The Bank for Agriculture and Agricultural Cooperatives will lend Bt25 billion to a programme to add value to five community cash crops. This is on top of Bt200 billion worth of BAAC projects already approved by the National Council for Peace and Order.
The five commercial crops are compound rubber (natural rubber with chemicals), rice, tapioca, energy – biomass/sunlight – and extracted oil palm.
Adul Kanchanawat, senior executive vice president, said yesterday that the bank had joined with the national council for agriculturists to use resources and cooperate in the development of production and management technology. This would add value to agricultural products and upgrade farmers’ living standards.
The loan is an extension of five projects worth Bt200 billion already approved by the bank’s board.
Loans are limited to Bt300,000 per project with an interest rate of minimum lending rate (MLR) minus 1 percentage point if the project qualifies under the conditions of the NCPO.
About 80 per cent of communities’ projects will hit the ceiling of Bt300,000 by year-end. Repayment of principal and interest must be made within one year for working capital and five to 10 years for investment.
The interest rate is the MLR-1 percentage point for prime customers on expectations of a rate of no more than 3 per cent non-performing loans to outstanding loans.
Thanit Suthasuwan, senior vice president of BAAC, said the bank targeted Bt80 billion in new loans, of which Bt65 billion will be for the value chains of nine products – rice, tapioca, rubber, oil palm, sugar cane, corn, fruit, tobacco and beef.
Loan extensions are targeted to rise to 10, 15 and 20 per cent of total volume for each product in three years.
For example, for jasmine rice with annual production of 8 million tonnes, BAAC will provide loans for 800,000 tonnes for the first year for 7,800 of the total of 78,000 communities with no more than Bt3 million per case. The loans will carry an interest rate of 7 per cent.
Prapat Panyachartrak, president of the National Farmers Council, said this project would help farmers make fast adjustments and develop agricultural products from upstream to downstream.
Good rice seeds need to be developed within three years in accordance with the NCPO’s policy to assist farmers, he said.