Thai Govt to Offer $615 Million of Debt to Help Fund Rice-Subsidy Scheme
Bangkok – Thailand’s caretaker government plans to sell up to 20 billion baht ($615 million) of short-term debt this week to help fund a controversial rice-buying scheme, according to documents seen by Reuters on Wednesday. The Finance Ministry’s Public Debt Management Office (PDMO) will auction eight-month, state-backed paper on Thursday, according to a letter sent by the PDMO inviting the Metropolitan Waterworks Authority to bid.
PDMO officials were not available for comment. The proceeds would be for the Bank for Agriculture and Agricultural Cooperatives (BAAC) to pay rice farmers, some of whom have been waiting months for payment for crops sold to the government program. The state-owned BAAC manages the scheme, which has run into funding problems, compounded by political unrest that has left a caretaker government with little power to raise money.
As of February 24, the government had bought 11.02 million tonnes of rice from the 2013/14 main crop valued at 185 billion baht, a BAAC official told Reuters on Wednesday. The bank had paid farmers 69.5 billion baht of that, with 115.5 billion baht still outstanding, the official said, declining to be identified because he was not authorized to speak to the media.
The arrears have built up because the government has been unable to sell enough rice from its stockpiles. Prime Minister Yingluck Shinawtra dissolved parliament in December to try to end a protracted political crisis. A general election was held on February 2 but that was disrupted by anti-government protesters, leaving a caretaker administration with limited powers to borrow or use government funds for the rice scheme. (Reuters)