Extra budget funds for rice pledging

The cabinet will on Tuesday consider an extra budget allocation for the rice pledging scheme because the second crop harvest will be larger than expected.

Boonthai Kaewkhantee, an executive vice president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), said last year's big flood had reduced the size of the main crop during the 2011/2012 harvest.

Many farmers then rushed to plant a second crop, which would be harvested soon, along with the main crop.

The cabinet needed to increase the ceiling amount of the second crop to enter the pledging scheme to 14 million tonnes, up from the earlier approved figure of 13.31 million tonnes.

With more paddy in the programme, the government will need an additional 21 billion baht to buy the rice, or a total of 214 billion baht, compared with 193 billion baht approved earlier.

Mr Boonthai said more than one million farmers had already pledged their second crop, a total of 12.8 million tonnes, to the government for 190 billion baht, but a survey indicated that another one million tonnes still remained with farmers who want to join the programme.

The government is also running the paddy pledging scheme for the main crop of the 2012/2013 harvest from Oct 1 until Sept 15 next year. This programme will require a total of 240 billion baht for an estimated 15 million tonnes of paddy.

The pledging price is 15,000 baht for a tonne of unmilled white paddy and 20,000 baht a tonne for unmilled fragrant paddy, subject to moisture content adjustment. The money is paid to farmers through the BAAC.

Mr Boonthai said the bank has budget funding to cover the required 240 billion baht for the pledging scheme of the main crop from the main harvest. Of this, 150 billion baht is loans guaranteed by the Finance Ministry and 91.8 billion baht to be repaid by the Commerce Ministry from selling the rice stockpile.

Pranee Siriphand, director-general of the Commerce Ministry's Foreign Trade Department, said another 30 billion baht will be paid to the BAAC this week. It paid back 11 billion baht in late September. The department plans to repay a total of 85 billion baht by year's end.

About the author

Writer: Wichit Chantanusornsiri
Position: Business Reporter