The Public Debt Management Office (PDMO) will be required to refinance 150 billion baht of debt from the rice subsidy scheme of the previous government in fiscal 2015, which starts tomorrow.
Debt of 180 billion baht of the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) from the subsidy scheme is due in the next fiscal year.
Luck: Bringing down rice scheme debt
The PDMO has already set aside 30 billion baht for principal payment in the annual budget, leaving 150 billion for refinancing, president Luck Wajananawat said.
He said the PDMO had also set aside another 50 billion baht in fiscal 2015 for interest payments on the debt from subsidy schemes for agricultural products.
Liabilities incurred from the subsidy schemes for farm products by previous governments amount to 780 billion baht, the lion's share stemming from the rice subsidy.
Of the total of 780 billion baht, 580 billion resulted from the costly rice-pledging scheme sponsored by the Yingluck Shinawatra government and the rest from preceding governments.
The Pheu Thai government's rice subsidy, which offered a pledging price 40-50% above market prices, cost 878 billion baht since it was unveiled in the 2011-12 main crop, with 580 billion worth of debt left over.
The rice-pledging scheme suffered setbacks when it failed to boost market prices.
Several million tonnes of milled rice have been kept in thousands of warehouses in accordance with the government's belief that withholding a large supply from the market would raise prices.
Mr Luck said the Finance Ministry would be able to bring down the debt of the rice-pledging scheme to below 500 billion baht by next September to comply with the Yingluck cabinet's resolution, as it had set aside 30 billion baht in the fiscal 2015 budget.
Another 50 billion baht will come from the Commerce Ministry's sale of stockpiled grain.
Earlier, the state-backed farm bank estimated that debt incurred from the rice-pledging scheme alone would be paid off in the next seven years, assuming that 70-80 billion baht would be set aside in the following years' budgets for interest and principal payments and the Commerce Ministry could generate 50 billion baht from rice sales each fiscal year.
However, Deputy Prime Minister MR Pridiyathorn Devakula recently said he had instructed the Finance Ministry to look for a solution to reschedule paying the 500 billion baht for 30 years through bond issues.
In a related development, he said the bank had closed its three 14-billion-baht funds set up to help unpaid farmers for their pledged grain after Ms Yingluck, as head of the caretaker government, had no authority to borrow at that time.
The funds have been used to pay 300,000 farmers.
The first fund was simply a donation account, so those who transferred money to this account will not receive any refund.
The second fund offered no interest, but depositors will get back the principal when the fund is closed, while the third fund gave 0.63% interest with the principal to be repaid.
The BAAC yesterday launched a new 11-month deposit product, which runs until next Aug 31, with a 3% rate to those who donated and deposited in the first and second funds.
The product is also exempt from withholding tax for obtained interest.
The BAAC recently approved a loan of 17 billion baht to farmers in the Northeast and Upper North who have rice barns in return for hoarding a combined 2.4 million tonnes of rice for a certain period in order to slow the release of grain to market and ease pressure on market prices.