B17bn rice loan eases pressure on government

[Lite Beer]

B17bn rice loan eases pressure on government

BANGKOK: The caretaker government has secured a loan of 17 billion baht from the Government Savings Bank (GSB), which will be used to distribute overdue payments to rice farmers.

The move is likely to temporarily ease pressure on the government, which has faced mounting anger from farmers forced to wait several months for money owed to them under the rice-pledging scheme.

The money will be paid directly to farmers from Monday, caretaker Prime Minister Yingluck Shinawatra said on Friday.

The GSB credit committee on Thursday approved the inter-bank loan to the state-run Bank for Agricultural and Agricultural Cooperatives (BAAC), which is responsible for allocating rice-scheme payments to farmers.

The borrowed cash should relieve pressure on the government for at least a month, as the BAAC usually has the capacity to process payments of two billion to three billion baht per week.

The caretaker government has been struggling to find the 130 billion baht needed to pay the more than 1 million farmers who are still awaiting money from the rice scheme. The farmers have been threatening to stage mass rallies in Bangkok, a move which would likely aggravate the government’s ongoing political woes.

The farmers were due to be paid in October for the main 2013/2014 crop.

"The BAAC must take the money to pay farmers after the Finance Ministry secures the source of funding. Otherwise, the bank may be deemed negligent," a source at the BAAC said.

In a bid to secure funding, caretaker Finance Minister Kittiratt Na-Ranong issued a letter of guarantee to both state-owned banks assuring them that the ministry would take responsibility for interest costs and principal incurred from the loan.

The source said Mr Kittiratt told bank executives the ministry would seek 20 billion baht a month to support the BAAC.

The ministry will also ask state enterprises to shift their deposits from other banks to the BAAC to increase its liquidity. The BAAC recently said its liquidity stood at just over 110 billion baht.

Ms Yingluck said she believes that once farmers are paid, those who took to the streets in protest would return home and get back to work.

"Those farmers who have sued us for 19 million baht [in damages for the payment delay], we would rather let the legal experts deal with that. [The government] doesn’t want to argue with people," she said.

GSB labour union head Likit Klinthanom said the 17 billion baht is part of a total of 20 billion baht in loans that was approved by the board on Jan 8. The process of finalising the loan and transferring the funds, however, was disrupted by anti-government protesters.

The loan carries a 30-day maturity with just over 2% annual interest, he said, adding that such a borrowing arrangement is normal practice and the GSB has surplus liquidity to extend to other banks.

Mr Likit said the labour union supports the bank’s deal.

But former finance minister Thirachai Phuvanatnaranubala questioned the agenda behind the loan arrangement, suggesting it could raise legal hurdles.

Such borrowing could be considered a bank loan rather than inter-bank lending, he said.

Inter-bank borrowing does not need the Finance Ministry to guarantee the lending, he said, and borrowing through the inter-bank market does not require borrowers to identify the borrowing purpose, unlike bank loans.

He suspected that the borrowing could violate Section 181 (4) of the constitution, which bars the caretaker government from using state agencies’ resources to boost its electoral support.


-- Phuket News 2014-02-16

[cloudhopper]

One branch of the government loaning money to another branch. Sure. Just the same way social security in the US works BTW.

It's all just going to be printed in the end.

[Lite Beer]

Govt calls on financial institutions to provide loans for overdue rice payments

BANGKOK, 16 February 2014 (NNT) - The government has urged financial institutions to quickly consider lending the Bank for Agriculture and Agricultural Cooperatives (BACC) which is responsible to pay farmers in the rice subsidy scheme. The BACC labour union has meanwhile threatened to demonstrate against inter-bank loans to finance the troublesome program.

Deputy Minister of Agriculture and Cooperatives Warathep Rattanakorn asked financial institutions to sympathize with the farmers who had not yet received payments from the rice support program by issuing loans to the BACC. He said loans were needed since it took time to receive proceeds from the distribution of rice from the government’s warehouses. Mr Warathep also confirmed all of the rice farmers would be paid and called on anti-government protesters not to obstruct the loans.

The state-run Government Savings Bank last week approved an inter-bank loan to the BAAC whose labor union is protesting against it.

-- NNT 2014-02-16

[johnthompson]

Time to withdraw my money from GSB then.

[Valentine]

Not sure about the legalities but the government must have funds to pay government workers & for ongoing services plus other contracts awarded by the government so why don't they have any money to pay the farmers as surely it is just another government contract. Conversely if they are not allowed to pay the farmers are they allowed to pay all the others.

BTW I saw another news item which stated GSB did not even ask what the loan was for. Incredibly irresponsible on their part if true & certainly not a good place for your savings with such risque behaviour.

