Urgent funding sought for farmers

Economy February 25, 2014 00:00


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THE NATIONAL Rice Policy Committee will today ask the Cabinet to allocate Bt10 billion to Bt20 billion from the central budget as an urgent measure to help farmers owed payments under the rice-pledging programme.

“The committee will further seek approval from the Election Commission if the Cabinet gives the nod,” caretaker Commerce Minister Niwatthumrong Boonsongpaisan said yesterday after chairing a meeting of the committee. 
The committee also accepted that because of the government’s caretaker role, it could not proceed with the rice-pledging project for the second-crop rice season beginning in June, which could affect farmers’ incomes.
Niwatthumrong said the committee agreed to ask for a special budget from the Cabinet to help farmers in the short term, while the government would accelerate rice sales to raise more money for them.
For each of the four months from last October to January this year, the Commerce Ministry was able to return an average Bt8 billion to the Finance Ministry after selling about a million tonnes of rice a month. 
However, Niwatthumrong accepted that its expected earnings from rice sales would not by themselves be enough to cover the Bt110 billion or so still owed to farmers within a short period. The caretaker government needs to get approval from the EC to issue bonds, and also for some budget allocations from the Cabinet.
The ministry will also continue to sell rice from its stockpiles totalling about a million tonnes a month for the farmers. The government has about 12 million to 13 million tonnes of rice in the stockpiles, he said.
Also yesterday, the Bank for Agriculture and Agricultural Cooperatives held a board meeting to consider how to raise funds to help the farmers. The meeting had not concluded by press time.
Recently, it emerged that the BAAC might issue promissory notes worth Bt80 billion to pay the farmers. The first batch was expected to be Bt20 billion. The state-owned Vayupak Fund was reportedly one targeted purchaser of the notes.
MFC Asset Management, one of the Vayupak fund managers, said yesterday that the fund would follow its investment policy as designed previously. 
The fund is allowed to invest in equities categorised in SET 50 listed companies and is able to hold bonds as liquidity to manage its investment shift to equities more easily. 
“As of now, the Vayupak Fund, which has two committees – regulatory and investment – has not called for a meeting. So the fund’s investment policy will be unchanged,” said MFC first executive vice president Pannarat Bhanpato. 
Meanwhile, Veera Vutthikongsiri-gool, senior executive vice president of Krungthai Asset Management, another Vayupak fund manager, said the fund committee would have to see whether the BAAC’s promissory notes would offer an interesting yield and maturity period. 
However, he said that if the fund decided to invest in the promissory notes, it would not mean that it would have to offload its investment in equities in order to buy them. 
Sombat Narawutthichai, secretary-general of the Government Pension Fund, yesterday again denied a rumour that the Finance Minister had an idea to ask the Finance Ministry might ask the GPF to invest in the promissory notes issued by the BAAC to fund the government’s rice project. Moreover, he insisted that the GPF had not called for an urgent meeting of its board members to discuss the matter. 
“The next meeting, which is an ordinary one, will take place by the end of March,” said Sombat, adding that the fund’s portfolio was now fully invested.