Bt22 bn rice-scheme payments for Dec face delay

[webfact]

RICE-SCHEME
Bt22 bn rice-scheme payments for Dec face delay
Suphannee Pootpisut
The Nation

BANGKOK: -- About Bt22 billion remains to be paid under the rice-pledging scheme for this month only, but if there is no new money from rice sales or borrowings coming in, payment may be delayed, according to the Bank for Agriculture and Agricultural Cooperatives.

"We will gradually make payments from the remaining funds we have," Luck Wajananawat, president of the BAAC, said yesterday.

"Recently, the Commerce Ministry repaid Bt162 billion and the Budget Bureau allowed the bank to disburse Bt50 billion for payments. We have paid about Bt170 billion to farmers and there remains about Bt20 billion for more payment in December," he said.

As of Tuesday, the bank had paid farmers about Bt17 billion or Bt2 billion per week on expectation that it would have enough funds for payment by the end of this month.

The payments are for the 2013-14 harvest.

This month, the Commerce Ministry will repay about Bt13 billion to the bank. About Bt7.1 billion of that will come from the budget for the blue-bag rice project and Bt6 billion from rice sales. With this injection plus its existing funds, the bank will have about Bt22 billion available for rice-pledging payments.

Rice sales and borrowings from the Public Debt Management Office (PDMO) were the BAAC's sources of money for payment. There remains Bt45 billion waiting for PDMO borrowings, while the ministry has insisted that rice sales will continue until September of next year and Bt95 billion in proceeds would go to the BAAC.

The Cabinet has not approved BAAC's special provision and extension of its Bt500-billion borrowing limit.

If the remaining funds for the project are used up with no new money coming in, farmers can borrow about Bt10 billion from the bank and use that for their new crop.

Farmers have submitted rice-pledging documents for almost six million tonnes worth Bt90 billion. About 11 million tonnes of in-season rice are expected to be included in the rice pledging scheme for this harvest with Bt150 billion expected for payment.

The BAAC meets the Bank of Thailand, Auditor-General's Office and other economic agencies on a regular basis, providing them information about the bank's current performance and state projects' implementation.

"These agencies will assess us and we are ready to listen to their suggestions," he said.

There is no problem with liquidity, as the bank has about Bt180 billion.

For the first eight months of this year, BAAC recorded rises of 4-5 per cent in its assets and 3 per cent in its deposits. Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion. The bank posted Bt6 billion in profit and expects to earn Bt8 billion for the whole year.


-- The Nation 2013-12-13

[davehowden]

"About Bt22 billion remains to be paid under the rice-pledging scheme for this month only, but if there is no new money from rice sales or borrowings coming in, payment may be delayed"

BUT

"There is no problem with liquidity, as the bank has about Bt180 billion., according to the Bank for Agriculture and Agricultural Cooperatives."

Now call me old fashioned, but <deleted> is going on?

[Thai at Heart]

I am watching "question time ",from Johannesburg and the people are roasting the ANC.

Oh I wish thailand could have the same system.

[whybother]

"About Bt22 billion remains to be paid under the rice-pledging scheme for this month only, but if there is no new money from rice sales or borrowings coming in, payment may be delayed"

BUT

"There is no problem with liquidity, as the bank has about Bt180 billion., according to the Bank for Agriculture and Agricultural Cooperatives."

Now call me old fashioned, but <deleted> is going on?

The government only borrowed a certain amount. "If there is no new money from rice sale or borrowings ...". It is saying that the government loan has reached it's limit, so unless they sell more rice or borrow more money (which they can't do at the moment), payments can't be made.

The bank does more than pay for the rice scheme for the government, so the idea that it has "run out of money" is shown as not true with it having 180 billion baht.

[Bender]

what a tragedy when nearly 50% of employment is provided by a sector, that unable to make any profit.

[NongKhaiKid]

[Ricardo]

IIRC the Cabinet also resolved a couple of times this year, to increase the BAAC's borrowing-limits, but I'd agree that the basic problem seems to be that the government itself has failed to reimburse this government-owned/backed bank, for the money paid-out on its' behalf.

Why ever not ?

Why do financing-problems persist, with this keynote Thaksin government policy, and an election due ?

