Government remains desperate for money for farmers

Another setback for the government, which is desperate for money to pay the farmers. The Board of Directors of the Bank for Agriculture and Agricultural Cooperatives (BAAC) refuses to use its own liquidity to pay rice farmers.

The bank does want to issue promissory notes (promissory notes, PN), if they are covered by the Ministry of Finance. But a spokesman for Finance does not expect that there will be much interest.

The first 20 billion of the total 80 billion baht can be subscribed on Thursday; a week later they are available. The cabinet already gave permission for this operation in September, when it was not yet outgoing.

According to a source at Finance, Minister Kittiratt Na-Ranong (Finance) is already seeing the storm, because he has gauged interest in the promissory notes from, among others, the Islamic Bank of Thailand (not the most healthy bank; it has an extremely high percentage of NPLs). ), the waterworks of Bangkok and the Land and Houses Bank.

The BAAC board of directors, through Virat Sakjirapapong, denies reports that bank president Luck Wajananawat is being considered because he does not pay enough attention to the board and the minister. Yesterday hundreds of bank employees went to the BAAC headquarters to encourage Luck (photo). Virat also says that the bank will not use its liquidity to pay the farmers. That money must come from loans and rice sales.

For the current harvest (October to the end of this month), the bank has paid out 62,9 billion baht for 3,91 million tons of paddy. 875.900 farmers still have to receive 115 billion baht for 6,7 million tons of surrendered rice. The bank is working on a plan to form a charity fund that farmers can call on for loans of up to 50.000 baht.

Secretary General Sombat Narawuttichai of the Government Pension Fund denies media reports that the Treasury intends to split government bonds in the stomach in order to pay farmers. The funds of the GPF, intended for investments, have already been largely committed and the monthly contributions of the members of 1 billion baht are insufficient to finance the mortgage system, Sombat said.

Previously, the government has tried several times to raise 130 billion baht through bond sales (no interest in it, two auctions failed), loans from commercial banks (denied due to fear of legal complications), an interbank loan from the Government Savings Bank (GSB) to the BAAC (dropped after protests) and bond purchase by Airports of Thailand (staff resist). The interbank loan led to a bank run on the GSB. In a few days, 56,5 billion baht has been withdrawn by savers.

Explanation and addition from Dick van der Lugt:

I hope I have presented the news correctly, because I did not find the message in the Business section to be very clear. In the first section I come across the amount of 20 billion baht again, but now that money should come from the regular budget at the request of the National Rice Policy Committee. That request is before the cabinet today. The Ministry of Commerce will also request permission from the Electoral Council. The ministry has already asked the Electoral Council to withdraw 712 million baht from the budget. That request has already been approved by the government.

More rice news

The newspaper reports more news about the rice misery. Farmers in the Central Plains have filed a petition with the Central Administrative Court. They ask the administrative court to scrap the mortgage system, because it poses a direct threat to the private rice trade. The system harms rice cultivation and trade and disadvantages farmers because the government is unable to pay them. The court is expected to rule within two weeks.

The Mental Health Department is concerned about the well-being of the farmers camped at the Ministry of Commerce in Nonthaburi since February 13. Aid workers have talked to farmers there. A few show serious signs of stress and depression.

(Source: Bangkok Post, February 25, 2014)