B60bn rice price support scheme

The cabinet has approved the use of a 60 billion baht fund from the Bank for Agriculture and Agricultural Cooperatives(BAAC) to support rice prices, Finance Minister Korn Chatikavanij said on Tuesday afternoon.

The price support scheme will have three parts, he said:

1) The BAAC will provide 20 billion baht in loans guaranteed by the Finance Ministry to the Marketing Organisation for Farmers and the Public Warehouse Organisation to directly buy rice from farmers.
2) The BAAC will also provide 20 billion baht in loans to rice millers to boost their liquidity on condition that they must buy rice from farmers at prices set by the Ministry of Commerce. The government will cover loan interest of 2 per cent and the millers will pay loan interest at 2.75 per cent.
3) The BAAC will set aside another 20 billion baht for a rice mortgaging scheme to help farmers who need money but prefer not to sell their rice when prices are low.

The Finance Ministry admitted that by guaranteeing the loans, the country’s public debt will increase by 20 billion baht.