Thailand's embattled government today defended a much-criticised rice subsidy scheme after a Chinese firm cancelled a one million tonne order for stockpiled grain, following a graft probe into Thai officials.
The populist scheme, which paid farmers above market rates for rice, has become a lightning rod for anger among anti-government protesters who say it has engendered widespread graft, punched a hole in Thai public finances and dislodged the kingdom from its position as the world's top rice exporter.
Disrupted elections last Sunday have failed to ease the pressure on Prime Minister Yingluck Shinawatra, with experts saying a series of legal moves -- including one over the rice policy -- threaten to erode her authority and potentially bring down her government.
The collapse of the Chinese deal was announced by Thailand's Commerce Ministry yesterday following charges by the kingdom's anti-graft body against Thai officials including a former minister.
Defending the rice scheme, Yingluck told reporters today that "everyone is trying to help farmers".
Rice farmers from the central provinces have threatened to march on the commerce ministry in Bangkok tomorrow in protest at lack of payment for the crops they pledged to the scheme.
"The government was trying its best to keep its monetary discipline... We all sympathise with the farmers who suffer (from late payments)," Yingluck said.
Current Commerce Minister Niwatthamrong Boonsongpaisal tried to calm fears Thailand is unable to shift its vast rice stockpile -- estimated at nearly 20 million tonnes -- saying a separate deal with the Chinese government still stands.
"The contract for one million tonnes is separate and they (China) said they will still buy Thai rice," he told AFP, adding the government will soon auction off another 400,000 tonnes of its rice inventory.
