Rice panel to mull urgent Bt140-bn loan for pledging
THE FINANCE MINISTRY will propose at today's meeting of the National Rice Policy Committee that the panel consider approving an emergency short-term loan worth Bt140 billion to finance the rice-pledging scheme.
Bank for Agriculture and Agricultural Cooperatives (BAAC) president Luck Wajananawat yesterday said the request would be raised at the meeting, and |that the loan would be used to cover rice pledging during the 2013-2014 harvest season.
If the committee approves the short-term loan, it will be forwarded for Cabinet consideration. If then approved by the Cabinet, the revolving fund for the rice-pledging scheme will be raised to Bt640 billion from the present Bt500 billion.
However, the increased funding would only be on a one-year temporary basis, before the fund reverted to the original level of Bt500 billion on December 31 next year.
If the proposal is approved, the Cabinet will need to revise the October 3, 2012 resolution that sets the limit on revolving funds for the scheme at Bt500 billion.
The BAAC, which is the key state-owned institution in charge of the pledging, has advanced Bt680 billion since the scheme was kicked off in 2011, said Luck.
However, the Commerce Ministry has brought in only Bt140 billion for rice sold from its stockpiles, which has lowered the outstanding amount owed to Bt540 billion. For now, there is no liquidity to finance pledging for the new season, even though more than 1.2 million tonnes have been harvested, he said.
Advance payments
If the funding proposal is approved by the National Rice Policy Committee, the BAAC board will convene tomorrow to approve the advance payments for the scheme.
This will later be replaced by the Finance Ministry’s loan and the BAAC will be entitled to interest payments from the government, he added.
Meanwhile, Deputy Prime Minister and Commerce Minister Niwatthumrong Boonsongpaisan said the government expected the country to export 7.5 million-8 million tonnes of rice this year.
Although rice prices have been falling, the government is still confident of reaching its export target for the year, of which about 2 million tonnes will be under government-to-government contracts during the remaining months, he said.
The minister refused to accept that the government faced a huge loss of Bt300 billion to Bt400 billion for the past two years of pledging.
He said more contracts were waiting to be inked next year, so the country should be able to export more rice and earn money to offset some of the losses from pledging.
“The pledging losses should be not |be more than Bt100 billion a year,” he insisted.
