The Bank for Agriculture and Agricultural Cooperatives (BAAC) has offered a six-month debt moratorium for rice growers affected by the delayed rice payments, BAAC president Luck Wajanawat said on Wednesday.
Rice growers in Ayutthaya are facing irrigation water shortages. (Photo by Sunthon Pongpao)
Mr Luck said the offer is aimed at easing difficulties of farmers who presented invoices to claim money from the BAAC for their rice pledged under the government's rice scheme last year.
They failed to get the payments because the government could not allocate funds to the BAAC to pay them as planned, he said.
The bank is also ready to consider approving new loans for farmers in need of money for new crops to help ease their problems. The new loans will also prevent farmers from falling prey to loan sharks, he said.
The BAAC chief insisted that the new loans approval will be based on the bank's lending regulations as usual.
Farmers seeking loans can contact all BAAC branches nationwide, he added.
According to industry sources, Thailand expects to export 7.5 million tonnes of rice this year after losing its ranking as the world's top rice exporter to India and Vietnam two years ago.
"If the government and private sector cooperate we can win back the rice market," Thai Rice Exporters Association president Charoen Laothamatas said.
The year's predicted exports would earn the country 4.5 billion United States dollars, compared with exports of 6.6 million tonnes and 4.1 billion dollars in 2013.
Thailand was the world's largest rice exporter for three decades until 2012, when shipments dropped to 6.9 million tonnes from 10.7 million tonnes the previous year.
The decline was blamed on the government-subsidised minimum price put in place by caretaker Prime Minister Yingluck Shinawatra after taking office in 2011.
The government buys rice at 40% to 50% above market rates, creating a state monopoly and hiking the price of Thai rice on the international market.
The Thailand Development Research Institute (TDRI) estimates that the scheme has lost the government more than 400 billion baht (12.3 billion dollars) in its first two years.
The policy has brought Ms Yingluck and her caretaker cabinet under investigation by the National Anti-Corription Commission (NACC) for lack of transparency in accounting for the rice stocks.
Investigators found no evidence that government-to-government deals with China for millions of tonnes of Thai rice had actually resulted in any shipments.
"Rice exports over the past two years to China were less than 400,000 tonnes and that was all handled by private companies," said Vichai Sriprasert, honourary president of the rice exporters association.
On Tuesday, the Commerce Ministry said China had cancelled a recent agreement to purchase 1.2 million tonnes of rice from Thailand, due to fears over the investigation.
"They are worried about corruption, because in China the penalty for corruption is very severe," TDRI rice expert Nipon Poapongsakorn said.