Thai Talk

Analysis and comments on political and current affairs
Permalink : http://blog.nationmultimedia.com/ThaiTalk

Monday , May 5 , 2008

They call us "Mekong (rice) Mafia"...those are strong words...

Posted by Yoon , Reader : 841 , 12:11:34

Thai PM Samak Sundaravej's idea to for a rice cartel among Mekong countries has drawn a strong editorial from the Philippine Inquirer whose editorial today comes under the headline: "Mekong mafia." Samak's proposal, the editorial says, is "deeply disturbing." The Thai premier's idea to form the Organization of Rice EXporting Countries (Orec), the Philippine newspaper says: "...tells us that Thailand, a close ally of the Philippines, and once a force for moderation in Southeast Asian, geopolitics, has succumbed to greed." The editorial added: "The cartel doesn't have to work, however; its very existence, during a worldwide rice crisis, will be enough to cause Thailand's reputation great damage..." What do you say, friends?

Thai PM Samak Sundaravej's idea to for a rice cartel among Mekong countries has drawn a strong editorial from the Philippine Inquirer whose editorial today comes under the headline: "Mekong mafia."

Samak's proposal, the editorial says, is "deeply disturbing."

The Thai premier's idea to form the Organization of Rice EXporting Countries (Orec), the Philippine newspaper says: "...tells us that Thailand, a close ally of the Philippines, and once a force for moderation in Southeast Asian, geopolitics, has succumbed to greed."

The editorial added: "The cartel doesn't have to work, however; its very existence, during a worldwide rice crisis, will be enough to cause Thailand's reputation great damage..."

What do you say, friends?

Post comment | send mail to friend

Read comment

comment 19
Obeyno1kinobe date : 07/05/2008 time : 12.44
http://blog.nationmultimedia.com/obeyno1

Idiotic timing. To raise this issue now as poor people around the globe struggle to keep up with rising food prices. PMS is a PR idiot.

But in principle, why shouldn't the major rice exporting countries co-ordinate. Some might say food is a basic neccesity for life, and if this results in higher food prices, that is immoral.

But this argument can be used selectively against all sorts of things. Is Biofuel immoral because it uses more land.

And the Philipines can't do anything about it, like they can't do anything about OPEC, other than moral arguments against deaf ears. How about lower oil prices for poor people/countries. Only ex Venesuala.

Greed and the market rules this world, for better or for worse.

What is the root cause of the high food prices. Oil prices in part. Maybe a reduction in supply due to poor harvests and switiching land use. But I guess the underlying cause is increased demand and changing consumption. Increasing population. Increasing income leading to more food consumption, and consumption of less efficient food such as meat.

Looking ahead, changes in global weather patterns may hit many food producing areas.

It is in every persons, and every countries interests to be responsible for meeting their own interests as the population grow and development seem long term trends (unless pandemic, global warming ctastrophe, nuclear war, economic melt down due to oil or GWor population unsustainability etc).

My view is rice importers are understandably upset at the prospect, but in the long run need to take responsibility to manage their own food needs (short term humanitarian assistence is fine, but it is not a solution)

comment 18
Ian date : 07/05/2008 time : 11.03
http://blog.nationmultimedia.com/anterian36

Dalmasian, I agree totally with your comments about water in Thailand. As I understand it, it will take up to 20 years for Thailand to implement an effective system, even if it had the will to do so.
I judge the health of a river's catchment area by the amount of particulates (soil) carried out to sea. Every river in Thailand is muddy brown, to me signs of rapid run off of surface waters from the spread of deforestation and the expansion of concrete. The end result, cycles of floods and droughts.

comment 17
wch date : 07/05/2008 time : 08.54

Foreign policy amateurs.

Another brilliant move to alienate a friendly regional neighbor.

That is right,
Noppadol does not speak to Surin.
I feel pang,
This kingdom has no day to weld together.
wch

comment 16
Dalmasian date : 06/05/2008 time : 21.51
http://blog.nationmultimedia.com/dalmasian

Ian, I agree 100% with you on the water availability issue. However, you are only looking at Thailand while I have a global perspective on thia issue.