Edited February 16, 2014 by Valentine

[Why ask]

Never read so much illegal <deleted> in my life. There is no financial support for the empty banks of the government, as they were raped clean too.

How to bankrupt a country in one swift move. Appaliing.

[Why ask]

Time to withdraw my money from GSB then.

Too late! It's gone to Sin Corp.

[bigbamboo]

When a GSB credit committee member was asked for a comment she replied, " Do you like my new car?"

[sixfiftysevenmember]

Time to withdraw my money from GSB then.

Could not agree more. Many people where I live in Central Thailand have been ringing round to inform all about the actions of the GSB. Tomorrow we and many others will descend upon out branch and remove all our money which when added together, is a considerable sum. Hope many others do the same.

[Ricardo]

30-day maturity, so BAAC will have to repay the B17-billion a month later, or will they be able to roll it over without any problem ?

[fab4]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Edited February 16, 2014 by fab4

[Robby nz]

They have a loan of 17 billion and need 130 billion, that only leaves 113 billion to go right ?

But

Caretaker commerce minister reaffirms govt to start distributing Bt4 bln overdue payment/day to farmers tomorrow /MCOT

But, it seems we have another white lie from the caretaker minister as the bank does not appear to have the capacity to pay out 4 billion a day.

Even if the per week in the following quote is a typo and should be per day the lie still lives on.

The borrowed cash should relieve pressure on the government for at least a month, as the BAAC usually has the capacity to process payments of two billion to three billion baht per week.

If per week is correct then it will take 5 to 6 weeks to pay out the 17 billion, assuming it all gets to the farmers.

Then it will take almost another 40 weeks to pay out the remaining 113 billion provided they can find the money.

Should be another 2 or possibly 3 rice crops in by then.

Wonder who will be the lucky ones to get the first 2 or 3 billion next week, could it be the farmers leaders, if they tell the others to go home and don't make any more trouble

Edited February 16, 2014 by Robby nz

[Old Man River]

BTW I saw another news item which stated GSB did not even ask what the loan was for. Incredibly irresponsible on their part if true & certainly not a good place for your savings with such risque behaviour.

Banks lend to banks based on the credit worthiness of the bank, not on what they are doing with the money. This is normal. It happens in you're country, and I don't know what country you are from.

Sent from my iPad using Thaivisa Connect Thailand

[chainarong]

Not sure about the legalities but the government must have funds to pay government workers & for ongoing services plus other contracts awarded by the government so why don't they have any money to pay the farmers as surely it is just another government contract. Conversely if they are not allowed to pay the farmers are they allowed to pay all the others.

BTW I saw another news item which stated GSB did not even ask what the loan was for. Incredibly irresponsible on their part if true & certainly not a good place for your savings with such risque behaviour.

Government budgets for government wages and service , the budget was handed down before the caretaker mode, the rice loan is entirely different, no money was budgeted, so no money available, all praying that a 50% increase in rice price would pay for the scheme, it didn't happen. called fritters account. or gambling.

[Old Man River]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Many farmers were not paid before the demonstrations.

For transparency sake, since this is a democracy, do you have any idea where the accounting on the rice program can be found? Have you ever seen it?

Sent from my iPad using Thaivisa Connect Thailand

[Trembly]

The heads of the state-owned retail banks such as GSB and others are all appointed by the Finance Minister.

I suspect that in spite of the union protests, the head of GSB was made an offer he couldn't refuse by Kittirat and caved.

[Suriya4]

Time to withdraw my money from GSB then.

As soon as it opens on Monday.

But wait, I don't have an account there.

[Mosha]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

You missed this above what K Likit said.

"The farmers were due to be paid in October for the main 2013/2014 crop." So no, as usual you are wrong

[GentlemanJim]

They have a loan of 17 billion and need 130 billion, that only leaves 113 billion to go right ?

But

Caretaker commerce minister reaffirms govt to start distributing Bt4 bln overdue payment/day to farmers tomorrow /MCOT

But, it seems we have another white lie from the caretaker minister as the bank does not appear to have the capacity to pay out 4 billion a day.

Even if the per week in the following quote is a typo and should be per day the lie still lives on.

The borrowed cash should relieve pressure on the government for at least a month, as the BAAC usually has the capacity to process payments of two billion to three billion baht per week.

If per week is correct then it will take 5 to 6 weeks to pay out the 17 billion, assuming it all gets to the farmers.

Then it will take almost another 40 weeks to pay out the remaining 113 billion provided they can find the money.

Should be another 2 or possibly 3 rice crops in by then.

Wonder who will be the lucky ones to get the first 2 or 3 billion next week, could it be the farmers leaders, if they tell the others to go home and don't make any more trouble

BIngo, nail on the head. So how the hell are the farmers ever going to get paid, even if they put the 130 billion in the bank tomorrow.

