Thai govt sees losses in rice intervention scheme

BANGKOK (REUTERS) - Thailand's government expects losses of about 80 billion baht (S$3.2 billion) from its rice intervention scheme as of September 2012, the commerce minister said on Tuesday, a cost that may increase pressure on the state to scale back the programme.

The figure, cited by Commerce Minister Boonsong Teriyapirom, is equivalent to a fifth of the projected budget deficit of 400 billion baht in the fiscal year to end-September 2012. Mr Boonsong, however, gave no explanation of how the losses were calculated.

"There will be no profit at all because it is a policy to help farmers. However, we don't expect very big losses. It could be around 80 billion baht," Mr Boonsong told reporters.

Under the populist scheme, which was instrumental to bringing Prime Minister Yingluck Shinawatra to power last year, the government buys rice from farmers at 15,000 baht per tonne of paddy, well above the 9,000 baht per tonne quoted by traders.