State-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) has set a goal to create 50,000 young smart farmers in five years, with a commitment to support low-interest loans totalling 55 billion baht.
Speaking after signing a memorandum of understanding for cooperation to promote and support the development of next-generation farmers with the Agricultural Extension Department on Tuesday, BAAC president Chatchai Sirilai said the objective of the project is to cultivate a new generation of farmers who are capable of harnessing agricultural expertise and technology to add value to crops while lowering production costs.
The project seeks to empower young farmers to take the reins of Thailand's agricultural sector, raising their income level, he said.
BAAC is providing low-interest loans under the bio-, circular and green model, with a minimum retail rate (MRR) of -1 for farmers and an MRR of -0.5 for agricultural institutions, totalling 35 billion baht to support young smart farmers.
These loans are divided into three categories: bio-economy credit, circular economy credit and green credit.
In addition, for elderly retired farmers who still have outstanding debts with BAAC, the bank will offer refinancing opportunities to their heirs who wish to continue farming.
This is part of the effort to build a new generation of farmers to replace the older generation. The scheme has a credit limit of 20 billion baht and a maximum loan term of 15 years.
The interest rates are the MRR for the first five years, MRR-1 for the next five years, and MRR-2 for the 11th to 15th years.
"The development of new-generation farmers will strengthen Thailand's agricultural sector and enhance its competitiveness in the global market," Mr Chatchai said.
"BAAC set an ultimate goal to focus on elevating the income of the agricultural sector in four aspects: access to financial capital, technology adoption, adding value to agricultural products, and knowledge and skill development in marketing."
According to recent studies by Kasikorn Research Center, agricultural sector problems stem from the economic structure, as the sector involves a significant proportion of the population.
Data from a survey in 2023 revealed the average income per person in the farming sector is lower than in other sectors. Income in the agricultural sector is five times lower than that of the service sector and eight times lower than that of the industrial sector.
The productivity of the Thai agricultural sector is also lower than its regional peers, such as Vietnam and India, as well as below the global average.