Farm bank invites Thais to put money into rice fund

by Reuters
Thursday, 27 February 2014 11:49 GMT

BANGKOK, Feb 27 (Reuters) - Thailand's farm bank is setting up a fund to help pay farmers who have not been paid for rice sold to a state buying scheme and it is asking for savings or even donations from the public to finance it, the bank's president said on Thursday.

Some farmers have been waiting months for payment for crops sold to the state programme, which is managed by the state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC).

The government has had difficulty selling the rice from its stockpiles so the scheme has run into funding problems, compounded by political unrest that has left a caretaker administration with little power to raise money.

Prime Minister Yingluck Shinawatra is facing charges of negligence relating to the rice scheme, whose mounting losses have fuelled the anger of those protesting against her government in Bangkok.

The BAAC aims to raise 20 billion baht ($615 million) for its new fund from March 3 to June 30, Luck Wajananawat told reporters after a board meeting.

Outright donations will be welcome. Otherwise, savers will get their money back on Dec. 31 or possibly earlier, remunerated at an annual rate of 0.63 percent, which people can opt to waive.

Luck said the bank would kick off the fund with a donation of 10 million baht and then contribute another 100 million.

On Thursday, the Finance Ministry's Public Debt Management Office (PDMO) auctioned eight-month, state-backed paper worth 20 billion baht ($615 million) to replenish the rice scheme. The result has not been made public.

Luck said the board had been informed of the PDMO auction but not the result, and it did not discuss any BAAC debt issue plan.

As of Feb. 27, the BAAC had paid farmers 67.5 billion baht for rice bought during the main 2013/14 crop from October, with 112 billion baht still outstanding, it said in a statement, slightly lower figures than those given by a bank official to Reuters on Wednesday.

A general election was held on Feb. 2 but was disrupted by anti-government protesters, leaving a caretaker administration with limited powers to borrow or use government funds for the rice scheme.

Some spending has to be approved by the Election Commission and on Tuesday it authorised 712 million baht to be used from a central budget to pay farmers.

After a cabinet meeting the same day, Commerce Minister Niwathamrong Boonsongpaisan said the government would seek approval to use an additional 20 billion baht from the budget, adding the finance ministry was still working on securing "a large loan" to help with rice payments.

The Commerce Ministry sold 600,000 tonnes of rice from its stocks this month to raise funds and has opened a second tender for another 500,000 tonnes. It is also selling smaller amounts on the Agricultural Futures Exchange of Thailand. ($1 = 32.5450 Thai baht) (Reporting by Kitiphong Thaichareon; Writing by Orathai Sriring; Editing by Alan Raybould and Ron Popeski)

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