The Bank for Agriculture and Agricultural Cooperatives plans to set aside Bt40 billion for loans to help farmers plant the 2014-15 rice crop, which typically sees high output of about 20 million tonnes but low market prices.
Farmers will be allowed to obtain loans from |the BAAC by using their rice output as collateral |at 80 per cent of the market price. Credit lines |will not exceed Bt300,000 for each loan applicant.
The interest rate is being considered, and if approved by the military’s ruling National Council for Peace and Order (NCPO), the farmers would not have to pay interest for four months, BAAC managing director Luck Wajananawat said.
In addition, the BAAC will allocate Bt208 million to help 1,613 farmers who still have not collected their overdue rice-subsidy payments because of problems with the required documents.
Meanwhile, a total of 1.67 million farmers will be paid today under the rice-pledging scheme. The payments will total Bt195.45 billion for 11.8 million tonnes of rice, the bank said.
Luck said paying off all the farmers should stimulate economic growth by at least 0.2 percentage point this year.
"Farmers will spend money for paying their debts, investing for new crops, and spending for their households. Money will be circulated in the economy," he said.
The payments have been reaching farmers faster than the bank previously expected, and should complete by this Sunday. June 22.
Luck said that the BAAC could close the account for farmers under the pledging scheme on June 18 today because it had accelerated payments after they had waited for many months.
After the NCPO allowed bridge loans, the BAAC was easily able to get funds to pay the farmers.
According to the bank, starting from May 25, the bank was able to pay Bt89.98 billion to 838,538 farmers who had participated in the rice-pledging project.