Thai government to end rice subsidy

Thailand’s Commerce Ministry announced on Wednesday that a rice subsidy scheme for farmers would expire at the end of February. The government of Prime Minister Yingluck Shinawatra, which is in caretaker mode, has no power to continue to fund its “flagship” policy, which has bought rice from farmers for up to 50 percent above market rates since 2011. Almost four million families reportedly depend on the scheme—a crucial social base for Yingluck’s Puea Thai Party.

The announcement comes amid ongoing anti-government protests led by the so-called People’s Democratic Reform Committee (PDRC), which disrupted the February 2 election, preventing some six million people from voting. Hundreds of rice farmers have also protested in Bangkok in recent weeks over the government’s failure to pay $3.7 billion owed for their recent harvest.

On Friday, police dismantled two protest rally sites outside Government House, which have been occupied since November by groups allied to the PDRC. Police previously refused to intervene to stop protesters disrupting the election. Despite 130,000 officers being deployed on February 2, polling booths were shut down by protesters in 11 percent of the country.

Make-up rounds of voting will not be organised by the Electoral Commission until late April, and it is likely to be months before results are finalised and a new government can take office. Meanwhile, the caretaker Puea Thai Party government’s hold on power remains tenuous.

Yingluck dissolved parliament in December and called an early election in an attempt to shore up her rule, after the opposition Democrat Party resigned en masse from parliament to join the PDRC’s campaign.

The three-month long protests reflect deep divisions within the Thai ruling elite. The PDRC and Democrats draw their support mainly from Bangkok’s middle class, as well as southern Democrat strongholds. They represent the interests of the traditional elite, including monarchists, military commanders and sections of the state bureaucracy, who are deeply hostile to Yingluck and her brother, former Prime Minister Thaksin Shinawatra, who was ousted in a military coup in 2006.

The PDRC has called for the government to be replaced by an unelected “people’s council”—essentially a front for a military junta—which would scrap the Yingluck government’s “populist” policies, including the rice subsidy and cheap healthcare. Commerce Minister Niwatthamrong reportedly told farmers’ groups last week that the government had tried to borrow money to pay them but had been refused by several commercial banks.

The rice scheme, which has accumulated losses of about $2 billion per year, has been heavily criticised in business circles, including by the International Monetary Fund. Last June, Yingluck’s cabinet tried to appease business by cutting the subsidy by 20 percent, but backed down after a backlash from farmers.

Powerful sections of big business are aiding this anti-democratic campaign. The media this week published a list of alleged funders of the PDRC—apparently leaked by the government. These include several hotels; Pramon Suteewong, president of Toyota in Thailand; and the Saha Group, the country’s largest consumer products conglomerate. Pramon and a spokesman for Saha denied any involvement.

While attendance at the PDRC’s protests is reportedly dwindling, the government faces threats to its rule on several legal fronts. The Democrats boycotted the election and have appealed to the Constitution Court to nullify it. On Wednesday the court rejected the Democrats’ petition but party leader Abhisit Vejjajiva said their legal action would continue.

Democrat lawyer Wiratana Kalayasiri told the Nation that the ballot could still be challenged on the grounds that millions of people could not vote and candidate registration was disrupted—as a result of the PDRC’s protests, which the Democrats supported. An election in 2006 was nullified for similar reasons, paving the way for the army to overthrow Thaksin’s government.

According to a poll published yesterday in the Bangkok Post, 49 percent of state officials support the PDRC’s protests and 57 percent want Yingluck to step down in favour of a “neutral” administration. The opposition’s backers include sections of the judiciary.

The National Anti-Corruption Commission (NACC) announced on Tuesday that it expected to lay charges against Yingluck later this month for “dereliction of duty” over the failure to prevent losses linked to the rice subsidy scheme. If the NACC decides to indict Yingluck and take the case to court she would be required to stand down from politics.

The NACC has also accused hundreds of Puea Thai Party lawmakers of breaking the law by attempting to change the constitution to make the Senate a fully elected body.

While the government’s Centre for Maintaining Peace and Order has issued arrest warrants for 19 PDRC leaders, so far only one has been arrested: Sonthiyarn Chuenruethai-naitham, owner and director of T-news agency. The New York Times reported that Sonthiyarn “has been described by the Thai media as an adviser to the Crown Property Bureau, the agency that manages the massive royal fortune.”

Sonthiyarn was held for only three days before a court ordered his release on Thursday.

On the same day, the Criminal Court refused to issue arrest warrants for three gunmen who police allegedly fired on pro-government Red Shirt protesters in Lak Si the day before the election. Police had reportedly supplied photos which identified the suspects, including two security guards working for the PDRC.

Army Chief General Prayuth Chan-ocha stated on Thursday that the army would remain “neutral” but he again told reporters: “If any side uses weapons and the other side reacts, violence will increase and security forces will have to intervene.” Prayuth refused to publicly support the election, and the military high command clearly sympathises with the PDRC.

Underlying the political deadlock is a rapidly deteriorating economy. On Monday, the Nation reported that several banks and financial agencies have predicted the country’s growth for 2014 could drop below 3 percent—compared to 6.5 percent in 2012—if the impasse is not resolved. The Yingluck government and opposition, notwithstanding their mutual hostility, are united in their desire to impose the economic crisis on the working class and rural poor through austerity measures.