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CPD chief proposes 3-point plan as alternative to price-guarantee scheme

Aug 21. 2019
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By THE NATION

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The Cooperative Promotion Department (CPD) has come up with a three-point plan to fix the problem of farmers’ debts instead of having them rely on the government’s price-guarantee policy, which is now useless considering that most crops have been destroyed by the drought.

CPD director-general Phichead Wiriyaphaha said this year’s drought has been serious and has already destroyed most crops in several regions. 

“This renders the price-guarantee policy useless as farmers don’t have anything to sell. As a result, many will not be able to pay the debts they owe to agricultural cooperatives,” he said. 

Phichead added that agricultural cooperatives have accumulated debts of Bt175 billion, of which Bt163.5 billion is from members of agricultural cooperatives, Bt590 million from fishery cooperatives, Bt8.2 billion from land cooperatives, and Bt2.6 billion from other cooperatives.

“The agricultural cooperatives expect non-performing loans [NPLs] worth up to Bt41.6 billion,” he said. “The main reason behind this is the drought and the rise in production cost since the start of this year.”

In order to battle this debt problem, the director-general has proposed a three-point plan: 

1) Categorising the source of funds and adjusting the interest rate and loan policies accordingly, such as reserving short-term funds for short-term borrowers etc;

2) Encouraging cooperative members to find additional income sources by providing loans for new businesses; and 

3) Formulating debt-restructuring measures such as reducing interest and fines or providing debt-relief programmes.

Phichead added that CPD has earmarked Bt1.6 billion for five-year loans at 1 per cent interest for cooperatives that want to dig artesian wells and ponds to help farmers earn extra income from farming alternative crops. 

“CPD realises that water is key to helping farmers get back on their feet and not be too burdened with debts,” he said.

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