BAAC lowers estimate of fund needed for pledging scheme

Severe flooding is expected to reduce rice production by 5 million tonnes from the previous estimate of 25 million tonnes, Boonchuay Chiadamrongchai, BAAC executive vice president, said yesterday.
The government starts its rice-pledging scheme today.
He said the government might need to buy only 20 million tonnes of rice under the pledging scheme to boost the price to Bt15,000 per tonne of white rice and Bt20,000 per tonne of fragrant rice. Therefore, it may spend about Bt350 billion rather than Bt410 billion as forecast previously.
The cost could be less if the government can release the rice stockpile faster, he noted.
BAAC has liquidity of Bt90 billion to finance the scheme. That liquidity is expected to run out by mid-November, he said. Then the bank will borrow from other state banks and the loans will be guaranteed by the Finance Ministry.
BAAC has also earmarked Bt10 billion for loans to farmers who want to rehabilitate their farms and houses damaged by flooding, Boonchuay said.
Somchai Jitsuchon, research director of the Thailand Development Research Institute, said the rice pledging would cost taxpayers more than Bt100 billion. He said only a few rich farmers, millers and exporters would gain while the large majority of poor farmers would not benefit from the scheme.
Meanwhile, Deputy Finance Minister Viroon Tejapaibul said that as of Tuesday, flooding had claimed 237 lives, but only 19 victims had life insurance, with a combined worth of Bt3.77 million.
A total of 639 cars had been damaged and insurance companies had sent 90 per cent of them to repair shops. Damage to insured property is estimated at about Bt268.05 million, Viroon quoted a report by the Office of the Insurance Commission as saying.
He said he had asked insurance companies to speed up their compensation payments to flood victims.