BANGKOK (AP) — Thailand's government on Tuesday acknowledged losing more than $4.46 billion in one year in a much-criticized scheme to support rice prices that ended up dislodging the country from its spot as the grain's top exporter. The program is likely to be amended to reduce the losses, the commerce minister said.

Prime Minister's Office Minister Warathep Rattanakorn said government sales of rice it purchased from farmers fell far short of the sum it paid to the farmers under the 2011-12 subsidy program, accounting for the loss. The government had been criticized for refusing to disclose the losses and the amount of rice it has been forced to stockpile.

Under the scheme, the government buys rice from farmers at about $490 a ton, hundreds of dollars more than the market price. Its inability to resell much of it on the international market allowed India and Vietnam to surpass Thailand in the value of their rice exports.

The government's National Rice Policy Committee announced plans on Monday to lower the payments to farmers.

Commerce Minister Boonsong Teriyapirom said the Cabinet is expected to approve the planned change and it is likely to take effect June 30.

"The adjustments will show that even though the government is trying to implement several policies that benefit the people, it is also adhering to fiscal discipline," he said.

Prime Minister Yingluck Shinawatra said the government will attempt to reduce its losses by cutting expenses but also strive to maintain farmers' incomes.

Subsidies for rice farmers were launched in 2004 when Yingluck's brother, Thaksin Shinawatra, was prime minister and implemented a host of populist policies. The scheme was criticized then for alleged graft and high costs, and Thaksin was ousted by a military coup in 2006 after protests in the capital against his alleged corruption and abuse of power.

The scheme was revived by Yingluck as a flagship policy in her 2011 election campaign.

She implemented the program in October 2011, with no limits on the amount of rice the government would purchase. So far, the government has bought 35.2 million tons of rice, paying farmers more than $11 billion, while earning $1.9 billion by reselling some, Warathep said.

The project's expenses also include its administration through the government-owned agricultural bank and costs of storing the rice in warehouses, totaling $482 million.

"In terms of accountancy, it might be called losses," Yingluck said. But she said the losses actually meant gains for Thai farmers who have benefited from the scheme.

MAGGIE MICHAEL

Associated Press


IBSHAWAI, Egypt - Early in Egypt's wheat harvest this year, President Mohammed Morsi spoke in a televised address, proclaiming the crop would be 30 percent higher than the year before and that the country is on track to go from being the world's biggest importer of wheat to being entirely self-sufficient in four years.

MAGGIE MICHAEL

Associated Press

IBSHAWAI, Egypt - Early in Egypt's wheat harvest this year, President Mohammed Morsi spoke in a televised address, proclaiming the crop would be 30 percent higher than the year before and that the country is on track to go from being the world's biggest importer of wheat to being entirely self-sufficient in four years.

They also say Morsi's government has left untouched a cycle of corruption in agriculture policies that help black markets thrive and feeds the hardships of farmers struggling with irrigation water shortages and increasing prices of fuel and fertilizers.

As a result, bread has become mired in Egypt's politics as Morsi nears the end of the first year in office. In recent months, Egypt has faced fuel shortages, water and electricity cuts and rising food prices, raising an outcry from Morsi's opponents that he and his Islamist supporters are mismanaging the country. In a country where at least 40 percent of the population of 90 million lives near or below the poverty line, millions rely on cheap bread subsidized by the government.

"Self-sufficiency? Are you fooling me? Or are we fooling ourselves?" said Ahmed el-Shafaie, who heads a local government agriculture association in Khadiya village in the Ibshawai farming district south of Cairo. He dismissed Morsi's claim's of a dramatic jump in productions, saying yields have grown at their usual rate of around one or two percent.

"So what is new here, for God's sake?" he said.

Morsi and his Muslim Brotherhood have proclaimed the harvest as a victory for his government's policies.

In his speech last month in a field of golden wheat outside Alexandria, Morsi announced a leap in wheat production and called it a result of the farmer's "sweat and labor" and their faith, citing a verse from the Quran: "If the people of the village are faithful and fear God, We will open the blessings of heaven and earth."