[PaullyW]

This is getting good.

Rice

Politics & potential coup in Feb

US QE easing

FOREX pulling out of TH market

China economic bubble set to pop

Thai housing bubble set to pop

Tourism down

Floods

Japanese becoming uneasy about political situation and ability to protect their infrastructure

Rubber

AEC and lack of TH competitiveness

Gonna be a tough few years for TH, and surely will be more days of glory and relaxation for those of us who have worked hard and prepared for a more competitive world.

Edited December 13, 2013 by PaullyW

[waza]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Edited December 13, 2013 by waza

[Thai at Heart]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Technically.

Forget technically. It's bust.

[JRSoul]

what a tragedy when nearly 50% of employment is provided by a sector, that unable to make any profit.

That would be serious drama. The tragedy is wasting the good money of the productive workers to allow the uneconomic to continue to fail. When it becomes apparent that this is hugely expensive, but the uneconomic workers have enough votes to force it to continue, it turns to black comedy, or even farce. Then the PM and her pack of clowns start explaining what a huge success it has all been, and we lower ourselves to slapstick.

Edited December 13, 2013 by JRSoul

[Thai at Heart]

what a tragedy when nearly 50% of employment is provided by a sector, that unable to make any profit.

That would be serious drama. The tragedy is wasting the good money of the productive workers to allow the uneconomic to continue to fail. When it becomes apparent that this is hugely expensive, but the uneconomic workers have enough votes to force it to continue, it turns to black comedy, or even farce. Then the PM and her pack of clowns start explaining what a huge success it has all been, and we lower ourselves to slapstick.

The tragedy is that after all this development 45% of the people are still in agriculture and Thailand educates it's kids to about the level of 12 year olds in the serious world.

Mai bpen arai.

[whybother]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

[ramrod711]

Why do i suspect that the farmers will be paid before the election?

[Thai at Heart]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

A bank is expected to.maintain a minimum asset base.

They are cashed out unless someone with put in some capital. Any one offering?

They buy something for 1500,and sell it for 1000. Genius. Pure genius.

[NeverSure]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

There was an article and thread on here earlier in the year saying that the bank has just 100 billion baht of it's own capital.

It is also sitting on at least 800 billion baht in rice pledge loans. First it was 500bn, increased by 200bn, then they took 100bn of the Ag Bank's capital, reducing that capital from 200 to 100 bn baht.

The collateral for those loans is worth at most 60% of the loan balance. That's if none of the rice has been stolen or has become damaged from rot, insects, etc. Always the government has been borrowing this money to buy rice at much more that its market value. Always the bank has been loaning 100% of the purchase price, not the value.

There is no way that Ag Bank isn't upside down by at least 400 billion, and probably more. And now the government can't come up with 22bn to pay current debts to farmers for their rice.

[trogers]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

Yes, a bank does not need a cent as deposit to operate. All you need is to borrow from Peter to lend to Paul...

and when Paul defaults, just borrow more from Mary, John, .... and the circus show continues...

[whybother]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

A bank is expected to.maintain a minimum asset base.

They are cashed out unless someone with put in some capital. Any one offering?

They buy something for 1500,and sell it for 1000. Genius. Pure genius.

They've got 180 billion baht. There is just no money allocated (borrowed by the government) to pay the farmers.

[whybother]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

There was an article and thread on here earlier in the year saying that the bank has just 100 billion baht of it's own capital.

It is also sitting on at least 800 billion baht in rice pledge loans. First it was 500bn, increased by 200bn, then they took 100bn of the Ag Bank's capital, reducing that capital from 200 to 100 bn baht.

The collateral for those loans is worth at most 60% of the loan balance. That's if none of the rice has been stolen or has become damaged from rot, insects, etc. Always the government has been borrowing this money to buy rice at much more that its market value. Always the bank has been loaning 100% of the purchase price, not the value.

There is no way that Ag Bank isn't upside down by at least 400 billion, and probably more. And now the government can't come up with 22bn to pay current debts to farmers for their rice.

The bank has been loaning money to the government. Unless you're saying that the government can't pay, then it doesn't matter what it's being spent on.

