BAAC to meet over farmers’ fund target

BAAC to meet over farmers’ fund target

B20bn goal may be met by end of June

The board of the Bank for Agriculture and Agricultural Cooperatives (BAAC) is set to discuss next month whether it will raise the target for farmers' funds if the current 20-billion-baht target is achievable as expected by the end of June.

Local administrative organisations are now helping by putting their money into the funds set up to advance payments to rice farmers, said Luck Wajananawat, BAAC's president.

Farmers' funds fulfil a vital role in paying rice farmers who have not received payments for paddy pledged under the government's cash-strapped rice-pledging scheme for the 2013-14 main crop, which expired at the end of February, as it is uncertain if or when the government can borrow from banks, he said. The government's caretaker status prohibits it from borrowing.

Among the three funds — one for donation to farmers and the other two offering 0.62% annual interest and no interest — around 8.4 billion baht had been raised by Tuesday. The state-backed farm bank has spent 4.5 billion baht from the funds to pay farmers.

Of the total, 7.5 billion was contributed to the interest fund, 869 million to the interest-free fund and 25 million to the donation fund.

The BAAC aims for over 7,000 local administrative organisations to contribute 10% of their 200 billion baht in deposits to the farmers' funds.

"If each organisation deposits 1 million baht to the funds, some 7 billion will be added. Around 20 billion baht will be deposited if 10% of their deposits are moved to the funds," said Mr Luck.

More than 1 million farmers pledged 11.6 million tonnes of paddy worth 190 billion baht for the 2013-14 main crop, but only 99.5 billion has been paid to them so far, with 75 billion coming from the Commerce Ministry's rice sales, 20 billion from central budget borrowing and the remainder from the farmer funds.

However, the BAAC needs to discuss with the Commerce Ministry if it will raise the funds' target to assure depositors they will receive all their money back.

Mr Luck said the BAAC is expected to make an early repayment for the entire 20 billion baht borrowed from the budget by May 15. The Election Commission required the caretaker government to pay back the loan by the end of May.

To help farmers still waiting for pledging payments, the BAAC offered a six-month grace period for both principal and interest to 470,000 farmers who owed outstanding principal of 61 billion baht, and extended a special 7%-interest rate loan worth a total of 90 billion baht to 130,000 farmers.

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