The government is set to borrow money from state enterprises to fund payments to unpaid farmers under the rice-pledging scheme after its bid to use the Bank for Agriculture and Agricultural Cooperatives (BAAC)’s liquidity was unsuccessful.
Deputy Finance Minister Tanusak Lek-uthai, in his capacity as chairman of the BAAC board, earlier held urgent meetings to persuade the bank to advance payments to farmers but later announced that the government opted to use 40 billion baht from state enterprises to fund scheme.
According to Mr Tanusak, the BAAC has over 110 billion baht in liquidity and is in the position to help the government pay rice growers before the scheme runs out of money.
The Commerce Ministry’s rice sales have missed the target of 12 billion baht per million tons per month. Farmers already pledged 9.97 million tonnes of paddy worth almost 100 billion baht during the start of the 2013-14 main crop season from October 1 to January 7.
The BAAC has so far paid 50 billion baht to farmers who pledged 3.5 million tonnes of paddy.
Mr Tanusak added that the bank would pay all unpaid farmers by the end of January, which was later than the original date of January 15. The cabinet had previously agreed that the BAAC would pay farmers the 70 billion baht owed them by January 15. The promise came after hundreds of farmers had set up road blockades near Phichit province to protest against long-delayed payments under the rice-pledging scheme.
The deputy Finance Minister said that at the end of the year, the scheme’s budget is expected to balloon to 190 billion baht, a significant increase from the 160 billion baht estimated.
In addition to the mounting losses, the rice-pledging scheme is also under investigation by the National Anti-Corruption Commission (NACC). The NACC’s sub-committee announced on January 16 that the agency would launch a probe against caretaker Prime Minister Yingluck Shinawatra over her alleged mishandling of the pledging scheme. The premier chaired the National Rice Policy Committee overseeing the rice scheme.