Kittiratt offers apology, says rice farmer payments coming soon

Kittiratt offers apology, says rice farmer payments coming soon

Caretaker Finance Minister Kittiratt Na-Ranong says rice farmers will be paid for their pledged paddy within seven days, blaming the late payments on the ongoing anti-government protests.

"The occupation of the Finance Ministry, the Budget Bureau and the Comptroller-General's Department by demonstrators for three weeks has delayed budget disbursement including payments to farmers in the rice pledging scheme," said Mr Kittiratt, also a caretaker deputy prime minister.

He defended the Bank for Agriculture and Agricultural Cooperatives (BAAC) over its lack of liquidity, saying the Budget Bureau and the Public Debt Management Office (PDMO) failed during the period to transfer money to the bank.

He said the situation is now back to normal, allowing the bank to pay the farmers within a week.

"I would like to apologise to the farmers for the tardiness," Mr Kittiratt said yesterday.

Most farmers who pledged rice under the main crop are now crying foul over late payments. The BAAC has refused to use its own liquidity to advance money to farmers without the National Rice Policy Committee's approval to widen the 500-billion-baht limit on outstanding spending.

While the government wanted to lower the outstanding spending incurred from the previous two harvest years to 500 billion baht at most, pledging for the current harvest estimated at 270 billion baht will cause combined spending to exceed the limit.

The state-owned BAAC has requested approval to waive the restriction.

Faster rice sales by the Commerce Ministry and new loans to the BAAC are two ways to speed up payments. But the situation is muddled by Prime Minister Yingluck Shinawatra's call for an early election, as regulations bar the caretaker government from using state financial resources before the election.

The PDMO recently provided a credit guarantee to the BAAC's 75 billion baht in bonds to fund the rice pledging scheme, but only 37 billion baht has been subscribed as investors fret over the political unrest.

Rice pledging, a key populist policy of the Pheu Thai Party, has drawn sharp criticism over hefty losses and pledging prices 40-50% higher than market prices.

Mr Kittiratt said the House dissolution means the government can buy paddy from farmers only in the main crop with spending of about 140 billion baht funded mainly by the BAAC's loans.

Since the main crop began in October, some 5.5 million tonnes of paddy worth 90 billion baht has been pledged under the government's rice scheme. The main crop runs through the end of February.

The BAAC has already paid more than 17 billion baht to farmers. Last week the bank said it had a mere 22 billion baht on hand until the end of 2013 to pay farmers who pledged rice for the current main crop.

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