Govt eyes income from 1m-tonne G2G China rice sale
February 28, 2014 00:00 By Petchanet Pratruangkrai
The caretaker government has high hopes of bringing in some funding from the sale of 1 million tonnes of rice from the state stockpile via a government-to-government deal to pay what it owes farmers under the pledging programme.
The rice sale would help speed up payments to farmers, as only one bidder showed up yesterday when the Finance Ministry opened the bidding for its Bt20 billion promissory notes (PN).
An industry source said the Chinese government could sign an agreement for the deal in the next few weeks depending on the Thai government’s readiness.
The source said the G2G deal must be done with China’s state-owned enterprise COFCO as the Thai government’s counterpart. However, the deal should not be finalised in short.
"Still, the government is yet to seek the Election Commission's approval for the deal, as this is considered an obligation of the new government," said Surasak Riangkrul, director general of Department of Foreign Trade.
Meanwhile, the Bank for Agriculture and Agricultural Cooperatives (BAAC) on Thursday agreed to set up "Farmer Assistance Funds" for temporary relief to the unpaid farmers. There will be three funds: one from donations, one interest-free, and a third that is expected to provide a return on investment, for which the BAAC will pay interest of 0.63 per cent per annum.
BAAC president Luck Wajananawat said the bank projected receiving about Bt20 billion in donations and investments from those wanting to help the unpaid farmers.
The funds will be open for donations and investment from March 10 to June 30, while payments should be able to reach farmers from March 10 until the end of the year. The BAAC will manage the funds transparently and should get some return for investors from rice sales or loans by the end of the year, Luck said.
Minimum investment to each fund (except donations, for which there is no minimum) is set at Bt1,000.
The BAAC will allocate initial investment capital worth Bt100 million from its own resources, from which it expects to earn no interest. The bank will also allocate Bt10 million from its central budget to advertise the project.
A group of farmers yesterday gathered in front of the United Nations building on Rajdamnoen Avenue, while waiting to submit a petition to HM the King asking for the royal assistance.
The payment could be further delayed as the Public Debt Management Office yesterday had a difficulty in finding the buyers of the eight-month PN.
Several state enterprises were reluctant to join the bidding, fearing that it could violate a constitutional clause that a caretaker government should not embark on recurring debt. It was not disclosed which who was the only bidder for the financial paper.