresh ideas on solving the crisis.
By Oliver Ward
Prayut Chan-o-cha’s scathing comments about the folly of exploiting the global slump in rice prices for political gain still hang in the air. But only weeks after former Prime Minister Yingluck Shinawatra received her huge USD$1 billion penalty for a loss-inducing rice subsidy program the military leader is apparently keen on repeating the past. His military government have just announced their own USD$1.5 billion subsidy program to protect rice farmers from falling prices.
An impending crisis
Behind the decision is a global slump in the price of the Asian food staple, currently at USD $143 per tonne, which is straining the income of Thai farmers. As the world’s second-largest rice exporter, Thailand’s rural heartland depends on the crop for their livelihood. And when rural agricultural communities make up around 40% of the population, appeasing this demographic provides much-needed support for the administration.
The previous government launched its subsidy scheme in 2011, based on a system of buying rice at 50% above the market price and stockpiling it in an attempt to reduce supply and drive prices back up. However, the scheme backfired and allowed other countries like India and Vietnam to fill the gap in supply, not only leaving prices low but leading Thailand to fall off the top spot as the world’s biggest exporter. Yingluck Shinawatra faced intense criticism for the plan from her eventual successor Prayut.
However, the current scheme being rolled out by the junta is almost identical his predecessor’s. It promises to buy the rice at above-market value and provides financial incentives to farmers to keep their grain in storage. The only significant difference between the two schemes is that under Prayut’s scheme the farmers are responsible for stockpiling their own rice instead of using government warehouses.
No way out
The situation seems to be that, having been vocal in voicing their derision for Yingluck’s idea during recent investigations, the military junta has shot itself in the foot. By publicly trashing government subsidies and using the former scheme as a weapon against Ms Yingluck, Prayut has left himself without a method of intervening in the crisis without losing face.
Public opinion is also firmly behind the struggling farmers. Online campaigns are springing up across Thailand to encourage people to buy directly from growers and cut out the extra costs of middlemen. Puanthong R. Pawakapan, an associate professor at Chulalongkorn University, said the junta “simply cannot ignore the plight of the farmers anymore, especially [if] they wish to be in power for the long term”. It seems that this reality is dawning on Prayut, forcing him to make an awkward U-turn.
The other reading of this almost-identical rollout is that there is a complete lack of ideas within Prayut’s government regarding tackling the problem. Yingluck’s scheme already demonstrated that global supply and demand cannot be controlled by Thai domestic policy, but Prayut still continues to persevere using the same combination of stockpiling and populist policy. He just expects a different result.
Exacerbating the problem
When Prayut inherited an estimated eight million tonnes of stockpiled rice, his first port of call was to change the planting and harvesting cycles. Early in 2016, in the midst of a drought, he ordered the farmers in the central provinces not to grow paddy rice in the first half of the year.
Then, when the monsoon arrived in June, farmers rushed to the paddy fields to plant their crops, instead of waiting for the last quarter of the year when fresh rice paddy is usually planted. This meant that the harvesting of the paddy took place in October and November, the time usually reserved for harvesting Jasmine rice.
Decharut Sukkumnoed, an agriculture economist at Kasetsart University, believes this change to the traditional harvesting periods has only increased overproduction. Millers are at overcapacity and instead of reducing the production of rice to increase global prices, Thai farmers are yielding more than ever before.
In the days following the junta’s adoption of a renewed subsidy scheme, Yingluck Shinawatra bought ten tonnes of rice from farmers and publicly helped to sell it outside a busy Bangkok shopping mall. It seems that despite her own failure she is capitalising on the moment to score political points. She also wrote on her Facebook page earlier this month about the “dire situation” of the farmers and called on her followers to buy from them directly.
At the heart of the political games and tit-for-tat public displays is a deepening crisis for the rural Thai population. Government policies have so far been insufficient in tackling the problem and Yingluck can smell blood in the water. Pressure is mounting on the junta to contain the situation to preserve their power and avoid civil unrest. Their hypocrisy is beginning to look a lot like a fight for survival.