The Finance Ministry is rushing to raise funds to pay farmers for their pledged rice, while the Bank for Agriculture and Agricultural Cooperatives has found through a survey that farmers are using their credit cards for investment and are seeking other oc
The Commerce Ministry has already returned Bt20 billion to the Finance Ministry that it had borrowed from the central budget to make some of the payments that are overdue under the rice-pledging scheme.
Tanusak Lekuthai, caretaker deputy finance minister, said yesterday that the ministry had been going ahead with payments to farmers. It is seeking possible ways, including borrowing, to tap the Bt11-billion farmers assistance fund. The fund, which may receive Bt9 billion more deposits from local administrative organisations, is expected to close down by month’s end.
"The Constitutional Court and the National Anti-Corruption Commission insist on the remaining 26 Cabinet ministers’ full authority for administration. Therefore, we will call a meeting of management of the ministry and state-run financial institutions on Monday. An urgent task is to find ways to raise Bt70 billion to Bt80 billion for rice-pledging farmers," he said.
There has not yet been a discussion between the Finance and Commerce ministries on the planned request for an additional injection from the central budget.
Luck Wajananawat, BAAC’s president, plans to inform the bank’s committee of the status of the farmers assistance fund on Monday.
About 800,000 farmers have been paid for pledged rice worth Bt110 billion. About 720,000 farmers are still waiting for about Bt82 billion.
If the fund raises Bt10 billion, there may be about Bt70 billion remaining for the Finance Ministry to come up with. All payments to pledging farmers are expected to be completed by late this year or early next year.
There may be concerns about the interest burden, as it could be higher than normal if the BAAC has to issue bonds. Another concern is redemptions, which may not be in line with the bonds’ maturities, as payments to farmers may have to wait for rice sales.
According to the survey conducted by the BAAC’s research centre, to finance expenses for growing rice in April, 65.7 per cent of farmers in the scheme charged them on their credit card, 59.1 per cent used borrowings and 28.5 per cent used their savings.
While waiting for rice-pledging payments, 30.7 per cent of the farmers in the scheme generated income from sideline work, 28.5 per cent used borrowings and 21.9 per cent used savings.
Farmers have urged the government to speed up rice-pledging payments and the BAAC to lower interest rates and extend debt-repayment periods, the survey said.
Surasak Riangkrul, director-general of the Foreign Trade Department, said the Commerce Ministry should be able to get some money allocated from the central budget to help make overdue payments to farmers because it can repay the debt ahead of schedule.
The department can bargain to sell about 207,000 tonnes of rice out of 450,000 tonnes offered at an auction on Wednesday. Eight bidders have won by offering good prices to the ministry.
The department will soon seek approval from caretaker Commerce Minister Niwattumrong Boonsongpaisan to sell this stock.
Yesterday, 18 traders joined the Commerce Ministry’s auction of 220,174 tonnes of rice in the 11th round of bidding via the Agricultural Futures Exchange of Thailand (Afet) this year.
The prices they quoted were better than previous bids as the local market is short of rice.
The turnout has encouraged the Commerce Ministry to schedule another tender in the futures market for 200,000 tonnes of rice on May 30.
Yanyong Phuangrach, caretaker deputy commerce minister, said the ministry would continue to sell rice via the futures market this year to release more rice from the inventory.