Thailand's rice saga and fall of Yingluck Shinawatra

IT was simple maths for former businesswoman and prime minister of Thailand, Yingluck Shinawatra, to win the July 2011 election and lead the Pheu Thai Party: guarantee the procurement price of rice paddy for farmers at 15,000 baht (around US$450 or S$600) per tonne. This was 4,000 baht above the rate set by the previous Democrat Party and nearly double the global market price. Since almost 40 per cent of Thailand's labour force is in agriculture, the majority of whom are rice farmers, Yingluck sailed to victory and was sworn into office on Aug 10, 2011.

The strategy was a simplistic but unrealistic three-step process: buy rice from farmers at inflated prices, stockpile it to reduce global supply which would drive up global prices, and resell it later at a higher price to recover the initial outlay.

At the time, Thailand was the largest rice exporter in the world, controlling 30 per cent of the market. Yingluck thought this large market share was large enough to manipulate global prices. Whether it was naivety, political pandering, poor judgement, or likely a combination of all three, this plan backfired spectacularly as other countries, notably India and Vietnam, promptly filled the Thai void from the end of 2011 to 2013.