Troubled pledging scheme can't get financing to pay angry farmers; as road blocks loom
The caretaker government is being driven into a corner with only one choice left for securing funds to pay off protesting rice farmers – immediately releasing it stockpiles, which could result in huge losses.
However, the government will miss one sale that it had counted on after a Chinese trading partner under a government-to-government deal cancelled its contract to buy rice from Thailand.
The government has failed to find financing, as some legal issues remain unclear. It sorely needs at least Bt130 billion to pay off more than a million farmers who had pledged 10 million tonnes of paddy worth more than Bt160 billion with the government. Some groups of farmers in the Central region are still blocking some routes to the North and South in protest.
The Finance Ministry came up empty-handed when it held an auction for a Bt20-billion bridge loan last week, which was meant to be part of Bt130 billion in funds that the government planned to secure to settle bills with farmers. The success of the next auction scheduled for tomorrow is still in doubt.
The Office of the Auditor General has sent separate letters to Prime Minister Yingluck Shinawatra and Finance Minister Kittiratt Na-Ranong on its investigation into the rice-pledging scheme. It said the government should speed up its sales of rice from its inventory and report the results to the committee responsible for auditing the pledging project. Then the committee can close the books for all crops under the pledging project since 2004-05 in a bid to promote further public disclosure.