The Bank for Agriculture and Agricultural Cooperatives (BAAC) has mulled two options to ease the burden on farmers caused by rising chemical fertiliser prices, says bank president Tanaratt Ngamvalairatt.
He said the BAAC will propose one of the options for the bank board's consideration this month.
Mr Tanaratt said the first option is to waive interest on loans for buying chemical fertiliser for two years, with the bank asking the government to take responsibility for this interest.
The other option gives farmers a two-year grace period on loan repayment, with instalments starting the third year and running until the fifth year.
The chemical fertiliser price has soared 87% from 10,000 baht per tonne to 18,700 baht per tonne as a result of the Russia-Ukraine war.
Russia is one of the largest chemical fertiliser producers.
Last year the value of chemical fertiliser imports stood at 56 billion baht.
According to Krungthai Compass, a research house under Krungthai Bank, last year Thailand imported 440,000 tonnes of chemical fertiliser from Russia worth 5.6 billion baht, accounting for 8% of Thailand's total fertiliser imports.
Thailand imported 1.25 million tonnes of fertiliser from China worth 17 billion baht, accounting for 23% of total fertiliser imports.
Thailand also received 840,000 tonnes of fertiliser from Saudi Arabia worth 10.7 billion baht, representing 15% of the total.
Mr Tanaratt said loans for farmers to buy chemical fertiliser account for 30-35% of the BAAC's outstanding loans of 560 billion baht.
In its accounting year of 2022/23 beginning on April 1, BAAC targets extending new loans worth 35 billion baht, roughly the same level as the previous year.
The bank wants to reduce non-performing loans to 4.5% of outstanding loans from 6.63% the previous accounting year, he said.