Thai govt bid to sell old rice brings back bad memories linked to Yingluck

BANGKOK – Commerce Minister Phumtham Wechayachai has eaten it. So has Premier Srettha Thavisin. In recent days, Thailand’s Pheu Thai-led government has revived political ghosts by trying to sell off the remnants of rice stockpiled for 10 years under a ruinous rice subsidy scheme implemented the last time it was in power.

Both men have tried the rice to prove that it is safe to eat. Mr Phumtham has even declared that there is a market in African countries for old rice. But the very public attempt to auction off 15,000 tonnes of rice has drawn Pheu Thai’s critics out of the woodwork and triggered allegations that the party is trying to downplay the wrongdoings of fugitive former prime minister Yingluck Shinawatra. It has worsened the scrutiny of a government already under pressure to show economic results.

The amount of decade-old rice up for auction is less than 1 per cent of the more than eight million tonnes that Thailand exported in 2023. Mr Phumtham – long seen as the right-hand man of Pheu Thai patron Thaksin Shinawatra – has denied he has a political motive, saying he is merely fulfilling his duty to maximise revenue for the state.

But his actions have backfired, said ISEAS-Yusof Ishak visiting fellow Napon Jatusripitak.

“It brought the rice-pledging scheme back to the forefront of discussion. It reminded voters, who had actually forgotten, about how much of a failure that policy was. It also undermines the quality of Thai rice in the eyes of the international audience,” he told The Straits Times.

Yingluck, who helmed Thailand from 2011 to 2014, continues to live in exile abroad – unlike her elder brother Thaksin, another fugitive former prime minister who returned to Thailand in 2023.

Yingluck was ousted in 2014, shortly before a military coup toppled her government. In 2017, she fled overseas and was later sentenced in absentia to five years’ jail for negligence over her government’s rice-pledging scheme.

The programme allowed farmers to sell unlimited amounts of rice to the state at about 50 per cent above the market price, leaving the government with a 19 million tonne stockpile and about 500 billion baht (S$18.57 billion) tab.

Dr Napon said: “The rice pledging scheme was remembered as a policy catastrophe. It was criticised as a populist handout scheme in the beginning, that later evolved into a large-scale corruption scandal.

“It not only undermined fiscal discipline, but it also generated widespread backlash on the basis of corruption charges and attempts to cover up the corruption as well.”

Boonsong Teriyapirom, who served as commerce minister under Yingluck, was eventually sentenced to 48 years in jail over fake government-to-government deals in which stockpiled rice said to be sent to China was instead sold to Thai companies.

Unhappiness over the rice pledging scheme helped fuel opposition to the then Pheu Thai government, which was confronted with mass protests in 2014.

But the military-linked governments that came into power after that – burdened especially by the Covid-19 pandemic – struggled to deliver economic growth in line with Thailand’s neighbours.

Pheu Thai, now back as leader of Thailand’s coalition government, is anxious to deliver the economic results it promised during the 2023 election. It is facing growing questions with each delay of the 10,000-baht-per-person digital wallet giveaway – now slated to be launched in the fourth quarter of 2024 amid concerns over fiscal prudence.

Meanwhile, Mr Srettha has publicly appealed to the Bank of Thailand to lower the 2.5 per cent interest rate to stimulate business activity – to no avail.

Chiang Mai University political scientist Chanintorn Pensute said that the expectations are high for Pheu Thai because the party and its previous iterations had acquired a reputation for fulfilling campaign pledges swiftly. This was the case even for the rice-pledging scheme.

“Given that this government tends to do things very fast, people are wondering why the digital wallet plan is still stuck, and when the economy is going to recover,” she added.

Economists polled by Reuters said South-east Asia’s second largest economy likely grew 0.8 per cent from January to March 2024 compared with the same period a year ago, down from 1.7 per cent in the previous quarter.

Against this larger backdrop, Mr Phumtham’s high-profile bid to sell the remnant stockpiled rice appears like a curious detour, which Dr Chanintorn interprets as an attempt to wipe the slate clean to ease Yingluck’s return.

The writing, she said, is on the wall.

Thaksin is now free on parole, his jail term for corruption-related offences having been swiftly commuted after his return in August 2023.

The Supreme Court in March 2024 acquitted Yingluck of misallocating funds for a government project. In December 2023, the same court acquitted her of malfeasance over the 2011 transfer of a senior official.

With Pheu Thai and its allies now in control of the Lower House, “the target that was put on Yingluck’s back since 2014 has been removed”, said Dr Chanintorn.

However much dust Mr Phumtham’s rice auction stirs up, it will unlikely be enough to derail Yingluck’s return from exile.