Supply Minister Bassem Ouda this week said his ministry has collected enough domestic wheat to cover the needs of the subsidized bread system up to the beginning of December. The ministry — which buys wheat for use in the subsidized bread program — promised higher pay for farmers to grow wheat and provided fertilizers and seeds to encourage an increase in production.

Some experts and farmers said the claims were politicized.

"It is not the production that is unprecedented, it is the exaggerations and the lies ... There is no transparency and there is only deception," said agriculture professor Nader Nour Eddin, who worked as an adviser to the Supply Ministry in 2005.

"The president is campaigning for his party," he said.

Morsi in his speech said this year's harvest will reach 9.5 million tons, an increase of 30 percent over last year, when he said the total was 7.5 million tons.

But the government's own statistics agency has put the 2012 crop at 8.7 million, meaning that if the harvest does reach the prediction, the increase would be just under 10 percent, a slightly larger rate than previous years' reported growth.

But there are doubts even the 9.5 million figure can be reached. A report by the U.S. Agricultural Department said predicted Egypt's production this year at about 8.7 million tons.

Abu Bakr Abu Warda, deputy head of the Corps Institute at Egypt's Agriculture Ministry, told The Associated Press on Monday that the real figure is likely to be even lower, between 8 to 8.5 million, based on the amount of land believed to have been planted with wheat and the average yield. The harvest ends this month, and he said an official figure is not yet out as the ministry accumulates the data.

A spokesman for the Agriculture Ministry did not respond to repeated calls from the AP seeking comment.

Egypt consumes about 15-18 million tons of wheat a year, usually importing anywhere from 8-11 million tons of that sum. About 9 million tons of that is procured by the government for subsidized bread.

Nour Eddin warned that exaggerated reports of the harvest sends "false messages to the state treasurer that we don't need you to secure needed funds to import wheat from abroad because we are able to cover internal demand."

As a result, when supplies run out later, the state "will be forced to buy more than one shipment at a time, which will lead to increase of international prices of wheat and it will also mean that we will be forced to buy any wheat, even low quality."

The government has cut back on wheat imports to save shrinking currency reserves. Egypt's foreign reserves, which stood at $36 billion on the eve of the 2011 revolution, dropped to a critical low of $16 billion at the end of May, which many experts reported to be barely enough to cover three months of imports.

In the next fiscal year, starting in July, the state intends to reduce its imports for the subsidized bread program to 4.5 million tons, from 5.3 million this past year, contending it can rely more on local production.

"Some people have been talking that Egypt won't be able to cover its needs for wheat. Thanks be to God, we can say that is just baseless rumor," Ouda said in an interview on Egypt's Al-Hayat television this week.

Farmers, meanwhile, have a catalog of complaints over mounting prices and dysfunctions in the system.

Many farmers, for example, over-report to the government how much land they're dedicating to wheat to get additional state-subsidized fertilizers, which they sell on the black market. That drives fertilizer prices up for others and makes it difficult to predict how much land actually is planted with wheat. Bribery to local officials who distribute seeds and fertilizers and oversee the harvest is rife.

Amid Egypt's security breakdown, theft of irrigation water has increased. Ramadan el-Sayyed, a farmer in Serour village, says he never gets his full allotment of irrigation because other villagers take his share, forcing him to buy water from elsewhere for a higher price.

Farmers have also been hit hard by shortages of diesel fuel used in harvesting machines and transport of the harvest. With shortages, machine operators must turn to the black market for fuel, increasing their costs.

Moneir Ahmed Abdel-Wahid, who runs a harvester, says he has to charge farmers the equivalent of $9 an hour, double the price of last year because he has to buy black market fuel.

One farmer, Abdel-Wahab Beshihi Ali, said his yield and his earnings have stayed the same. "Don't believe what they say," he said of claims of an increase.

"The farmers are in the worst situation," he said. "I don't care who is ruling. Even if it is a woman, I don't care. I only want to feed my children and achieve self-sufficiency for myself."