If on 1953 Thailand had the monopoly on rice export, as you indicate, that seemed to be a good policy for that time (good for the seller, not for the final buyer or for global hunger). But today Thailand cannot compete with other countries at those inflated prices, and they are just stock-piling millions of tones of rice that they have bought to the farmers at a price 40% higher than the market. That is unsustainable in a long term.
They should give that rice to countries in need, like Philippines, before it is rotten.
"Just as the media and the public are losing interest in the government's populist rice pledging scheme, the latest report from the Rome-based Food and Agriculture Organisation (FAO) warns that Thailand may be running out of space to store rice.
It is a timely, if not a rough, wake-up call that the scheme is still kicking but that the worst about it is yet to emerge, like opening Pandora's box which is about to burst and spill out all the worms.
The FAO predicted that the rice stockpile will surge to a record high this year due to the rice pledging scheme to the point that there may be no room in warehouses to store the staple. According to the report, milled rice holdings may jump 40% to 18.2 million tonnes in 2013 as the government is expected to buy as much as 11 million tonnes of unmilled rice this harvest compared to nine million tonnes from the last harvest.
The UN agency said there may be a "looming shortage of storage space" as the government's stock release plans have progressed slowly, further aggravating the supply situation for an export sector that is "faced with little offshore demand".
Rice exports plunged 37% to 6.73 million tonnes last year _ the lowest level since 2000 _ rendering Thailand's fall from the world's top rice exporter to third place after Vietnam and India.
..."Continued on: FAO-warning-shows-folly-of-rice-pledging
"The International Monetary Fund has called on Thailand to drop its multi-billion baht subsidies for rice growers, saying the programme is undermining confidence in the country's finances.
The IMF said Tuesday in its annual review of Thailand's economy that losses in the programme will continue if the policy remains unchanged.
The rice buying programme, a flagship policy of Prime Minister Yingluck Shinawatra's government to win support in Thailand's vote rich farming regions, has accumulated losses of at least US$4.46 billion since it was introduced in 2011.
The government buys rice from farmers at above-market prices but has had difficulty in reselling the grain on international markets. The scheme was renewed by the cabinet for the third year in October but the government decided to cap the total value for each qualifying household.
"With the pledging prices about 40% above market prices, it is inevitable for the government to incur losses as long as the scheme remains unchanged," the IMF said in its report. "The government has committed 410 billion baht to the revolving fund for managing the scheme, but it is unclear how losses will be contained within the size of the fund."
Rice is the country's staple grain and one of its main exports. But India and Vietnam surpassed Thailand as the world's top rice exporters in 2012 as the government stockpiled rice to avoid even bigger losses.
The IMF also said lack of data about the rice purchasing program has diminished confidence in Thailand's public finances.
Thai officials said in the report that a reduction in the pledging prices or a purchase limit might be necessary to sustain the policy but insisted the scheme was aimed at reducing economic inequality in the Southeast Asian nation.
The IMF suggested the government replace rice price pledging and other generalised subsidies with programs that are targeted at vulnerable groups, including low-income farming households.
Governments have intervened in the rice market through a variety of means since the early 1960s to help farmers, but the current scheme has its roots in the populist policies of Ms Yingluck's brother, former prime minister Thaksin Shinawatra, who won landslide victories in two elections before he was ousted in a 2006 coup.
The scheme has been dogged by corruption and accusations the government has hidden its true cost." IMF-urges-thailand-to-stop-rice-scheme