Govt accused of rice sale irregularities

Economy July 15, 2017 01:00

By WICHIT CHAITRONG
THE NATION

MEMBERS of the Pheu Thai Party have asked the Auditor General to investigate the government’s programme of rice auctions dating to the 2014 coup, alleging irregularities that have caused losses to the state.



The party members led by Yuttapong Charasathein, a former deputy minister of agriculture and Cooperatives, yesterday filed a complaint with the Office of the Auditor General over the alleged irregularities.

Chief among their concerns is that rice fit for human consumption had been declared low grade, and was auctioned off for animal feed and industrial purposes. The sale of rice stocks classified in that category fetched lower prices and, the MPs claim, resulted in reduced government revenue.

In the complaint, the Pheu Thai members questioned why the government sold fragrant rice as animal feed from a number of warehouses. Yuttapong said Prime Minister Prayut Chan-o-cha, as chairman of the National Rice Policy Committee, knew about this practice.

The Commerce Ministry yesterday denied any irregularities in the auctions. 

The Pheu Thai members say the government should have sold the rice at reduced prices or given it to the poor, rather than accept the much lower prices resulting the stock being put up for sale as animal feed.

They demanded that the Auditor General investigate the rice auctions - numbering more than 20 since August 2014 – to find out whether corruption was involved. 

The Pheu Thai members suspect that ML Panadda Diskul, chairperson of the committee responsible for testing rice quality, might try to blame the Pheu Thai Party for the reduced auction revenue resulting from the quality rice being passed off as low grade stocks.

The government has said the Pheu Thai Party presided over a corrupt rice-pledging scheme, before it was ousted from government in May 2014.

Deputy director-general of the Foreign Trade Department, Keerati Rushchano, yesterday denied an allegation made by the Pheu Thai members that that the irregularities in the government’s rice auctions had caused losses of around Bt10 billion. 

He said department did not approve a bid to pay Bt11.25 per kilogram for food-grade rice at one auction because the offer did not meet minimum price threshold set by the authorities. While authorities approved Bt 6.10 per kilogram in a later round auction because the bulk of that rice was not food grade.

 Director general of Foreign Trade Department Duangporn Rodphaya said there was clear criteria for which companies could bid at the acutions. Bidders must not have record of breaching contracts or causing damage to the public interest. So some bidders were not qualified to participate the bidding, she said. 

She said that people needed to take into account the differences in price between food grade and non-food grade rice. The rice auction committee comprises representatives from many state agencies, so no one official could collude with some bidders, she said.

She said that white rice inventory accumulated from the Yingluck government’s rice price-support scheme totalled 17.76 million tonnes. Out of this amount, only 2.2 million tonnes met benchmark quality. As of June this year, the government sold via auction 13.6 million tonnes worth Bt126.5 billion including exports of 361,648 tonnes worth of Bt3.5 billion. 

The Commerce Ministry has put a further 160,000 tonnes on auction. The ministry estimated that 740,000 tonnes could not be put on auction due to its severe rotten state and a legal dispute with some rice mill operators.

She said the government had not been able to sell rice at higher prices because of poor quality and market pressures. If the government had to sell rice at the prices the previous government paid for stockpiling, the auction minimum price would be as high as Bt22,00 to Bt23,00 tonne for white rice and between Bt29,000 and Bt30,000 a tonne of jasmine rice. 

Meanwhile, Somporn Isvilanonda, a rice expert and member of the committee examining rice quality, said that the Pheu Thai politicians might be trying to play political games with their complaint to the Auditor General. He assured that the rice auctions were transparent. 

Somporn also said the cost to the public from the pledging schemes of past governments came to an estimated Bt500 billion.