Thailand Rice pledging scheme not extended after next month deadline

The National Rice Policy Committee (NRPC) resolved today not to extend the February deadline to purchase rice in the 2013/2014 crop from farmers.

Caretaker Deputy Commerce Minister Yanyong Puangrach said some farmers have asked the government to continue buying rice from them under the pledging price of Bt15,000 per tonne after the end of the rice pledging programme late next month.

The government doesn’t want to be involved in additional financial obligations, he said, adding that the caretaker Cabinet will be asked to find financial resources to pay the remaining Bt700 million for rice in the 2012/2013 crop.

Mr Yanyong stood firm that the government has never intended to refuse payment but said that the reimbursement procedure for a caretaker government is complicated.

The government has so far paid Bt680 billion to farmers – a signal of its determination to pay and help farmers earn higher income from their rice sales, he said.

Mr Yanyong criticised the labour union of the Bank of Agriculture and Agricultural Cooperatives (BAAC) for obstructing loans, to be sought by the government for payment to farmers.

The BAAC has made profit from the rice pledging scheme including deposits from farmers and bonus to bank employees was from the profit the bank has made from the rice subsidy scheme, said Mr Yanyong.

He said the BAAC should help farmers who are encountering financial constraint and the BAAC has received full payment plus management and risk fees and interest from the loans given to the government.

There has never been risk involved for the BAAC and the labour union should let management manages the issue, he said, calling on the labour unions of the Government Savings Bank and Krung Thai Bank to take that into consideration if the government seeks help from the two state banks.

The government is not asking for free service and employees should bear in mind the state enterprises’ objectives of sustaining the economy in time of trouble, he said.

He said the Election Commission (EC) should also be aware that the rice pledging scheme is a continuous project, and not an election campaign.

Whether the government is capable of paying to farmers within the Jan 25 deadline depends on the EC’s decision, he said.

Caretaker Deputy Prime Minister/Finance Minister Kittiratt Na-Ranong is scheduled to meet with EC members tomorrow to discuss the issue.

Vorapak Tanyawong, president of Krung Thai Bank, gave assurances that an extension of loans to the BAAC for the rice subsidy plan, if made, will be under similar regulations imposed for other financial institutions.

“We have to take into consideration the risk factor, the applicant’s payment capability and guarantors. The loan request must be scrutinised by a committee,” he said.

“Krung Thai Bank is a public company with 45 per cent of shares held by retail investors and financial institutes. It has to compete with major commercial banks and be accountable for stakeholders. It is under the supervision of the Bank of Thailand, Stock Exchange of Thailand and the Auditor General Office,” said Mr Vorapak.

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