April 22, 2014 00:00 By Suphannee Pootpisut
About Bt2 billion-Bt3 billion remains to be paid to farmers for the rice-pledging scheme's 2013/2014 season, while total outstanding payments expected to be covered by Finance Ministry borrowing amounts to Bt90 billion, according to the Bank for Agricultu
The possibility of Bt40 billion in financial assistance being sourced from the central budget remains low, the bank said.
One of the three sources of funds for repaying farmers – the Ministry of Commerce (MOC)’s rice sales – hit its repayment target of Bt8 billion-Bt10 billion in the past two to three months, the bank said.
If this is the only source for repayment to farmers, funds will be depleted by the end of this year, the bank said.
The other two sources are borrowing by the Finance Ministry, and a fund for farmers.
It is uncertain whether the fund’s returns will hit their target in the coming financial periods, the bank said, adding that repayments sourced from the Finance Ministry’s borrowings are expected to occur sooner.
However, uncertainty remains over this borrowing, as financial institutions remain concerned over legal issues surrounding the scheme and depositors’ wariness over lending to it.
The bank also expected to earn more donations for the fund for farmers, following a recent amount of Bt5 billion – almost all of which has already been repaid to farmers.
“If the Finance Ministry is unable to borrow, it will be difficult to make repayments to farmers under the rice-pledging scheme. Rice sales recently hit their target. However, we are not certain about [their potential] in the future,” the bank said.
In response to farmers’ calls for the government to set aside Bt40 billion to repay them for pledged rice, the bank said it was not easy to make that happen as this would involve use of the state’s central budget for emergency purposes. Historically, no government has used such a large amount of the central budget for any such purpose.
“If [the central budget] is used heavily, that will affect the government itself. This is particularly true in a period prior to an election. [Use of this option] would depend on the Election Committee,” it said.
The BAAC has about Bt10 billion in its coffers to make repayments to the central budget, assuming that funds from rice sales will cover all Bt20 billion worth of borrowing in May.
“We will set aside funds from rice sales from now to make repayments to the central budget. If we repay all Bt2 billion-Bt3 billion to farmers, they will have to wait for the next round of rice sales, which is expected to begin in June,” the bank said.