Asia Times: Few takers for giant paddy silos


	July 5, 2000	atimes.com

Southeast Asia

Few takers for giant paddy silos
By Mahesh Uniyal

BANGKOK - Tillers and economists are joining forces to oppose the Thai government's plan to build $300 million silos to store surplus paddy produced by the world's biggest rice exporter.

Paddy farmers scoff at the government's claim that the proposed 66 bins, capable of holding 2 million tonnes of rice, will protect them from falling prices of the produce. Others worry that the scheme, to be funded with borrowed money, could delay Thailand's recovery from the effects of the 1997 economic crisis.

Political observers say the ruling coalition is more concerned about the effect of the decision on its chances in the national election scheduled later this year, than income security for rice farmers. Most of the proposed paddy silos, approved by a high-powered government panel, are to be located in constituencies that elected lawmakers belonging to a key alliance partner of Prime Minister Chuan Leekpai's coalition. The partner holds the agriculture portfolio.

However, few voters among the sizeable farming community in the mainly rural nation seem enthused by the decision that followed nationwide protests by paddy farmers against falling prices of their produce. Media commentators have described the proposal as ''an insult to the people'', and a ''white elephant project''. They have reminded the government of the failure of similar ventures in the past.

Eight of the silos are to be built in Suphan Buri province, some 120 kilometers northwest of Bangkok, where the government built four such storages in 1997. However, these silos with a storage capacity of 500 tonnes failed to check a slide in the market price of rice.

In Sam Chuk district in the province, paddy farmers had to shut down the storage facility as they could not afford the electricity and fuel bills for running machines to dry the grain before storing. ''We accepted it (the silo) because it was free. We were not aware of the high running costs. Had we continued using the silo we would have just accumulated more debt,'' a farmer was quoted as saying in front page newspaper reports from the region.

''Are they joking? People who want to build silos don't know anything about farmers' lives. We are living on loans. Who can wait for prices to go up while the interest is piling up everyday?'' said a woman farmer.

The government is also being criticized for using scarce government funds for a scheme that is seen to be of little use to its intended beneficiaries. According to Narong Petprasert of the Faculty of Economics of the prestigious Chulalongkorn University in Bangkok, the decision is ''not appropriate for the budget'' at a time when Thailand is burdened with a 3.3 trillion baht (about $85 billion) public debt. He expects the final cost of the silos to go up from the estimated 11.6 billion to 20 billion baht ($300 million to $512 million) . ''This means we will have to stop other (development) projects.''

Petprasert is worried that this may be done with funds borrowed from abroad when ''up to now, the (economic) crisis has not been remedied''.

''It seems to me that if we have to borrow money from abroad, we will be increasing the debt burden that is already 60 percent of the gross domestic product,'' he points out.

He advises the government to build smaller storage facilities and to renovate existing bins that were traditionally used by paddy farmers for holding their surplus.

Thai paddy farmers too want the government to spend the money on arranging for milling and transportation of their produce to markets - rather than building the silos. They would rather have the government cut prices of farm inputs like fertilizers, insecticides and fuel. According to farmers cooperatives in the provinces, the government should instead use the money to set up paddy-drying facilities and more rice warehouses. Dryers are needed to reduce moisture content in the second paddy crop that is harvested in the wet season. About 4 million of the 23 million tonnes of paddy grown annually is from the second harvest.

The paddy is processed to yield about half its weight in rice. Every year, Thailand exports some 6 million tonnes of rice, about half of the annual rice production.

A farmer is estimated to spend about 3,700 baht (nearly $100) in growing one tonne of paddy. A tonne of high-moisture paddy can lose up to 15 percent of its weight in drying. This year, the second crop paddy harvest fetched just 3,000 baht a tonne, leading to protests from the farmers.

The government argues that the silos would make it possible for farmers to store their surplus and sell it later when prices are higher. It has hired a public relations firm to take out advertisements in the regional press to inform farmers about the attractions of the project.

The decision, cleared by the Rice Policy Committee headed by Deputy Prime Minister Supachai Panitchpakdi, has drawn sharp reactions from the media. ''By giving its approval to such a wasteful project . . . the Rice Policy Committee has done the country a great disservice. It does not deserve our trust and confidence,'' said the English-language Bangkok Post in a recent editorial.

(Inter Press Service)

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