Rice policy committee terminates rice-pledging scheme

The National Rice Policy Committee decided to terminate its rice pledging scheme which is due to expire end of February 2014 as it does not want to commit further burden to the government.

The decision was made at the meeting of the committee of which the caretaker prime minister Yingluck Shinawatra is the chairperson.

The meeting did not discuss how to raise fund to finance the scheme  but reached a resolution not to extend the scheme which expires end of next month.

Decision of the committee came a day before Finance Minister Kittirat na Ranong will meet the Election Commission Tuesday to convince the commission to allow the caretaker government to burrow 130 billion baht to pay farmers for the rice they sold to government under the pledging scheme.

Part of the fund will come from the Bank for Agriculture and Agricultural Cooperatives and from the Government Savings Bank.

But today the BAAC executive Mr Suvit Triratsirikul has revealed that the bank’s board of directors has withdrawn the topics from the meeting’s agenda pending the decision of the EC tomorrow.

Earlier the bank union and all its employees wore black to protest the board’s move to finance the scheme using its liquidity as sought by the finance minister.

They insisted that the bank’s liquidity could not be used to pay for farmers except money deriving from rice sales.

However the bank has a remedy measure to help farmers by providing 10 billion baht soft loan for farmers to borrow with a charge of 7% as interest.

Each farmer will be allowed to borrow not more than 20% of the face value on their rice vouchers. For farmers who still default their debt repayment, the bank will  give  a one year extension for the loan repayment with no fine.

Mr Worawit Chailimpamontri, Director of the Government Savings Bank, also declared that the bank will not authorize a loan to the government to settle payment for the pledging scheme.  The Bank reasoned that although it sympathized with the farmers’ plight, issuing loans of this nature is not within the bank’s policy.

Meanwhile Deputy Commerce Minister Yanyong Puangraj said the government has no intention of defaulting on payments to farmers, claiming that a far amount of red tape is required before payments can be made.

He also said the ministry is currently consulting with the Election Committee on the matter.

He said  whether the government will be able to settle all payments within the 25 January 2014 deadline is dependent on the Election Committee’s decision.