Govt allocates Bt712 million to pay farmers under rice subsidies

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BANGKOK, Feb 11 – Thailand’s caretaker Cabinet today approved the withdrawal of Bt712 million from the central fund for overdue payments to farmers from the rice pledging scheme.

Caretaker Deputy Prime Minister/Commerce Minister Niwatthamrong Bunsongphaisan said the money would be paid to farmers who were given receipts for the rice they delivered.

More than 3,900 households have sold some 40,000 tonnes of rice from the 2012-2013 crop but have yet to receive payment.

Mr Niwatthamrong said the government would submit the Cabinet’s resolution to the Election Commission for endorsement tomorrow.

He said the government has already paid Bt61 billion to farmers for rice in the 2012-2013 crop, while the total pledging value was Bt180 billion.

The overdue payments amount to about Bt120 billion, he said, admitting that payments would be slow since the government has yet to acquire a big enough budget allocation.

He said the government was ready to borrow from financial institutions to pay farmers three weeks ago but it was opposed and obstructed by some people.

Mr Niwatthamrong said the Internal Trade Department was instructed to facilitate farmers who wanted to check rice in state warehouses to ensure the grain was not missing, adding that the government would be willing to return rice to farmers who wanted it back instead of waiting for payment.

He described as groundless an allegation that rice from neighbouring countries was smuggled into the kingdom to cash in on the subsidy programme.

Caretaker Deputy Finance Minister Thanusak Lek-uthai said the Bank of Agriculture and Agricultural Cooperatives (BAAC) has extended debt payment deadlines for six months to 1.05 million farmer households.

The BAAC will wrap up the financial burden from the scheme to be approved by the Election Commission through the caretaker Cabinet, he said.

The bank would be willing to lend to farmers who want money for planting rice in the new season at a maximum of Bt100,000 per household.

The World Bank pointed out that Thailand’s gross domestic product will grow 1 per cent this year if the government sells rice in the state stockpiles to pay the Bt120 billion debt to farmers.

The payments will stimulate the economy and domestic consumption, it said.

It said the rice pledging scheme could increase farmers’ income and improve their quality of life.

The scheme covers one-third of farmers nationwide but it has caused Bt400 billion damage, or 2 per cent of GDP in the last two harvests, it pointed out.

The major reason was the government’s failure to sell rice, compelling it to borrow to pay farmers, it said, adding that the government should resort to other assistance measures such as developments of rice seeds, irrigation system and soil quality to boost productivity and paddy price.