The caretaker government is considering seeking additional funds totalling Bt130 billion to subsidise the rice-pledging scheme through bank loans and the issuing of bonds, following a Council of State decision that this may be legally possible despite res
The latest move is expected to appease angry farmers, who are threatening to escalate their protests nationwide as a result of not receiving payment for overdue rise pledges, owed to them for the 2013-14 crop. Some farmer groups have also threatened to join the People's Democratic Reform Committee (PDRC) protests in Bangkok today if their demands are not met.
That decision could help boost Pheu Thai Party’s popularity in the upcoming election, as farmers have threatened to drop their support for the party if they are not compensated for rice submitted to the pledging scheme since October.
The Council of State sent a letter to the government on Thursday saying that it could seek more funds for the rice-pledging scheme, secretary-general Chukiat Rattanachaicharn told Krungthep Turakij newspaper.
Chukiat said that after consideration, council members agreed that the caretaker government’s fund-seeking plan for the rice pledging scheme was not a new project and could lawfully go ahead.
Payment for rice pledges during the latest harvest season from October 2013 to February 2014 were approved in a Cabinet meeting on September 3, ahead of the House dissolution on December 9.
Chukiat added that according to the council’s consideration, many farmers had entered the project, and this was considered a loan obligation, so the government would have to seek funds to manage debts incurred from the project.
Under the scheme, the government needs at least Bt130 billion more to pay for the pledged rice for the 2013-14 season. About 10.4 million tonnes of extra paddy – worth Bt167 billion – is expected to gradually enter the scheme from the latest harvest.
The government has so far paid Bt50 billion to farmers, but needs additional funds to pay off farmers still waiting to be compensated.
The Bank for Agriculture and Agricultural Cooperatives (BAAC) expects that the amount due in payment for the paddy under the scheme will reach Bt190 billion when the scheme ends in February.
“This means that rice pledging for the latest main crop comes under the conditions of Section 181 (3) of the constitution,” said Chukiat, which meant it was lawful.
The Public Debt Management Office (PDMO) cited in a report on Thursday that once it receives the green light from the council it could obtain more funds, and would begin acquiring around Bt10 billion a week by way of bank loans and the issuing of bonds.
PDMO deputy director general Suwit Rojanavanich said yesterday that the office would initially open bidding for short-term loans of between Bt10 and Bt13 billion. The amount for short-term loans could later be converted to long-term loans with the issuance of bonds. However, he said the Office needed to wait for written advice from all of the four organisations, namely Cabinet, the Council of State, the Election Commission, and the BAAC, to ensure it could obtain the additional funds.