Thai rice woes rebound on crisis-hit govt

AFP, Bangkok :
Angry farmers, a rice mountain and a slew of corruption allegations-a flagship policy that helped propel Thailand’s premier to power now threatens to boomerang on her embattled government.
Prime Minister Yingluck Shinawatra is struggling to steer the Southeast Asian nation through a policy vacuum created by a chaotic general election earlier this month.
A controversial rice subsidy scheme, which paid farmers up to 50 percent above market rates, helped her sweep to power in 2011 but now appears to be unravelling.
Critics say the programme has incubated massive corruption, drained the public finances, dislodged the kingdom as the world’s top rice exporter and created an estimated 18 million-tonne stockpile of the grain.
Hundreds of farmers have protested recently in Bangkok to demand payment after the government ran short of cash to buy their pledged crops late last year, adding to pressure on Yingluck, who has faced months of opposition rallies.
The cabinet earmarked nearly $22 million Tuesday for about 3,900 farmers but, in a sign of the policy constraints it faces, the payments must be approved by the Election Commission.
An estimated one million farmers nationwide are owed money, according to the Thailand Development Research Institute, which says the government may need to find $3.6 billion to catch up with payments.
Thailand sought to recoup the money paid to farmers by hoarding rice to drive up prices on world markets, but it was unable to find buyers after rival producers such as India and Vietnam unexpectedly boosted their shipments.
The Thai Rice Exporters Association forecasts the kingdom will sell 7.5 million tonnes overseas this year, down more than 30 percent compared with 2011.