Rice Redux

For more than 50 years Thailand has been the world’s largest rice exporter. Now, thanks to the populist policies of Thaksin’s puppet government, it’s lost that position. That title now belongs to India, and by year end Vietnam’s rice exports will almost certainly have surpassed Thailand’s too.

It’s not difficult to understand why this has happened. Thai rice, thanks to the government’s rice mortgage scheme – a scheme designed to enrich the middlemen in the trade, not the farmers – costs as much as $170/tonne more than rice from competitor countries. Consequently exports have fallen almost 50% since last year, and the government now has 12 million tonnes of mortgaged rice in storage, progressively losing its taste, texture and value. The cost of this follow so far: 260 billion Baht (that’s 8.2 billion Yankee Dollars, or 5.3 billion Great British Pounds).

So, this is the cost of populist politics and politicians.

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