Payments totalling 20 billion baht borrowed from the central budget are expected to go into the hands of rice farmers from today, according to a source at the Bank for Agriculture and Agricultural Cooperatives (BAAC).
Kittiratt: Signed off disbursement
The amount is sufficient to pay about 170,000 farmers and payments are expected to be made within one month, the source said.
Even though the Election Commission (EC) approved the caretaker government’s request to spend the 20 billion baht in early March, the budget disbursement procedure appeared to be stalled because state officials from both the Finance Ministry and the Commerce Ministry were reluctant to sign off the use of the budget for fear of legal repercussions.
However, caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong recently decided to sign off the payments.
The caretaker government is obligated to pay back the loan to the central budget by the end of May so as not to incur any financial liability for the new administration.
Mr Kittiratt confirmed that he has already approved the disbursement from the central budget and it will soon be transferred to the state-backed BAAC, which is in charge of payments for the rice-pledging scheme.
Caretaker Deputy Prime Minister and Commerce Minister Niwatthamrong Bunsongphaisan said the ministry would pay back the full sum to the central budget ahead of May 31.
The ministry expects to raise 8-9 billion baht a month in February and March from selling rice in its inventory.
Mr Niwatthamrong said the ministry plans to open a new round of rice bidding today through the Agriculture Futures Exchange of Thailand after its plan to sell 240,000 tonnes of rice last week was suspended after the People’s Democratic Reform Committee (PDRC) cut off electricity at the Commerce Ministry.
Nearly 1 million farmers who pledged paddy worth a combined 116 billion baht under the rice-pledging scheme for the 2013-14 main crop from October last year to the end of February have been waiting for payment for months.
The government's caretaker status restricts it from taking out new borrowing, while proceeds from rice sales are insufficient to pay the farmers.
The caretaker government's efforts to seek loans of more than 100 billion baht from financial institutions and state enterprises faced setbacks due mainly to concerns over the borrowing's legitimacy.
The Thai Rice Farmers Network has given the caretaker government a week to make payments and says members will head to Bangkok to step up pressure on the government if it remains silent, head Taweesak Weerasak said.
He said farmers are suffering from the government’s overdue payments and must borrow money from loan sharks who charge 20% interest per month.
Many farmers have not received payments from the 712 million baht also approved by the EC to pay farmers who pledged their grain from the second crop of the 2012-13 season, he said, adding that only 500 growers from Ayutthaya were paid.
Mr Taweesak urged the caretaker government to shore up the falling price for rice produced in the second crop following its plan to release massive amounts from its stockpile to pay off farmers.
Paddy for the second crop is now priced at a mere 3,000 baht per tonne, while it costs farmers 6,500 baht per rai for plantation and another 1,500 per rai for rental. Each rai yields around 800kg of paddy.