30-year bond plan for rice debt

30-year bond plan for rice debt

The Finance Ministry plans to issue a 30-year bond partly to refinance debt incurred from the rice subsidies of previous governments.

The 30-year bond will account for a maximum of 10% of the debt, while the principal and interest will be paid for by the annual budget, said Finance Minister Sommai Phasee. 

As of last Friday, debt from rice subsidy schemes launched by previous governments amounted to 752 billion baht.

The Finance Ministry already set aside 39 billion baht in this fiscal budget to pay the principal, reducing the debt to 713 billion.

Of the 713 billion baht, 626 billion was borrowed by the Yingluck Shinawatra government for its rice pledging scheme, which set its pledging price 40-50% above market prices.

Prime Minister Prayut Chan-o-cha on Tuesday revealed the outcome of a nationwide rice audit led by ML Panadda Diskul, permanent secretary for the Prime Minister's Office.

Of the rice-pledging stockpile, only 10% of the 18 million tonnes is of good quality, as 70% is tainted with a yellow colour and the rest in bad condition and inedible.

The scheme is expected to cost the state 580-700 billion baht.

Mr Sommai said the debt burden from the rice subsidies would not affect fiscal policy, as the country's economy was large enough to cope.

Any delays in selling the stockpile could add to the spoiled rice total, but such sales could affect a corruption probe against some ministers in the Yingluck government, he said.

Mr Sommai believes the rice sales should be run in tandem with the investigation.

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