Amid lingering doubts over its liquidity to finance the troubled rice pledging programme, the caretaker government pledges to pay all farmers who sold their paddy to the scheme within this month.
Caretaker Deputy Prime Minister Niwatthamrong Bunsongphaisan, in his capacity as chairman of the National Rice Policy Committee, said after a meeting yesterday that the Finance Ministry, Budget Bureau and Commerce Ministry had agreed to make payments to all farmers by the end of the month.
Since the main crop began in October, as of Dec 18 about 8.4 million tonnes of paddy had been pledged under the scheme. The main crop runs until the end of February.
White rice paddy made up 4.87 million tonnes, Hom Mali rice paddy 2.67 million tonnes, Pathum Thani paddy 8,500 tonnes, provincial fragrant paddy 420,000 tonnes and glutinous rice paddy 380,000 tonnes.
Several farmers are facing late payment as funding is limited, while the Bank for Agriculture and Agricultural Cooperatives (BAAC) refused to use its own liquidity to finance the programme in advance without the National Rice Policy Committee's approval to widen the 500-billion-baht outstanding spending limit.
The caretaker government, however, cannot provide any approval as it could breach electoral regulations.
Mr Niwatthamrong, also caretaker commerce minister, said at least 11-12 million tonnes of paddy are expected to join the pledging programme, costing 190-200 billion baht.
He did not identify detailed sources of funds, saying only that funding still comes from three sources - the regular budget, loans by the Public Debt Management Office (PDMO) and rice sales by the Commerce Ministry.
As of Dec 15, the government has returned 140 billion baht from rice sales to the BAAC and expects to return 10 billion more within this year, well below the 200 billion baht it aimed to repay earlier.
Rice pledging, a key populist policy of the Pheu Thai Party, has drawn sharp criticism for hefty losses and pledging prices 40-50% higher than market prices.
The government has spent up to 680 billion baht in four harvest seasons over the last two years and allocated a further 270 billion baht to finance the 2013-14 main crop.
In a move to rescue the scheme, caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong is scheduled to call a meeting on Wednesday to seek funding to pay rice farmers.
A senior Finance Ministry official said Mr Kittiratt insisted the ministry would find every means to fund the scheme and vowed to take full responsibility on his own in any case.
According to the source, Mr Kittiratt also demanded the PDMO reinstate a plan to issue 13 billion baht in bonds, which was recently called off as it failed to get a cheap coupon rate.
Proceeds would be used to pay to farmers who have pledged rice for the main crop.