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Thai govt seeks $5 billion in loans to fund rice-buying scheme

Published on Jan 29, 2014 4:10 PM
Workers at the Udon Permsin rice mill piling up sacks full of rice to for storage in the north-east province of Udon Thani, Thailand January 21, 2014. -- FILE PHOTO: REUTERS

BANGKOK (Reuters) - The Thai government, struggling to fund a controversial rice-buying scheme, will seek bridging loans of 130 billion baht (S$5 billion) to pay farmers who have been waiting months for their money, a state farm bank official said on Wednesday.

Farmers have been blocking roads in protest at the late payment in some provinces and some have threatened to join anti-government protests in Bangkok.

The government, acting through the state Bank of Agriculture and Agricultural Cooperatives (BAAC), is paying farmers well above the market rate for their rice. This has priced Thai grain out of export markets and the government has been unable to sell enough to replenish the buying fund.

"The Finance Ministry will guarantee another 130 billon baht loan for the BAAC to borrow. We have sent invitations to domestic financial institutions and a first auction is due to start on Jan. 30," Mr Wanchai Siriwatanatrakul, a director in charge of government policies at BAAC, told Reuters.