NCPO OKs loan scheme for farmers

NCPO OKs loan scheme for farmers

The military regime has endorsed a 4.8-billion-baht financial package funded by the fiscal 2015 budget to help farmers reduce production costs during the 2014-15 crop season.

Yongyuth Maiyalap, spokesman for the National Council for Peace and Order, said the NCPO yesterday approved the measures proposed by the Bank for Agriculture and Agricultural Cooperatives (BAAC) to help farmers cope with low paddy prices.

The measures include a special loan scheme that charges borrowers three percentage points below the minimum lending rate for six months.

The BAAC programme will cover 3.57 million farmers at up to 50,000 baht each.

The NCPO has earmarked 2.29 billion baht to offset the low interest rate.

Under the plan, cooperatives will be told to secure 700 million baht in loans from the BAAC for buying 3-4 million tonnes of paddy directly from farmers to process and pack the milled rice into bags for sale.

Mr Yongyuth said another 1.1 billion baht would be lent to farmers with silos in the Upper North and Northeast to delay selling up to 2 million tonnes of their paddy, a move that should prevent the market price from falling further.

Entrepreneurs, meanwhile, will be encouraged to maintain their stocks for six months after paddy purchases during the season.

The junta has sought to address falling paddy prices through cuts in production costs, ruling out cash subsidies such as the failed rice-pledging scheme.

The NCPO also plans to stabilise the paddy price for 25% moisture content at 8,500 to 9,000 baht a tonne, while its goal for Hom Mali rice is 13,000 to 14,000 baht a tonne.

Paddy rice production for the 2014-15 second crop is estimated at 28 million tonnes, with 20 million due to be released to the market and 8 million for farmers' consumption and rice breeding.

In other news, the NCPO yesterday approved extending the current 7% value-added tax (VAT) rate for another year when it expires at the end of September.

Without action, the VAT would have risen to 10%.

The junta also approved extending the current personal and corporate income tax rates, which were set to expire at the end of 2014, for one more year.

The former Yingluck Shinawatra government temporarily lowered the corporate income tax to 20% from 30% and cut personal income tax to help middle-income earners.

The lowest tax rate is now 5%, half the previous rate, while the highest rate was trimmed to 35% from 37%.

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