The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) has set aside more than 80 billion baht in loans and grants for rice farmers who delay selling their paddy to stabilise prices.
"The BAAC estimates farmers will apply for loans worth 70 billion baht out of 83.7 billion in credit and subsidies. The loans will be drawn down later this year and early next year. The money not only helps stabilise rice prices but also boosts liquidity in the economy," said Nukul Pharachat, senior executive vice-president.
The 83.7-billion-baht loan and grant scheme will be extended through a 21-billion loan scheme to delay selling paddy for the 2017-18 harvest season, a 3-billion set for cash handouts to farmers who store their paddy in barns for a designated period, a 12.5-billion loan for agricultural institutions that buy paddy from members to add value to product, and a 47.3-billion grant to 3.9 million rice growers who signed up with the Department of Agricultural Extension to subsidise their harvest costs.
Under the lending scheme to slow down paddy sales, the state-back farm bank offers credit based on average rice prices for the past three years -- 10,800 baht a tonne will be offered for hom mali and glutinous paddy, 7,200 per tonne is slated for white-rice paddy and 8,500 per tonne will be given for Pathum Thani fragrant paddy.
Retail rice farmers are each limited 300,000 baht in loans, while agriculture cooperatives, farmer clusters and community enterprises are capped at 300 million, 20 million and 5 million, respectively.
The government will subsidise interest worth a combined 453 million baht but borrowers who do not repay loans from the BAAC within five months after the loan is taken out must shoulder the remaining interest.
The loan is expected to be doled out from today to Feb 28, 2018. The programme is expected to help delay about 2 million tonnes of paddy sales during the annual harvest season.
Participating farmers who agree to hold their paddy will receive 1,500 baht a tonne, while all rice farmers will be granted 1,200 per rai for harvesting and rice-quality improvement costs, capped at 12,000 per family.
"The schemes are expected to be able to delay selling a higher-than-expected volume of paddy to stabilise prices. The paddy price stands at 11,550-13,000 baht a tonne. The BAAC will approve and be ready to extend the loan within three days," he said.