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While farmers' incomes jumped when prices of farm products rose sharply early this year, the situation has now reversed, with farm prices plunging along with that of crude oil.

Crudeoil prices have plummeted because fears of a global recession fear have affected demand for oil.

"We're concerned about debt repayment that will be due in December and March," acting president Ennoo Suesuwan said yesterday.

Farmers may buy goods on credit when prices of rice, rubber and other farm products are rising and run into financial trouble when prices drop, said Ennoo.

The prospect is also bleak, due to the threat of a sharp global economic slowdown next year.

"We cannot rely on the export market, as our competitors, such as Vietnam, recently cut their rice price sharply," said Ennoo.

The BAAC has sent its staff to meet farmers and advise them on how to cope with the fastchanging environment. If they cannot repay their debt, the bank will undertake debt restructuring for them, he said.

In the past six months of its fiscal year (April to September), the bank lent farmers Bt183.8 billion, exceeding its target by 80 per cent.

The surge in lending has largely been driven by the government policy to boost the economy at the grassroots level, Ennoo said. With the government continuing to direct stateowned banks to lend more, the BAAC plans to lend more than Bt100 billion in the present fiscal year.

The bank has also provided financial support for the government's priceintervention scheme, in order to shore up farmproduct prices. At the latest rice pledging, the government is guaranteeing a price of Bt12,000 a tonne for paddy rice.

In the past six months, the BAAC has mobilised deposits worth Bt10.38 billion. It plans to raise more by launching lottery savings products. Next month, the bank will issue lottery deposits, with each unit worth Bt100 at interest of 1.5 per cent for a threeyear deposit. Each unit could also win a lottery, with a first prize of Bt1 million and total prizes worth Bt13.25 million.