BAAC earmarks Bt5 bn for farmers to grow trees

By Kunanon Kanjanatecha
The Nation

 

Prasit Techati

 

Apirom Sukprasert, president of the Bank for Agriculture and Agricultural Cooperatives (BAAC), said the bank is launching a brand-new loan allowing farmers to earn from planting trees in a move to boost their quality of life as well as preserve the environment.

 

The project will target 800 square kilometres and 50,000 farmers who can participate in the “Planting Trees to Make an Income” project, which encourages farmers to plant trees for reforestation. Each farmer will be provided a loan of Bt100,000 from the Bt5 billion allocated for the scheme. 

 

Participants will be given loans at a minimum retail rate of 6.875 per cent per year. For the first three years the rate will be minus 3 per cent, for the fourth to the sixth year the rate will be minus 2 per cent and minus 1 per cent in the last two years. Loans will only be available until July 31, 2021 and can be taken for no more than 15 years. 

 

Prasit Techati, a BAAC customer development officer in Nan province, said the aim of the project is to have locals preserve forests especially those upstream in the northern provinces of Chiang Mai, Chiang Rai and Nan. 

 

Forests provide locals with more products from different types of plants and more species of trees to use and sell. By planting trees and harvesting them, farmers can make their incomes more sustainable than by just focusing on mono crops like corn and sugarcane.

 

Provinces in the North like Nan have been suffering from deforestation as locals have been cutting down trees to expand farming areas. This project aims to help locals co-exist peacefully with forests.

 

Source: https://www.nationthailand.com/business/30376800

 

-- © Copyright The Nation Thailand 2019-09-27

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Growing trees is always a good idea but how long does it take to get a return on the investment after taking out the loan. Trees don't grow in 5 minutes and are a long term investment so while the farmers are waiting for the trees to grow to make some money how do they make their loan repayments?

Never mind, while they are going through the process of bankruptcy they can live happily in the knowledge that..........."this project aims to help locals co-exist peacefully with forests". Presumably meaning the ones who haven't taken out the loans.

Eucalpt tree is around 4 years to grow, many cut down after 2 years with need for money,

 

so 15x year loan at decreasing interest of the 3, 2, 1,  still leaves as a basis (without the 3 year discount then the 4th -6 year , then the final 2 years),

 

 leaves .875 over the 15 years = 13.125% + the difference of the discount years

hard to see where the farmers gain money in their pocket.

6.47% I think is the lending rate over the full term, 

but I can be corrected, 

cheers.

"Participants will be given loans at a minimum retail rate of 6.875 per cent per year."

Whether it's a diminishing interest loan or as it is stated....it's an outrageous amount to charge the poor farmers.

Interest rates are globally around 2%....making bank loans ~4-5% for say, a house purchase.

Maybe they could give them loan repayment discounts if they plant and nurture trees...

   YES, just like the poor quality <deleted> rubber trees they encouraged farmers to buy andlant years ago.

Trees remove carbon from the air and give us oxygen so how about oxygen as a farming product paid for with government funds.

The BAAC is not the farmers friend. If you don't have a credit history the maximum you can borrow is 30k baht and the interest is up around 10-11 percent.  Pay that out and apply for a bigger loan up to 100k baht at 8.5-9.5 percent.  Pay that it and you can get...maybe...up to 200k at 7 percent.  I thought it was supposed to help farmers! Plus you have to pay insurance on the loan amount.  

 

6 minutes ago, Muhendis said:

Trees remove carbon from the air and give us oxygen so how about oxygen as a farming product paid for with government funds.

I think it is a good idea that the scheme should include a form of carbon credit whereby carbon market can be created to allow carbon credit to be sold to companies that need to offset their emission. This should also extend to the farmers as a way for them to earn some extra money. They are doing a lot for the environment but not financially appreciated.