Thailand needs more money for rice subsidies

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thai-rice-warehouseThailand may need to raise new funds for its disputed rice buying scheme as it has fallen behind schedule in repaying the state bank that runs the scheme, bank officials were quoted as saying by Reuters.

The Thai government has been buying rice at prices way above the market since October 2011 and spent a total of $21.3 billion according to government figures. The policy, aimed at helping poor farmers, has priced Thai rice out of export markets and cost Thailand its crown as the world’s top rice exporter.

The scheme resulted in stockpiling a massive amount of rice, estimated at 17 million tonnes.

The Bank for Agriculture and Agricultural Co-operatives (BAAC), which funds the scheme, said the government has only repaid $4.4 billion so far, well short of the $6.9 billion it has pledged to pay back by the end of 2013.

BAAC is now forced to borrow money to be able to continue funding the scheme, despite Thai Prime Minister Yingluck Shinawatra saying the government was not considering further loans because it would have “enough money” from selling rice from its stocks to fund the scheme.

The cabinet has said it would spend no more than $8.4 billion baht for the scheme in the harvest year from October 2013 to September 2014. Early this month, Commerce Minister Niwatthamrong Boonsongphaisan said, “Since the cabinet has approved the budget for the scheme, it is the duty of the Finance Ministry to figure out how to get the money.”

The BAAC said that the rice pledging scheme occurred losses of around $4.25 billion in the 2011/12 crop year. Accurate date is hard to come by as the government has stopped publishing monthly rice export data since the intervention scheme started.

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Reading Time: 1 minute

Thailand may need to raise new funds for its disputed rice buying scheme as it has fallen behind schedule in repaying the state bank that runs the scheme, bank officials were quoted as saying by Reuters.

Reading Time: 1 minute

thai-rice-warehouseThailand may need to raise new funds for its disputed rice buying scheme as it has fallen behind schedule in repaying the state bank that runs the scheme, bank officials were quoted as saying by Reuters.

The Thai government has been buying rice at prices way above the market since October 2011 and spent a total of $21.3 billion according to government figures. The policy, aimed at helping poor farmers, has priced Thai rice out of export markets and cost Thailand its crown as the world’s top rice exporter.

The scheme resulted in stockpiling a massive amount of rice, estimated at 17 million tonnes.

The Bank for Agriculture and Agricultural Co-operatives (BAAC), which funds the scheme, said the government has only repaid $4.4 billion so far, well short of the $6.9 billion it has pledged to pay back by the end of 2013.

BAAC is now forced to borrow money to be able to continue funding the scheme, despite Thai Prime Minister Yingluck Shinawatra saying the government was not considering further loans because it would have “enough money” from selling rice from its stocks to fund the scheme.

The cabinet has said it would spend no more than $8.4 billion baht for the scheme in the harvest year from October 2013 to September 2014. Early this month, Commerce Minister Niwatthamrong Boonsongphaisan said, “Since the cabinet has approved the budget for the scheme, it is the duty of the Finance Ministry to figure out how to get the money.”

The BAAC said that the rice pledging scheme occurred losses of around $4.25 billion in the 2011/12 crop year. Accurate date is hard to come by as the government has stopped publishing monthly rice export data since the intervention scheme started.

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