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

See the post above. There is a great maths study system in Thailand called Kumon. You could go for extra classes to improve your understanding of basic mathematics (we can work on logic and objectivity later). How can the payments have been delayed by Suthep and the protestors genius? Just because a labour spokesman from the GSB said so? Boy you don't need much convincing of red achievement. There was no money, THAT is why they are securing loans. Do you not even have any interest in just where the 600-700 Billion has gone? It now transpires that it would take the Government almost a year to pay the farmers at 2-3 billion per week. This money has been owed since Sep-Oct. You are breaking that forum rule again aren't you? You know the one about comments designed purely to inflame any thread.

[JRSoul]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Oh please! 17 billion out of a 130 billion baht doesn't satisfy many does it. And the country is still burdened with a massive debt from the government's ineptitude and corruption.

[Why ask]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

So the protestors shut down all bank opertions did they?

Idiotic posting in forums, without any sense in writing, can become an embarassment to Paul, John, Ringo and George...

Real scousers wouldn't write as much BS as some do.

[473geo]

"He suspected that the borrowing could violate Section 181 (4) of the constitution, which bars the caretaker government from using state agencies’ resources to boost its electoral support."

Where as Suthep can collect money and donate to the farmers no issues.......because his plan is to have no 'electoral' participation in the forseeable future!!

[casualbiker]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

I know he said that.

But just HOW did the protestors delay the deal? If it was agreed by the board January 8th it would just have been internal paperwork surely?

Your thoughts?

Sent from my XT1032 using Thaivisa Connect Thailand mobile app

[tim armstrong]

So why didn't they do this before ?? I guess the Head of the GSB wasn't quite ready. I doubt if the farmers are going to accept this quite arrogant attempt to quieten them down. They are still owed the bulk of the money, and as some of them said - we are now interested in removing the government. I wonder if they will be bought off ?

[Scamper]

" In a bid to secure funding, caretaker Finance Minister Kittiratt Na-Ranong issued a letter of guarantee to both state-owned banks assuring them that the ministry would take responsibility for interest costs and principal incurred from the loan. "

" He suspected that the borrowing could violate Section 181 (4) of the constitution, which bars the caretaker government from using state agencies’ resources to boost its electoral support. "

​Indeed, it can't be done. The EC has said no. The NACC has said no. The constitution says no. This administration does not have legislative power. Issuing a letter of guarantee on behalf of the ministry is something the administration cannot do, because as they are in a caretaker capacity the ministry isn't empowered to guarantee the loan and they aren't empowered to commit any future government ministry to guarantee the loan. If the administration was too busy to attend to this two months before dissolving parliament, they cannot constitutionally do it now. No matter how many times Kittirat is told this, the more he doesn't hear. The NACC's file on the rice scandal is very thick, and Kittirat's latest move accentuates the administration's precarious constitutional stance even more. This is a programme that has lost hundreds and hundreds of billions of baht. How in the world can a letter of guarantee - which the administration cannot legally tender - convince any bank that still wants to attract customers and investment that the loans have any hope of ever getting paid ? And yes, there is still an election under way. And yes, the constitution has not been suspended or kept on hold. The farmers should have been paid long ago. They should be paid now. But not through unconstitutional means.

[fab4]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

You missed this above what K Likit said.

"The farmers were due to be paid in October for the main 2013/2014 crop." So no, as usual you are wrong

And as usual mosha firing from the lip without reading the op properly. I said nothing about October payments.

The loan was available on January 8th but was delayed by the protesters as the union head said.

Now am I right or am I right?

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Edited February 16, 2014 by fab4

[PatOngo]

This will buy back a few votes from the gullible.

[Melyn]

So, as stated the delays in paying the farmers was down to the anti-government protesters as confirmed by the GSB labour union head Likit Klinthanom. Perhaps the farmers will think again about approaches from the ever slippery suthep and his sheeple.

Sent from my i-mobile IQ 5 using Thaivisa Connect Thailand mobile app

Your posts contain so much disinformation that one has to wonder what your objectives truly are.

Telling untruths is never honourable

Sent from my Nexus 7 using Thaivisa Connect Thailand mobile app

[Robby nz]

I see it reported now :

Govt Savings Bank says it will lend billions of baht to Bank of Agriculture and Agricultural Cooperatives for liquidity /MCOT

For liquidity ?

Not to pay the farmers but to keep the BAAC solvent, in other words to maintain their back up capacity in case of problems.

Not being a banker...Am I reading that right ?

[Mosha]

Again. "The farmers were due to be paid in October for the main 2013/2014 crop." So why wasn't it paid then Oh wise one?