BAAC predicts Democrat farmer policy adoption

BAAC predicts Democrat farmer policy adoption

Complex rice income guarantee scheme tipped

Rice planting at the Sufficiency Economy Learning Centre in Bangkok's Nong Chok district. (Photo by Apichart Jinakul)
Rice planting at the Sufficiency Economy Learning Centre in Bangkok's Nong Chok district. (Photo by Apichart Jinakul)

The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) expects the new government to adopt a farmers' minimum income guarantee as promised by the Democrat Party, which is tipped to fill the agriculture minister's seat.

The annual budget to fund the income guarantee scheme is estimated at 50-60 billion baht a year, on a par with the military-led government's income subsidy, said executive vice-president Somkiat Kimawaha.

The outgoing government approved a 56-billion-baht grant to 4.08 million farmers for rice harvest and quality improvements in the 2018-19 crop year, aiming at encouraging a delay in paddy sales to prop up prices.

The aid scheme for farmer covers four projects: a loan scheme for farmers who agree to delay their paddy sales and a grant for harvesting and price-quality improvement costs; a loan scheme for agricultural cooperatives to gather rice and add value to the grain; soft loans for farmers, farm institutes, including agricultural cooperatives and community enterprises to build rice barns and delay paddy sales to stabilise rice prices; and the 3% interest rate subsidy programme for rice traders who agree to keep hold their stocks.

Under the loan scheme for farmers who agree to delay their paddy sales and the grant for harvesting and price-quality improvement costs, the government gives grant 1,500 baht per rai for harvesting and price-quality improvement costs, capped at 18,000 per family and for up to 12 rai of farmland.

That is up from 1,200 baht per rai, capped at 15,000 baht per family on not more than 10 rai per family in the previous season.

Small-scale farmers registered with the Agriculture Extension Department are eligible.

Farmers are also entitled to earn 11,800 baht per tonne for hom mali fragrant rice, 10,200 a tonne for glutinous rice, 7,500 a tonne of white rice and 8,900 per tonne for Pathum Thani fragrant rice, if they agree to hold their paddy under the barn-pledging scheme.

Mr Somkiat said rice farmers in the Northeast received more grants than those living in other regions, with 27,000 farmers participating in the outgoing government's aid scheme and getting 28 billion baht in grants.

Democrat's income guarantee scheme, however, is more complicated than the current scheme as it needs to set the guaranteed rice price, the threshold the government will pay for difference if the market price is lower than the benchmark, he said.

As the paddy market price of hom mali fragrant rice is relatively high at 16,000-18,000 baht per tonne, a handful of farmers are interested in applying for the loan scheme to delay paddy sales, Mr Somkiat said, adding that rice cultivation zoning and low rice inventory boost paddy price.

He voiced confidence that the new government's policy to assist farmers will be implemented in the 2019-20 crop year, starting this November.

The state-backed farm bank provides crop insurance for rice, corn, dairy cattle and longan.

BAAC aims to provide rice insurance for 30 million rai of farmland this crop year, up from 27 million rai in 2018, Mr Somkiat said.

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