Yes, Thailand is a major rice exporting country, but it is not the only rice exporting country. The situations in other countries must also be considered as well. If Thailand cannot or will not do a better job at their water management efforts then their rice rice production will fall back while other countries will be more than happy to take their place.

Look, Ian, I know the water resources management experts (both expats and locals) at the Asian Institute of Technology very well, and they have solutions to Thailand's water management problems since many years ago. It is not as though there is no solution to water irrigation and management issues. The problem lies in the proper planning and implementation of the necessary provisions to safeguard the water supply situation throughout the country. It is not something that can be done in one month on one year.

The whole country-wide water management system needs to be properly planned and designed and then diligently and meticulously excecuted over a period of years to bring about a marked improvement. It also need to be maintained very well to keep up with constant wear and tear.

With the constant change of government in this country and the unfocused efforts paid to the irrigation needs of the land, I just don't know when and how the country will be able to do the job right, or do it at all.

I have a mechanical, electrical, industrial and system engineering and management background and experience, and I do understand most of these concepts and their implementation. I also know full well that the skills and knowledge in this respect are available and should be taken advantaged of. But they are not.

If I sound very frustrated, I am. Thailand is rich in resources and should have been a very rich and powerful country by now, if only the country have the right leaders with the right vision and work hard and honestly to achieve the right goals and objectives for the country and the people. I am sorry to say it has wated all these time to crooked politicians and corrupt officials and business people.

-- Dalmasian

comment 15
Ian date : 06/05/2008 time : 19.29
http://blog.nationmultimedia.com/anterian36

Dalmasian, I normally agree with you but this time I cannot:-)
You wrote, "When demand goes up more than supply, prices tend to go up. Then, more land will be planted with rice the following season, increasing production and supply to satisfy the increased demand. As more supply comes to market, prices will tend to fall."

You make some basic assumptions that more land is available, that the water supply is unlimited and that there will be no crucial natural disasters causing crop failures.

Of these three factors water availability is increasingly becoming a major factor. To be more precise water management, currently there is often either too much (flooding) or too little (drought).

comment 14
Tawan date : 06/05/2008 time : 19.01
http://blog.nationmultimedia.com/tawan3

ADB short, medium and longterm recommendations.

What can/should governments do? Short-run, medium-run, and
long-run measures were examined above. First, shifting from costly
general subsidies to targeted safety net programs such as cash transfers
or food stamps, feeding programs for school children, and food-for-work
programs can be used in the short run, as can release of stocks to stabilize
prices. Closing the yield gap in Asia between low-productivity areas
and high-productivity areas in rice and wheat production by making
input supplies more reliable and providing credit at market interest
rates; freeing up trade; and avoiding protectionism are responses that
can work over the course of one year. Medium-term responses such as
improving institutional capacities and governance structures in Asia’s
rice economy, and investing in improved postharvest facilities are a
second route to a sustainable outcome. Finally, long-term investment
in education in rural areas, agricultural technology, and infrastructure
can elicit productivity gains and alleviate the trend of higher rice prices
and food prices in general.

comment 13
Tawan date : 06/05/2008 time : 19.00
http://blog.nationmultimedia.com/tawan3

Thai government policies in addition to floating a rice cartel so far 1. increase supply using reserves 2. build reserves/stockpiles 3. Increase imports/relax restrictions 4. price controls/consumer subsidies 5. actions against profitteers.

comment 12
Tawan date : 06/05/2008 time : 18.45
http://blog.nationmultimedia.com/tawan3

For increasing productivity in grains the EU and China would be a good model to follow.

comment 11
Dalmasian date : 06/05/2008 time : 17.50
http://blog.nationmultimedia.com/dalmasian

Quite frankly, the idea of a rice exporting nations cartel will mostly not be workable, even as I once toyed with the idea of OREC. Unlike oil, rice is a renewable commodity that cannot be kept in storage for a very long period of time. It has a "normal" price elasticity of demand.

When demand goes up more than supply, prices tend to go up. Then, more land will be planted with rice the following season, increasing production and supply to satisfy the increased demand. As more supply comes to market, prices will tend to fall.

