The Bank for Agriculture and Agricultural Cooperatives (BAAC) has already spent 650 billion baht to finance rice pledging after two years of the scheme.
Executive vice-president Supat Eauchai said the 2012-13 main crop alone includes 15 million tonnes of pledged paddy rice with a value of 230 billion baht and the second crop now being pledged amounts to 5.4 million tonnes worth 80 billion baht.
Mr Supat said the pledging period for the second crop is not over, and farmers can pledge rice until Sept 15 in the central provinces and the end of November in the southern provinces.
He said the government's decision to begin limiting the pledging amount per family to 500,000 baht will help to restore market forces.
"Since the government has a ceiling for pledging, some amount of rice will need to enter the market through normal channels," said Mr Supat. "Then the rice millers will return to buy rice from farmers as usual, and that will drive market forces to resume automatically."
The government initially set the budget for rice pledging at 500 billion baht. But more paddy rice entered the scheme than expected, resulting in the Finance Ministry essentially demanding the BAAC finance the extra 150 billion baht.
"Apart from rice, there are also tapioca and rubber pledging programmes that cost about 50 billion baht a year," said a BAAC executive who declined to be named.
"So this government has spent at least 700 billion baht already on farm product subsidies."
The executive said the Commerce Ministry has repaid 120 billion baht to the BAAC so far, with a goal of repaying 220 billion in debt from rice pledging by year-end.
Meanwhile, the ministry is speeding rice sales from its massive stockpile through government-to-government deals, maintaining a full-year target for rice exports of 8.5 million tonnes.
Commerce Minister Niwatthamrong Bunsongphaisan said the latest deal is with the Iranian government for 250,000 tonnes of 100% white rice.
Shipments to Iran will begin in October and run for six months.
"The Iranian government told us they would need a further 1 million tonnes of rice over the next two years," said Mr Niwatthamrong.
The selling price is undisclosed at the request of the Iranian government, but Mr Niwatthamrong admitted Iran bargained a lower price after recent reports of rice quality issues.