Thai govt to accelerate bank borrowing to make rice payments to farmers

Chavalit Chookajorn (L), permanent secretary of the Thai Ministry of Agriculture and Cooperatives, throws rice grains while dressed in a traditional costume during the annual Royal Ploughing Ceremony, in central Bangkok May 9, 2014. The country's fin
Chavalit Chookajorn (L), permanent secretary of the Thai Ministry of Agriculture and Cooperatives, throws rice grains while dressed in a traditional costume during the annual Royal Ploughing Ceremony, in central Bangkok May 9, 2014. The country's finance ministry will invite banks to offer terms for loans to pay rice farmers who have waited months for money owed under a state buying scheme. --PHOTO: REUTERS

BANGKOK (REUTERS) - Thailand's finance ministry said on Friday it would invite banks to offer terms for 50 billion baht (S$1.8 billion) in loans on June 3, earlier than planned, so it can pay rice farmers who have waited months for money owed under a state buying scheme.

The plan has been pushed forward due to faster-than-expected payments to farmers since a military government took power on May 22, Chularat Suteethorn, head of the ministry's public debt management office, told reporters.

The ministry had planned to open bidding for a three-year loan for 30 billion baht on June 6 and for another for the remaining 20 billion baht on June 13.

"We will discuss with banks whether they can give us the whole loan on June 6," Mr Chularat said, which would allow three days for the ministry to choose banks and receive the transfers.

The loan will help cover total arrears of about 90 billion baht owed to around 800,000 farmers.

They were left unpaid for months because a caretaker government did not have the authority to get funds from the budget or from banks.

After months of political turmoil, the military overthrew the government and its administration has the power to secure funds. It has made paying the farmers one of its priorities.

Mr Chularat said the state farm bank that manages the rice scheme was paying out as much as 9 billion baht a day, more than double the 4 billion baht expected. It is using money from its reserves initially.

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