Rice Exports and the Pledging Scheme

How Thailand became a top rice exporter, and how the 2011-14 rice pledging scheme paid farmers above-market prices, piled up stocks and cost billions of dollars.

Thailand has long been one of the world’s largest rice exporters.

Jasmine rice

Thai hom mali (jasmine) rice is prized worldwide.

The pledging scheme

In 2011, Prime Minister Yingluck Shinawatra’s government launched a rice pledging scheme.
The government bought rice from farmers at prices around 50 percent above market prices.

What went wrong

The government accumulated huge stockpiles it couldn’t sell without losses.
Thailand lost its position as the top rice exporter to India in 2012.
Losses were estimated at billions of dollars.
Stocks deteriorated in storage.

Aftermath

The scheme ended after a 2014 coup.
Yingluck was later convicted of negligence.

Lesson

Paying far above market prices creates surpluses and fiscal losses.

Comparison with India

India’s MSP procurement also builds large stocks, but at prices closer to costs.

The warehouse glut

Government warehouses filled with rice bought at high prices, which couldn't be exported without losses, while some rotted.

Thinking higher crop prices always help farmers sustainably

Thailand's scheme created unsellable stocks and big losses.

Key takeaways

Thailand is a major rice exporter.
The 2011-14 pledging scheme paid far above market prices.
Huge stocks and billions in losses followed.
India overtook Thailand as top exporter in 2012.