Govt tenders promissory notes today for money to pay farmers

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BANGKOK, Feb 27 – Thailand’s Finance Ministry will tender promissory notes to earn Bt20 billion for rice payments to farmers amid opposition by state enterprise employees against joining the bids.

The Public Debt Management Office has invited financial institutions and state enterprises to participate in the auction, but it is reported that major commercial banks will pass on participation in the bids to prevent repercussions on their businesses similar to the case of the Government Savings Bank (GSB).

The GSB encountered massive withdrawals from dissatisfied depositors after lending Bt5 billion to the Bank of Agriculture and Agricultural Cooperatives (BAAC) to pay farmers under the rice pledging scheme.

The market interest rate for an eight-month promissory note is about 2 per cent.

Businessmen in financial circles have expressed doubt as to whether the caretaker government is legally permitted to issue such notes.

Thanasak Watanathana, governor of the Metropolitan Water Works Authority, said the state enterprise which was initially interested in acquiring Bt1-billion in promissory notes, but has since decided against joining the bids.

Employees of the Telephone Organisation of Thailand (TOT Plc) also strongly objected to the bids.

Soonchai Kumnoonsate, governor of the Electricity Generating Authority of Thailand (EGAT), said his state enterprise was not legally allowed to get involved in investment unrelated to electricity development.

He said the months-long political unrest has impacted EGAT revenue due to diminishing electricity use. He predicted revenue growth at less than 2 per cent, and it must spend Bt39 billion from its liquidity fund to finance its power security project.

The Commerce Ministry yesterday organised a tender through the Agricultural Futures Exchanges in Thailand (AFET) for 230,000 tonnes of rice which was contested by 17 bidders. Bid winners will be announced tomorrow.

The ministry has so far sold over 300,000 tonnes of rice through AFET, generating Bt3 billion. It plans to hold rice auctions every month.