Rice-pledging plan

Rice pledging was introduced more than 30 years ago to help cash-strapped Thai farmers.

In theory, the farmers would "pledge" their padi with the government at a certain price when the harvest season began - when surplus stock depressed prices - and then redeem it for sale on the open market at the season's end, when prices surged.

The Puea Thai party-led government, however, offered farmers some 50 per cent above the market price and put no limit on how much padi it would buy.

Farmers ramped up production, leaving state warehouses with some 18 million tonnes of padi by the time the government was ousted by a coup in 2014.

Thailand lost its position as a top rice exporter after Thai commercial exporters found they could not match the government's prices.

Critics say the rice-pledging scheme was also riddled with corruption.

A version of this article appeared in the print edition of The Straits Times on August 25, 2017, with the headline 'Rice-pledging plan'. Print Edition | Subscribe