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Thai red-shirt heartland backs government despite rice fiasco

By Amy Sawitta Lefevre

CHAIWAN, Thailand (Reuters) - Rice farmer Thiwakorn Chomchan hasn't been paid in 2 months, but he is not angry with Thai Prime Minister Yingluck Shinawatra, whose flagship policy is meant to guarantee him an above-market price. Instead, he blames anti-government protesters in Bangkok.

"Some farmers in the north and northeast of the country who are part of the rice scheme are not upset. They know the government has its hands tied," said Thiwakorn, 51.

Elsewhere across Thailand thousands of farmers, many of whom are owed 4 months' pay, are demonstrating against the multi-billion dollar scheme they say is riddled with corruption and have threatened to join the protests disrupting the capital.

In the northeastern heartland of Yingluck's Puea Thai Party and her brother, ousted former Prime Minister Thaksin Shinawatra, nobody is switching sides.

A meeting convened by Thiwakorn around a smoky fire in Chaiwan, a district in the northeastern province of Udon Thani, captured the mood: the 20 assembled farmers decided unanimously that they would not be joining the demonstrations.

"We're loyal people. We have faith in the government's policies," said Sunanta Wimasee, who owns 9 rai of rice fields.

The rock solid support of the poorer but populous north almost certainly guarantees Yingluck will win a February 2 election if legal challenges escalating violence do not force its postponement.

But the erosion of rural support elsewhere leaves her increasingly reliant on the electoral bastion built by Thaksin - further polarizing an already deeply divided country where a protest movement based in Bangkok and the more prosperous south is determined to drive her from office.

ESCALATING TENSIONS

The protests are the latest chapter in an 8-year conflict that broadly pits the Bangkok-based middle class against the mainly poorer supporters of Yingluck and Thaksin, who was toppled by the military in 2006.

Ten people have been killed since the protests began in November. In a sign tensions are escalating, an anti-government protest leader was shot and killed in Bangkok on Sunday as demonstrators blocked polling stations set up for early voting.

Last Wednesday, Kwanchai Praipana, an outspoken leader of the pro-government "red shirt" movement, was seriously injured after an unidentified gunman opened fire as he sat reading a newspaper on his front porch.

Just a day earlier, he had told Reuters a nationwide "fight" would ensue if the military launched another coup.

"We won't accept them seizing power, if we need to divide the country then we will," Kwanchai, who leads thousands of red-shirted supporters in Udon Thani. "We won't send people to Bangkok to fight empty-handed."

REALLY MAD"

Thailand's central plains, the country's main rice-growing region, have traditionally been up for grabs at election time, with no party dominating and constituencies keenly contested.

In 2011, voters there helped Yingluck sweep to power after she promised to kick-start the rice intervention scheme. Out of the 265 seats won by Yingluck's party in 2011, more than 39 percent were from northeast, while 15 percent came from the central "swing" region.

The rice policy, however, has been a fiasco, with losses of 136 billion baht ($4.14 billion) in the 2011-2012 crop year. Critics of the scheme, including former Central Bank Governor and Finance Minister Pridiyathorn Devakula recently estimated the total at 425 billion baht ($12.93 billion).

As financing strains mount on what has been a centerpiece of the government's program, unpaid farmers are getting angry.

"The government took our rice and they haven't paid us and those poor farmers can barely make a living," Prasit Boonchoy, head of the Thai Farmers Association, told Reuters, adding that more than 10,000 farmers would march to Bangkok.

Over the past week protesting farmers in 26 of the country's 76 provinces blocked major roads demanding compensation.

"Almost everyone in the northeast has been paid because they've already harvested their rice. Elsewhere that's not the case," said Nipon Poapongsakorn from the Thailand Development Research Institute.

"It's life and death for them and the farmers that are protesting now are really mad. The government will certainly lose a few farmers' votes in the next election."

Unlike in "Isaan", as the northeast region of the country is called, provinces in central Thailand are well-irrigated. Farmers there can grow rice as much as three times a year.

But a long dry season in northeastern Thailand means farmers harvest rice once a year and diversify by growing other crops including sugar-cane, rubber and cassava.

POPULIST POLICIES

Thaksin, who lives in Dubai to avoid a corruption sentence handed down in his absence in 2008, remains a hero to many in the mostly poor, rural north and northeast for his big-spending populist policies, including free healthcare and cheap loans.

In interviews with Reuters, farmers in Udon Thani blamed the protesters in Bangkok for delayed payments for their rice.

Donning a green cap with a five-pointed red star as he erected campaign signs for Yingluck's Puea Thai Party, Thongpoon Promying, 61, said the government's critics were deliberately discrediting the scheme.

"It isn't the government's fault," said Thongpoon, a former member of the Thai Communist Party.

"There's money but the farmers' bank is playing politics. They call themselves a bank for grassroots people but they bend to the will of the elite," he added, referring to the state-owned Bank for Agriculture and Agricultural Cooperatives

(BAAC).

Under the scheme, the government uses loans from the BAAC to fund the purchases, and is supposed to repay the loans by selling rice on the world market.

The bank's labour union has threatened an investigation against the government if it continues to use its reserves to pay farmers. Many of the bank's clients, fearing their savings will be used to pay off the scheme, have withdrawn their money.

FLAWED SCHEME

Prasert Satitthammanit, owner of "Udorn Permsin" rice mill in Udon Thani, admits the scheme is flawed.

"It's the government's fault. The policy is fine, it's the way officials execute it. It should be first in, first out. They shouldn't leave rice to rot over three years," said Prasert.

Thailand now sits on stockpiles of 18 million tons, almost double a normal year's exports and nearly half of annual global trade of 38 million tons, and has had little success in offloading its mountains. The government has even resorted to storing rice in airport hangars.

The anti-corruption agency says it will investigate allegations Yingluck was negligent in her role as head of the National Rice Policy Committee. She could eventually face charges and be banned from public office.

Bangkok's protesters have urged farmers to join them - but the offer finds few takers 450 km (280 miles) away in Udon Thani.

"The protesters are stunting the country's growth," said farmer Somboon Pansa, 61. "This is the old way of thinking... keep the power in Bangkok and keep us poor."

($1 = 32.8800 Thai baht)

(This version of the story corrects second dollar conversion figure in paragraph 16)

(Additional reporting by Apornrath Phoonphongphiphat and Panarat Thepgumpanat; Editing by Alex Richardson)

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