Thai graft body to probe rice subsidies, adding to PM's woes

by Reuters
Thursday, 16 January 2014 10:51 GMT

Prices of different types of rice offered for sale are displayed at a market in central Bangkok, July 26, 2013 REUTERS/Athit Perawongmetha

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* Protesters reject snap election, want government out now

* Their main aim is to eradicate influence of ex-PM Thaksin

* PM Yingluck says protests running out of steam

* Finance minister says disruption will cut GDP growth

By Apornrath Phoonphongphiphat

BANGKOK, Jan 16 (Reuters) - A Thai anti-corruption agency said on Thursday it would investigate a money-guzzling rice subsidy programme that has fuelled opposition to Prime Minister Yingluck Shinawatra, as protesters marched through the capital demanding she resign.

The unrest flared in November and escalated this week when demonstrators led by former opposition politician Suthep Thaugsuban occupied main intersections of the capital, Bangkok.

The turmoil is the latest episode in an eight-year conflict that pits Bangkok's middle class and royalist establishment against the mostly poorer, rural supporters of Yingluck and her brother, former premier Thaksin Shinawatra.

Yingluck was helped to power in 2011 by offering to buy rice way above the market price to help poor farmers.

Critics say corruption is rife in the scheme and - a particular gripe of well-heeled protesters - that it has cost taxpayers as much as 425 billion baht ($12.9 billion), although that figure would drop if the government managed to find buyers for the rice in state stockpiles.

"Those who oversaw the scheme knew there were losses but did not put a stop to it," Vicha Mahakhun, of the National Anti-Corruption Commission (NACC), told a news conference.

Yingluck is nominally head of the National Rice Committee and could therefore eventually face charges.

In a separate ruling, the NACC said it had grave doubts about government-to-government deals announced by former Commerce Minister Boonsong Teriyapirome.

"The government rice deals did not happen because rice was not shipped out of the country as they claimed," Vicha said.

Exporters raised the same question at the time and Boonsong was sacked by Yingluck in June 2013 when he failed to answer public concerns about the deals and the cost of the intervention programme.

In its manifesto for the 2011 election, Yingluck's Puea Thai Party promised farmers a price for their grain that was way above the market price. That made their rice so expensive Thailand lost its position as the world's top exporter to India.

Thaksin's rural and working-class support has ensured he or his allies have won every election since 2001 and Puea Thai seems certain to win an early election she has called for February.

The anti-government protesters in Bangkok have rejected the election.

They want to suspend what they say is a fragile democracy destabilised by Thaksin, whom they accuse of nepotism and corruption. They want to eradicate the political influence of his family by altering electoral arrangements in ways they have not spelt out, along with other political reforms.

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