BoT Governor Prasarn Trairatvorakul suggested that the Government instead allow the rice price to move in line with market mechanisms.
Meanwhile, in response to the Asian Development Bank (ADB)’s decision to downgrade Thailand’s annual gross domestic product (GDP) growth estimate to 4.1 per cent (See page 16), Mr Prasarn confirmed that the figure was comparable with the BoT’s projection.
Asked whether or not the central bank would adjust its own growth estimate, he said many factors would need to be taken into account before the decision could be revealed in the inflation report in October.
Up to four million rice farmers, more than half the country’s rice growers, have registered to take part in the rice mortgage scheme, said Luck Wajananawat, manager of the Bank for Agriculture and Agricultural Co-operatives (BAAC).
The registration came after the National Rice Policy Committee approved the rice mortgage scheme’s start-up for October 7 for in-season unmilled rice.
The scheme will include a survey on actual cultivated areas. Representatives from related government agencies will sign and certify farmers’ rice produced and quantity, so they can have their rice mortgaged according to the actual rice grown.
Mr Luck said BAAC will pay out loans to farmers no more than three days after their rice is mortgaged to the government and their registration documents submitted to the bank.
The Ministry of Commerce has forecast that around 25 million tonnes of rice would be harvested this year, despite flooding in many parts of Thailand. Farmers are aware of price drops as harvested rice affected by floods will be damp.
The BAAC manager said that the budget of B400 billion for the rice support scheme is divided into two parts.
The first is from the BAAC’s own liquid assets of about B90-100 billion for the mortgage’s first phase, which is until mid-December.
The budget’s second part of about B100 billion will comprise loans from state-owned banks, which are Krungthai, Siam City, TMB, and the Government Savings Bank.
The Ministry of Finance will be responsible for the loans’ principle and interest, Mr Luck said, noting that his bank’s liquidity of about B200 billion is sufficient to support government projects valued at around B150-160 billion, including the rice mortgage scheme and the national village fund at B40 billion. – NNT and MCOT