The Government Savings Bank’s 20-billion-baht loan to the Bank for Agriculture and Agricultural Cooperatives (BAAC) came under strong opposition by their labour unions yesterday, casting doubts on the government’s bid to begin paying farmers for the rice sold under the pledging scheme today.
Woravit: Loan is not for rice scheme
The caretaker govenment, however, insisted the farmers will gradually receive long-overdue money from today.
The labour union of GSB yesterday issued a statement calling the management to cancel the loan to the BAAC, saying the deal was undermining depositors’ trust for the bank.
It called on the management to seek the return of the transferred fund and suspend any lending that would affect confidence in the bank.
The union demands the management to immediately stop lending to the BAAC, call back previous loans provided to the BAAC and stop any transaction which will cause the clients’ confidence to erode.
The move came after a campaign on social networks to withdraw deposits from the GSB is spreading, following reports that the lending would be used to pay for the farmer’s rice pledging debts.
Representatives of the BAAC labour union said yesterday it was not clear where the money earmarked to pay the farmers came from.
The union was ready to take action if it turned out the cash came from the GSB’s loan.
At yesterday’s press conference, GSB president Worawit Chailimpamontri said the lending of 20 billion baht was not meant to support the troubled rice pledging scheme.
When the board was asked to approve the lending, there was “no request’’ that the money would be used to fund the rice pledging scheme, he said.
Of the total credit line, a few billion baht was transferred to the BAAC, he said.
Mr Worawit also asked the depositors not to withdraw their money from the bank following a report that the online community was urging people to withdraw and close their accounts with the GSB.
He said the lending will not put the depositors’ money at risk, adding that the GSB also extended interbank loans worth more than a hundred billion baht to 35 more banks.
Speculation was high that the cash would be used to pay the farmers’ debts as caretaker Commerce Minister Niwatthamrong Bunsongphaisan assured yesterday that the BAAC would today start paying the farmers.
According to the minister, the BAAC is expected to pay an average of 4 billion baht per day.
It is hoped the partial payment will take the heat off the government which needs about 130 billion baht to pay the more than 1 million farmers participating in the scheme.
Mr Niwatthamrong said the government has tens of billions of baht to pay off the debts. The sources of the fund come from loans and sales of rice stocks.
‘’Every branch of BAAC will pay on the basis of first-come-first-serve,” Mr Niwatthamrong said. “Those who pledged the rice first will be paid first. BAAC can pay an average of 4 billion baht per day.
‘‘So there is no need for farmers to come to Bangkok to protest. The money will be transferred to their accounts with the BAAC.’’
Mr Niwatthamrong said that the ministry expects to raise 7 billion baht from an auction of 460,000 tonnes of rice and a separate sale of 200,000 tonnes.
The Department of Foreign Trade organised an auction of 600,000 tonnes of rice on Wednesday and had a purchase order from overseas totalling 200,000 tonnes, he said.
This sale excluded another batch of 220,000 tonnes of the rice put on the Agricultural Futures Exchange of Thailand (AFET), he said.
The sale through AFET is expected to fetch more than 1 billion baht.
Caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong wrote on his Facebook page that every farmer under the rice-pledging scheme will receive the full amount of money based on their rice pledging documents.
The Finance Ministry and the BAAC has a joint duty to pay the money to the farmers as soon as possible.
‘’The government would like to confirm our sincerity in fully working for the farmers. Now, this is an occasion that will show who is sincere with farmers and who is trying to use the farmers’ sufferring as political tools,’’ he wrote.
However, the minister’s assurance failed to encourage the farmers to return home.
Rawee Rungruang, leader of a network of rice farmers from six western provinces, said the caretaker government is buying time.
Mr Rawee said that the farmers will today rally at the Office of the Defence Permanent Secretary to demand the government pay the debts within seven days.