BANGKOK — Thailand's government on Tuesday acknowledged losing more than $4.46 billion in one year in a much-criticized scheme to support rice prices that ended up dislodging the country from its spot as the grain's top exporter. The program is likely to be amended to reduce the losses, the commerce minister said.
Prime Minister's Office Minister Warathep Rattanakorn said government sales of rice it purchased from farmers fell far short of the sum it paid to the farmers under the 2011-12 subsidy program, accounting for the loss. The government had been criticized for refusing to disclose the losses and the amount of rice it has been forced to stockpile.
Under the scheme, the government buys rice from farmers at about $490 a ton, hundreds of dollars more than the market price. Its inability to resell much of it on the international market allowed India and Vietnam to surpass Thailand in the value of their rice exports.
The government's National Rice Policy Committee announced plans on Monday to lower the payments to farmers.
Commerce Minister Boonsong Teriyapirom said the Cabinet is expected to approve the planned change and it is likely to take effect June 30.
"The adjustments will show that even though the government is trying to implement several policies that benefit the people, it is also adhering to fiscal discipline," he said.
Prime Minister Yingluck Shinawatra said the government will attempt to reduce its losses by cutting expenses but also strive to maintain farmers' incomes.
Subsidies for rice farmers were launched in 2004 when Yingluck's brother, Thaksin Shinawatra, was prime minister and implemented a host of populist policies. The scheme was criticized then for alleged graft and high costs, and Thaksin was ousted by a military coup in 2006 after protests in the capital against his alleged corruption and abuse of power.