[trogers]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

There was an article and thread on here earlier in the year saying that the bank has just 100 billion baht of it's own capital.

It is also sitting on at least 800 billion baht in rice pledge loans. First it was 500bn, increased by 200bn, then they took 100bn of the Ag Bank's capital, reducing that capital from 200 to 100 bn baht.

The collateral for those loans is worth at most 60% of the loan balance. That's if none of the rice has been stolen or has become damaged from rot, insects, etc. Always the government has been borrowing this money to buy rice at much more that its market value. Always the bank has been loaning 100% of the purchase price, not the value.

There is no way that Ag Bank isn't upside down by at least 400 billion, and probably more. And now the government can't come up with 22bn to pay current debts to farmers for their rice.

The bank has been loaning money to the government. Unless you're saying that the government can't pay, then it doesn't matter what it's being spent on.

You mean the bank has been buying government bonds? If not, what paperwork shows such loans which can be booked as an increase in bank asset?

[NeverSure]

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

There was an article and thread on here earlier in the year saying that the bank has just 100 billion baht of it's own capital.

It is also sitting on at least 800 billion baht in rice pledge loans. First it was 500bn, increased by 200bn, then they took 100bn of the Ag Bank's capital, reducing that capital from 200 to 100 bn baht.

The collateral for those loans is worth at most 60% of the loan balance. That's if none of the rice has been stolen or has become damaged from rot, insects, etc. Always the government has been borrowing this money to buy rice at much more that its market value. Always the bank has been loaning 100% of the purchase price, not the value.

There is no way that Ag Bank isn't upside down by at least 400 billion, and probably more. And now the government can't come up with 22bn to pay current debts to farmers for their rice.

The bank has been loaning money to the government. Unless you're saying that the government can't pay, then it doesn't matter what it's being spent on.

I'm saying that this article and this thread say that the government can't even come up with 22bn baht to pay farmers for the rice scheme, when it already owes the Ag Bank something like 800 bn for payments it already made for the same. I'm saying that considering theft and rot of the collateral - the rice - and due to the fact that the loans for the rice were for far more than the rice is worth, that the actual loss has to be at least 400 bn baht but who knows due to lack of transparency and corruption.

I'm saying the government can't pay, and that both the bank and the government are insolvent. BTW the insolvent government owns that insolvent bank.

Were you ever a banker? I was.

[moe666]

PTP aka. Big T has left the bank to be the fall guy

[GentlemanJim]

"About Bt22 billion remains to be paid under the rice-pledging scheme for this month only, but if there is no new money from rice sales or borrowings coming in, payment may be delayed"

BUT

"There is no problem with liquidity, as the bank has about Bt180 billion., according to the Bank for Agriculture and Agricultural Cooperatives."

Now call me old fashioned, but <deleted> is going on?

You're old fashioned

[whybother]

I'm saying that this article and this thread say that the government can't even come up with 22bn baht to pay farmers for the rice scheme, when it already owes the Ag Bank something like 800 bn for payments it already made for the same. I'm saying that considering theft and rot of the collateral - the rice - and due to the fact that the loans for the rice were for far more than the rice is worth, that the actual loss has to be at least 400 bn baht but who knows due to lack of transparency and corruption.

I'm saying the government can't pay, and that both the bank and the government are insolvent. BTW the insolvent government owns that insolvent bank.

Were you ever a banker? I was.

The government can't come up with the money to pay farmers because it is care-taker mode. The bank can't come up with the money to pay farmers because it has used all the funds allocated to the rice scheme, and it can't get more with out the government saying so ... which it can't because it is in care-taker mode.

The government was about to borrow 2.5 trillion baht for various projects. I don't think an insolvent government would be able to do that. I am not saying that it's not stupid, and I am not saying they're not going to screw the country, but that doesn't mean it's insolvent ... yet.

[whybother]

You mean the bank has been buying government bonds? If not, what paperwork shows such loans which can be booked as an increase in bank asset?

According to a BP article titled "BAAC: More cash needed for farmers", the government has given a credit guarantee to the bank's 75 billion baht in bonds. It looks like the bank is selling bonds to fund this, guaranteed by the government.

