Moody, a ratings agency, warned Thailand of the risk "populist measures" would have on government finances. His warning soon proved true. Losses from the country's multi-dollar program reached US$4.4 billion for the crop year ending September 2012.

The multi-dollar program also caused a big dent in the government's budget. For the current fiscal year, the Thai budget was already running at a deficit of THB300 billion (US$9.59 billion).

According to traders, the program offered US$480 per ton of unmilled rice to farmers. Thai's open market and Vietnam priced milled rice at lower prices at US$475 and US$400 per ton, respectively.

Thailand has stocks of rice worth two times a normal year's exports and almost half of the 38-million-ton annual global trade. For now, these stocks were not being sold as selling them would only result in a loss.