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Yingluck’s Rice Policy Discourages Local Corruption, Farmers Say

2011 October 7
by The Isaan Record

KHON KAEN – As the Pheu Thai government launches its rice mortgage scheme today in 31 provinces, experts fear that the new policy will offer little benefit to small-scale farmers and instead invite increased graft and corruption among millers and national politicians. Many of Thailand’s rural rice farmers, on the other hand, commend the policy as one that actually helps discourage corruption at the village level.

Today, these farmers welcome not only a promised salary increase, but also a pro-business policy that they believe better rewards hardworking farmers and enables informal laborers to reap increased benefits.

“Abhisit’s rice price guarantee policy—it’s the same as teaching farmers how to be corrupt,” said Mr. Udom Phanphrasee, a jasmine and sticky rice farmer in Ban Yan Yong village in Khon Kaen Province. “I sometimes only planted five rai on my 18 rai of land, and I would get the price guarantee for all 18 rai,” he said with a smirk. (One rai is roughly equivalent to two-fifths of an acre.)

The campaign promise of Prime Minister Yingluck Shinawatra won the hearts and votes of the rural constituency much as it had for former Prime Minister Thaksin Shinawatra, Ms. Yingluck’s older brother. Ms. Yingluck’s policy raises the price of rice nearly 50 percent, offering farmers mortgages of 20,000 baht for one ton of unmilled jasmine rice and 15,000 baht for one ton of unmilled white and sticky rice.

Under Abhisit’s price guarantee policy, landowning farmers could register with the Bank of Agriculture and Agricultural Cooperatives (BAAC) as soon as they had planted their rice. Government representatives from the bank would calculate the landowners’ expected rice production and later pay the landowners the difference between the market value and the government-guaranteed price.

Though representatives of the BAAC claim that farmers’ paddies were frequently monitored, the farmers of Ban Yan Yong village in Khon Kaen talk openly about how trickery and corruption at the village level were par for the course.

Ms. Jongkolrat Kanruensri, the manager of the Khon Kaen branch of the BAAC, recognized this tendency, as well. “Under Abhisit’s plan, people with mortgages often didn’t have as much rice as they claimed they did,” she said.

Many villagers complain that landowners would bribe or beg neighbors to falsely vouch for how much rice they had planted. With signatures of witnesses, the landowners could trick government representatives by under-planting on their fields, poorly tending to their rice plants, or claiming floods ruined land that had never even been seeded. Ultimately, landowners were often rewarded for the number of rai they owned and not for the amount of rice they actually harvested.

“I thought Abhisit’s policy was good because the government subsidized us just for being rice farmers. But it was bad when people started taking advantage of that,” said Mrs. Nongyao Reuthaphrom, a 27-year-old sticky rice farmer.

Under Pheu Thai’s new mortgage policy, farmers are rewarded with a loan only after they have harvested their rice. This way, villagers argue, landowners cannot lie about how much rice they are producing.

Somporn Isvilanonda of the Knowledge Network Institute of Thailand (KNIT) explained in an e-mail interview that he, like most academics, is more concerned with the opportunities for corruption in Ms. Yingluck’s plan than he was in Mr. Abhisit’s.

“Under Abhisit, there could be minor corruption at the cultivated-area registration process,” wrote Prof. Somporn. “But I consider it to be very small.”

Instead, Mr. Somporn believes that poorly regulated rice millers now have a greater incentive to replace good quality rice with poor quality rice.

In the new policy, national politicians who are assigned to specific mills are each asked to meet a certain quota of rice. This mandated relationship between the millers and the politicians, the National Rice Committee member argues, can also lead to increased corruption.

Ban Yan Yong farmers, however, are less concerned about corruption that occurs at the mills and more concerned with the ways in which this policy brings fairer pay to its community members, most of whom farm on rented plots from wealthy landowners.

According to a 2011 World Bank report, Thailand’s informal agriculture workforce stands at 14.4 million people. Under Abhisit’s price guarantee policy, landlords could exploit millions of these farmers because it was the landlords, and not their tenants, who directly received the price difference between the market value and the guaranteed price. Now, it is hoped that the renters will have more leverage.

One farmer from Ban Nong Ngu Leuam village said that in her community most landowners with over 20 rai of land typically have renters. “Those who are renting the land will pay the landowner a rental fee and then try to sell their harvested rice commercially. But under Abhisit, the landowner received the price difference and never had to pay it over to the renter.”

“If people were honest all of the time, Abhisit’s policy would work. But people aren’t honest,” said Mr. Somjai Reuthaphrom who rents five rai of land from one of his neighbors in Ban Yan Yong village.

Mr. Somjai has seen many of his renter friends weather plummeting incomes under Abhisit’s administration. Greedy landlords chose not to pay their renters the difference between the market price and the guaranteed price that they had received from the government.

With Pheu Thai’s policy in place, Mr. Somjai and others believe that the informal agriculture sector will see far greater rewards. As the guaranteed price of rice rises, land renters’ salaries should increase as well.

Pheu Thai’s rice mortgage policy is scheduled to run through February 29, 2012.

6 Responses leave one →
  1. October 14, 2011

    Two or Three Questions :

    Is it still landlords rather than farmers who register crops? or
    Can the actual farmers… independent of whether or not they ‘own’ land register their crops directly?
    Who gets the government check on payday – the farmers or the landlords?


    • The Isaan Record permalink*
      October 20, 2011

      The answers to your questions about Yingluck’s rice mortgage policy are as you guessed.

      It is still landlords rather than farmers who register crops.
      The actual farmers who do not own land cannot register their crops directly with the government. However, the hope is their rice will be valued higher.
      And the landlords, not the famers, get the government check after they have harvested rice and register with the Department of Agriculture and the Bank for Agriculture and Agricultural Cooperatives (BAAC).

      Thanks for your interest,
      The Isaan Record

  2. September 19, 2012

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