The board of the Bank for Agriculture and Agricultural Cooperatives (BAAC) has agreed to alleviate the debt burden of farmers owing a combined 116 billion baht through debt forgiveness and payment rescheduling.
The 818,000 farmers who will join the programme must be saddled with debt owed to the state-owned farm bank of up to 500,000 baht each, said president Luck Wajananawat.
The scheme runs through March 31, 2016.
The government recently agreed in principle to instruct the state-owned bank to ease the debt burden of farmers suffering from economic doldrums, drought and falling crop prices.
Under the scheme, the bank will write off all 4 billion baht in outstanding debt owed by 28,000 farmers who are disabled, chronically ill or deceased.
The BAAC will also restructure 48 billion baht in debt owed by 340,000 farmers who have proved they are drowning in debt but able to work.
The bank will reschedule the debt repayment period to up to 10 years with a three-year grace period and charge debtors the minimum retail rate, now at 7%.
Debt relief will also be extended to 450,000 farmers affected by the government's request to refrain from growing the second rice crop during the dry season and those hit by the rubber price slump.
These farmers shoulder a collective 64-billion-baht debt owed to the bank.
Moreover, the BAAC will provide 35 billion baht in loans to financially squeezed rice and rubber farmers who have switched to other agricultural products or changed careers.
For other farmers who are ineligible for debt relief but have a good repayment track record, the bank will lower interest rates and offer emergency loans.