Trade union against interbank loan; peasant protest continues
4500 farmers from 20 provinces are demonstrating today in front of an office of the Ministry of Defense that serves as Prime Minister Yingluck's temporary workspace. If the government does not come up with money within seven days for the rice they have surrendered, the protest will be expanded. The farmers want Yingluck to speak to them.
Demonstrations have been going on at the Minister of Commerce in Nonthaburi since Thursday. Demonstrators in the photo: Look, we owe this. In recent weeks, angry farmers have also blocked roads in several places in the country, including the main route to the South, in protest.
A total of 1 million farmers are waiting for money, which requires an amount of 130 billion baht. [Spectrum, the Sunday supplement of Bangkok Post, mentions 177 billion baht.]
Also today, the Bank for Agriculture and Agricultural Cooperatives (BAAC) will begin disbursements, Prime Minister Yingluck said. That money comes from a loan from the Government Savings Bank (GSB) to the BAAC.
On February 15, the newspaper reported that it was a loan of 17 billion baht, yesterday the newspaper's website mentioned an amount of 5 billion baht and today the newspaper mentions 20 billion baht.
GSB union opposes controversial loan to BAAC
The GSB union calls on the management to cancel the loan because it undermines customers' confidence in the bank. Request the money back and suspend any loan that could affect confidence in the bank, the union writes in a statement released yesterday. The statement comes in response to a social media campaign calling on savers to withdraw their deposits.
According to GSB director Worawit Chailimpamontri, the board of directors approved the [20 billion baht] loan after there was 'no request' that the money would be used to finance the [controversial] rice mortgage system. Worawit appeals to his customers not to withdraw their money and not to close their account. The money is not in danger, he vowed, the loan to the BAAC is not unique; the GSB has provided interbank loans worth more than 35 billion baht to XNUMX banks.
Minister calls on farmers not to come to Bangkok
Minister Niwatthamrong Bunsongpaisan (Trade) confirms Prime Minister Yingluck's words. The BAAC starts paying farmers today. 4 billion baht can be paid out per day. He hopes the partial payments will take the sting out of the farmers' protest. 'There is no need for farmers to come to Bangkok. The money will be transferred to their account at the BAAC.'
The minister further said that it expects the Department of Foreign Trade to raise 7 billion baht from two auctions of 460.000 and 200.000 tons of rice and 1 billion baht from an auction of 220.000 tons through the Agricultural Futures Exchange of Thailand.
Minister Kittiratt Na-Ranong (Finance) is also trying to calm things down. He writes on his Facebook page: 'The government is committed to confirming its sincerity in working entirely for the farmers. This is an opportunity to show who is sincere and who is misusing farmers' concerns as a political tool.”
The farmers, however, are no longer fooled. All too often they have been thrown into a rut. Rawee Rungruang, leader of a farm network in six western provinces, says the government is just buying time. Today there will be a demonstration, basta!
Farmers protest at Suvarnabhumi airport
Ten farmers demonstrated for half an hour at the arrivals hall of Suvarnabhumi airport on Sunday. They drew attention to the major problems they face because they have not been paid for their rice for months. The farmers also collected. Whoever gave money received a bunch of rice stalks. The government says it will start paying out arrears on Monday, but that is only a small amount.
(Source: Bangkok Post, Feb. 17, 2014; website February 16, 2014)
Explanation
The rice mortgage system, reintroduced by the Yingluck government in 2011, was launched in 1981 by the Ministry of Commerce as a measure to alleviate the oversupply of rice in the market. It provided farmers with short-term income, allowing them to postpone selling their rice.
It is a system in which farmers receive a fixed price for their paddy (unhusked rice). Or rather: with the rice as collateral, they take out a mortgage with the Bank of Agriculture and Agricultural Cooperatives. The Yingluck government has set the price for a ton of white rice at 15.000 baht and Hom Mali at 20.000 baht, depending on quality and humidity. In practice, farmers often receive less.
Because the prices paid by the government are 40 percent above market prices, it is better to speak of a subsidy system, because no farmer pays off the mortgage and sells the rice on the open market.