Updated: Rubber ain’t rice (or is it?)

14 01 2016

This is a tale of two commodities that have political connotations.

Rice, long a staple of the Thai diet and defining of basics like what food is and how it is eaten, has been associated with the political parties of Thaksin and Yingluck Shinawatra, their political bases in the north, northeast and central regions. Rice farmers were once consider the backbone of the nation. They have long been exploited and whatever way you look at it, poverty data show that being a smallholder or tenant rice farmer in the regions mentioned is not a bad indicator of the likelihood of a family living in poverty.

Rubber has long been associated with the farmers of the mid-south. On average, the poverty data shows that farming in this region has produced higher than average incomes. The Democrat Party has, in recent years, dominated the region, aided by organizers like the godfather figures like Suthep Thaugsuban. People from the region were the backbone (and muscle) of Suthep’s People’s Democratic Reform Committee.

General Prayuth Chan-ocha led his 2014 military coup in part based on a setiment that the the Puea Thai Party government’s rice subsidy scheme was “corrupt.” Indeed, the courts are still dealing with a case that could see Yingluck jailed and fined a huge amount of money.

Now that rubber prices have plummeted and southerners are becoming agitated, how does The Dictator respond?

A Bangkok Post report a few days ago reported rubber growers calling on Prayuth “to invoke Section 44 of the interim charter to speed up the release of 300,000 tonnes of stockpiled state rubber to build roads.”

It seems Article 44 is considered a miracle political drug. It can be used to bail out political allies.

The Rubber Growers Federation of Thailand asked for still more: “speeding up the disbursement of a 12-billion-baht assistance fund to support rubber farmers suffering from tumbling prices and helping promote rubber processing.” Essentially, the “rubber growers want the government to intervene and maintain rubber prices in addition to the financial subsidy programme.”

Initially, The Dictator brushed these calls aside, crying poor. The Bangkok Post reported that Prayuth “vowed … to stand firm against growing pressure from rubber growers demanding government intervention to stem falling rubber prices as farmers threatened a protest…”.

Protest?! That’s a red rag to a military bull: “He warned farmers to brace for legal consequences if they stage a protest.”

The Bangkok Post reports that rubber farmers weren’t taking a backward step, threatening not just a major rally but a hunger strike. Sounding very PDRC, one leader declared that “the hunger strike will continue until we achieve victory…”. The junta was warned: “If the government ignores … demands, the network will discuss the possibility of raising the pressure to a higher level…”.

In the same report, junta spokesperson Maj Gen Sansern Kaewkamnerd said The Dictator “has ordered eight ministries — Transport, Interior, Education, Public Health, Defence, Industry, Commerce and Agriculture — to use their own budgets to buy rubber to boost domestic use of the product.”

A Prachatai report disclosed that the military had then “summoned the leaders of southern rubber farmers…”. That means they required “attitude adjustment.” Some 50 leaders were required to report. The military thugs demanded that the farmers not rally.

The Dictator was losing patience and was quoted as blaring: “Where are we going to find money to lift [the price], answer! If you want me to lift [the price] like this then go find me the money…”.

He was responding to Suthep who “suggested that the government should concede to the rubber farmers’ demand and subsidize rubber at 60 baht per kilogramme.”

Suthep was taking a backward step either. He declared: “This is not an elected government…. It arose from special circumstances and this is the time to exercise its special power to help people.” Anti-democrats do love dictatorships but Prayuth took up the challenge huffing and puffing: “Where’s the money? We’re building a new system. You don’t want a system, do you? You want the government to intervene in every crop, do you? Get me the money.” Suthep was warned not to join the rally by farmers.

For good measure Prayuth threatened farmers: “I’ll keep doing my job. Just don’t cause trouble…”.

All that threat and bluster then disappeared. The Bangkok Post reported that the “government has agreed to buy 100,000 tonnes of all types of rubber products directly from growers at an above-market price in an attempt to ease pressure on rubber farmers.” And on the junta from a group that feels it is owed some payback for it political support.

Pointedly, Prayuth did not “reveal the purchase price but said it would be higher than the current 35 baht a kilogramme for latex.” So the cost is unknown.

More assistance to rubber growers is planned, and set out in the article. The state is putting aside a budget of at least 12 billion baht. The real cost is likely to be several times this amount especially if the market price stays low.

That’s quite a payment for PDRC and southern political support. Remember all the claims about rice and policy corruption? Yingluck must be watching with considerable interest.

Update: Remember when the PDRC violently campaigned against state banks funding subsidies to rice farmers? According to the Bangkok Post, there are no such qualms or barriers for pretty much the same proces shoveling funds to rubber growers. It reports that the “Finance Ministry has given two state-controlled banks approval to extend a 4.5 billion-baht interest-free loan to the Public Warehouse Organization (PWO) to buy 100,000 tonnes of rubber in an effort to shore up the commodity’s sinking price… The Government Savings Bank (GSB) and the Bank for Agriculture and Agricultural Cooperatives (BAAC) will be the loan’s sponsors.” The subsidy scheme awaits approval by the junta’s cabinet.


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[…] “innovations” such as rural subsidies that can’t possibly be populist, buying up rubber as if it were rice (yes, Thaksin had a rice price support program) and a revised one tambon, one product (OTOP) […]

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More Thaksinism | Political Prisoners of Thailand

[…] “innovations” such as rural subsidies that can’t possibly be populist, buying up rubber as if it were rice (yes, Thaksin had a rice price support program) and a revised one tambon, one product (OTOP) […]