After all is said and done, supply and demand economics will rule the roost of the rice market. The US and Australia both produce large quantities of rice with high productivity, and they will be able to upset any price fixing done by the "Mekong Mafia."

Thank you for your understanding of this simplistic economic theory from a simple-minded person or "thing," as someone calls me in this forum.

-- Dalmasian

comment 10
GGrass date : 06/05/2008 time : 16.24
http://blog.nationmultimedia.com/GGrass

Rice, along with oil, is war supply.

Why do you think there's war in the middle east? because they have oil.

If you can't defend it, don't piss off other people.

comment 9
Tawan date : 06/05/2008 time : 16.13
http://blog.nationmultimedia.com/tawan3

If there were any questions as to invest or not in Thai agriculture the Thai government should keep in focus to increase rice productivity as we are well below world yield average due to neglect.

comment 8
Patriot date : 06/05/2008 time : 14.44
http://blog.nationmultimedia.com/Patriot

Foreign policy amateurs.

Another brilliant move to alienate a friendly regional neighbor.

comment 7
Tawan date : 06/05/2008 time : 14.33
http://blog.nationmultimedia.com/tawan3

With 13% of world rice exports, will the US be asked to join Thailand's rice cartel?

comment 6
wch date : 06/05/2008 time : 08.34

Organization of Rice EXporting Countries - OREC,
or CARTEL or SYNDICATE or whatsoever,,,

When the interested participants are limitative and bargainable among, the cartel can function.

Rice is not in that category.
80% rice eating countries can instantly increase production by 20 -30 % within 140days.

The most affected group by the cartel is not OECD or OPEC nations, but the poorest nations that depend heavily on foreign aid.

Rather than re-blocking 'Mekong" or the like,
ASEAN is more efficient dialog block that can make negotiation with developed nations or UN's.
Through this mechanism, ASEAN can elevate their status as an important party.

Also sometime, hoping they can think 'over supply' and the demand of subsidy on idle paddy land, too,
as experienced in past.

Also, sometime, a critical thinking whether the world really faces foods crisis, too !.

Hoping they won't make it hostile to the world,
wch

comment 5
Tawan date : 06/05/2008 time : 08.25
http://blog.nationmultimedia.com/tawan3

Scrach the PR campaign idea the Minister of Finance already interviewed on Bloomberg to explain cartel and Thailand's rice policy.
The government is working.

comment 4
Tawan date : 06/05/2008 time : 06.52
http://blog.nationmultimedia.com/tawan3

It just needs a counter campaign if the government is serious. People just wonder with all the International help given to Thailand during the Tsunami Thailand should step up to help its neighbors in time of need.

comment 3
MakubeX date : 05/05/2008 time : 18.46
http://blog.nationmultimedia.com/babylon

Should we be surprised that this government came up with such a greedy idea?

Rice prices will probably continue to go up in the short-term, considering what has just happened in Burma but I don't think countries like China are going to sit down tamely and accept that they'll have to be dependent on imports for their food supplies for the forseeable future - least of all from a cartel.

Therefore, expect either interference from said powers or a drop in the prices in the long-term as the Chinese launch a campaign to switch to another diet.

comment 2
Tawan date : 05/05/2008 time : 15.12
http://blog.nationmultimedia.com/tawan3

I found the reaction from the US used the word float the idea no one takes it serious unlike oil rice farms are too small to consolidate. Anyway that was view from US press.

comment 1
Ian date : 05/05/2008 time : 13.23
http://blog.nationmultimedia.com/anterian36

I rather agree with the Philippines, the street cost of rice in Manila is double that of last year. Rice production is very dependent on water supply and this fluctuates a lot throughout Asia, sometimes too much sometimes too little. I think there should be mutual aid between ASEAN nations, a nation with a surplus one year should not make an excessive profit from a neighbour. Next year Thailand might have a poor crop and the Philippines a good one.

Comment

"If you are not member, please register to comment.
It take only a few steps."

member sign in | member register

name :
email :
website :
comment :

		back top

<<	May 2008					>>
s	m	t	w	t	f	s
				1	2	3
4	5	6	7	8	9	10
11	12	13	14	15	16	17
18	19	20	21	22	23	24
25	26	27	28	29	30	31