[Ricardo]

You mean the bank has been buying government bonds? If not, what paperwork shows such loans which can be booked as an increase in bank asset?

According to a BP article titled "BAAC: More cash needed for farmers", the government has given a credit guarantee to the bank's 75 billion baht in bonds. It looks like the bank is selling bonds to fund this, guaranteed by the government.

And yet the government body selling the bonds, still couldn't shift more than 37-billion, despite paying a higher premium, just after the BoT had dropped rates ?

No wonder the BAAC-management are treading carefully, and making it very clear, where the problem/responsibility with paying-out really lies.

[NeverSure]

I'm saying that this article and this thread say that the government can't even come up with 22bn baht to pay farmers for the rice scheme, when it already owes the Ag Bank something like 800 bn for payments it already made for the same. I'm saying that considering theft and rot of the collateral - the rice - and due to the fact that the loans for the rice were for far more than the rice is worth, that the actual loss has to be at least 400 bn baht but who knows due to lack of transparency and corruption.

I'm saying the government can't pay, and that both the bank and the government are insolvent. BTW the insolvent government owns that insolvent bank.

Were you ever a banker? I was.

The government can't come up with the money to pay farmers because it is care-taker mode. The bank can't come up with the money to pay farmers because it has used all the funds allocated to the rice scheme, and it can't get more with out the government saying so ... which it can't because it is in care-taker mode.

The government was about to borrow 2.5 trillion baht for various projects. I don't think an insolvent government would be able to do that. I am not saying that it's not stupid, and I am not saying they're not going to screw the country, but that doesn't mean it's insolvent ... yet.

Didn't you notice that no one would lend Thailand the 2.1 tril? Didn't you see Yingluck going all over the world asking for the loan? Japan snubbed her and she even asked Hungary, <deleted>. Thailand has been utterly unable to get that loan.

The loan was supposed to be for a high speed rail, not to pass out to cronies and to pay off existing debt for a rice scheme and a rubber scheme. It would take half of that high speed rail loan just to bail out the rice scheme.

You mean the bank has been buying government bonds? If not, what paperwork shows such loans which can be booked as an increase in bank asset?

According to a BP article titled "BAAC: More cash needed for farmers", the government has given a credit guarantee to the bank's 75 billion baht in bonds. It looks like the bank is selling bonds to fund this, guaranteed by the government.

Yep, one big circle jerk. "I'm broke, but I owe myself 1 trillion baht, so I'm good to go."

This thread states that the government can't even come up with 22 bn BHT to pay for the current rice scheme to farmers. There it is in black and white.

They're out of money and want to now sell bonds. This has been talked about for some time now but I haven't seen any takers.

Edited December 13, 2013 by NeverSure

[renaissanc]

Don't worry, sir! The farmers will still love you and vote for you. The Red Shirts and Pheu Thai will blame all this on Suthep and the evil Democrats, and the farmers will believe them. After all, it couldn't possibly be due to corruption because you are a good, honest man who has been unjustly treated.The poo yai bahns will go out bearing gifts on the Night of the Howling Dogs, and the villagers will continue to vote for you and love you. So, carry on enjoying your Crystal Champagne and don't worry! All is well.

[Thai at Heart]

Very rubbery numbers............

"Its outstanding deposits amounted to more than Bt1 trillion. The bank's loans, excluding those for rice pledging and other state projects, expanded 8 per cent. Outstanding loans, excluding rice pledging, totalled Bt900 billion."

So it only has 100 billion left for the rice scam, but has a revolving budget of 500 billion baht that is exhausted. I may be wrong here but if you have 1 trillion is assets and 1.4 trillion in declared debts and cant meet your obligations aren't you technically insolvent?

Banks can borrow money to lend out at a higher interest rate. It doesn't just depend on deposits for loans.

A bank is expected to.maintain a minimum asset base.

They are cashed out unless someone with put in some capital. Any one offering?

They buy something for 1500,and sell it for 1000. Genius. Pure genius.

They've got 180 billion baht. There is just no money allocated (borrowed by the government) to pay the farmers.

They do also have few depositors who they have to keep.some available cash for.

They can just empty the bank to give it all out to the farmers.

[pb1936]

Another set of muddled, jumbled. and meaningless figures.