BAAC lends last loan to Sugar Fund
The Bank for Agriculture and Agricultural Cooperatives will lend Bt5.3 billion to the Sugar Cane and Sugar Fund, on conditions that cane farmers must raise their yield to over 9 tonnes per rai.
BAAC president Thirapong Tangthirasunan said this would be the last loan to the fund, which would use the money to subsidise sugar cane prices for the 2006-2007 harvest year.
"Other institutions would not lend the loan. BAAC is ready to help but this would be the last time, as the sugar industry has changed. Farmers not just grow sugar cane for sugar production, but the output could be used to produce ethanol. Farmers must raise yields to over 9 tonnes as they could not just harvest 9 tonnes for rai forever when other countries show advancement," Thirapong said.
The fund's debt burden is huge and government budget is used to partially settle the debts, Thirapong said.
According to BAAC, the fund has borrowed Bt24.6 billion from the bank. It is charged 50 basis points below the minimum lending rate, or at 5.5 per cent per annum.
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