Finance seeks Bt50-bn term loans to pay off Thai rice farmers

[webfact]

Finance seeks Bt50-bn term loans to pay off rice farmers
PETCHANET PRATRUANGKRAI
THE NATION



BANGKOK: -- THE FINANCE MINISTRY has invited 32 state and private banks to bid for the first phase of a three-year programme of bridge loans totalling Bt50 billion to pay rice farmers still owed under the pledging programme. The first Bt30-billion tender will be called early next month.

Pongpanu Svetarundra, deputy permanent secretary of the ministry, said those financial institutions interested in joining the bidding would be required to offer a minimum of Bt2 billion.

He said the ministry would open bidding for a term loan worth Bt30 billion on June 6, and a second tender for the remaining Bt20 billion on June 13.

After former prime minister Yingluck Shinawatra dissolved the House of Representatives late last year and the government took on a caretaker role, which was prolonged by the failure to elect a new government in February, it was unable to raise all of the tens of billions of baht it owed farmers under the pledging project.

Accelerating these overdue payments to more than 800,000 farmers has been identified as a priority of the National Council for Peace and Order (NCPO), as the military junta now calls itself. It says it will try to clear the books within a month.

As it will take some time for the Finance Ministry to borrow the Bt50 billion under its latest tender offer, the Bank for Agriculture and Agricultural Cooperatives (BAAC) announced that it would ante up Bt40 billion to get some of the farmers paid in short order.

Luck Wajananawat, managing director of the BAAC, said this amount would come out of the bank's own farmers' relief fund.

"The bank believes that the remaining farmers will all be paid within a month," he said.

Luck said that while waiting for the Bt50 billion to be borrowed by the Ministry of Finance, the BAAC would begin to disburse an amount not exceeding Bt40 billion so that the payments could start right away.

This operation would be guarantee by the ministry.

According to the BAAC, as of last Friday, of a total of 1.67 million contracts under the rice-pledging scheme worth Bt192.95 billion, the bank had paid off 833,182 contracts worth more than Bt100 billion.

Special task force

Meanwhile, the Commerce Ministry's permanent secretary Srirat Rastapana said it would set up a special task force, on which a representative from the NCPO would sit, to inspect rice stocks and warehouses nationwide.

A source in the Finance Ministry said its auditing committee had found that about 3 million tonnes of rice had disappeared from the stockpiles.

The junta's decision to accelerate payment of farmers long owed money under the pledging programme could help stimulate the country's economic growth to 3 per cent this year, says the Thai Chamber of Commerce.

After a meeting of the chamber's regional boards in Bangkok yesterday, TCC vice chairman Somkiat Anuras said the Bt92 billion in payments to farmers would help boost confidence in the economy.

"The total payment of Bt92 billion that will be soon provided to farmers will boost economic growth by about Bt300 billion to Bt400 billion this year. As a result, the economy could grow by 3 per cent this year, higher the previous expectation of 1.5 per cent," he said.

Somkiat said a survey of members during the weekend found that the business sector had more confidence in future growth, despite the impact on the economy due from a half-year of political turmoil.

To draw up plans for an economic road map, the chamber and the Board of Trade of Thailand are to hold a meeting of their members and seven other business organisations today. (May 27). The meeting's conclusions will be proposed to the junta.

Somkiat said TCC members largely shared the view that cross-border trade would be a key economic driver this year amid uncertain overall export and tourism growth.

Asked about concerns about foreign investors' confidence, Somkiat said this was the time to manage the mess the country found itself in. He expects that more confidence will be seen after Thailand solves its internal problems. He believes the NCPO will do this and reform the country in various aspects including politics, government, the economy and education.

According to the chamber's survey, about 76 per cent of respondents had a gloomy economic outlook for this year because of the impact from political turmoil in the first half. However, most had a better outlook for future growth.

Viroj Jiratikanchote, chairman of the TCC's committee on economic development of the Northern region, said the northern economy would see slow growth this year due mainly on the impact of the earthquake on the tourism sector. The tourism industry is expected to see this year's revenue decline by Bt4.6 billion, or 4.6 per cent, from the previous forecast of Bt94.6 billion.


-- The Nation 2014-05-27

[MaxLee]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

[bangkokheat]

am i missing something, wasnt the farmers money available already if they had the correct paperwork

[JesseFrank]

So what wasn't possible for various reasons a few months ago, is all possible today ?

We will see, said the blind guy.

[garrya]

Here we go again. There are big declamations on how fast they will pay the farmers, but, of course, there is no money in the budget. Is it just not the same what the government did?? Empty promises??

Obviously, Thailand has no money. This is why the government was struggling to pay the farmers ready cash.

[personchester]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

No, this will not happen again, there is now a sensible junta administration, moreover Thai banks will not get involved in silly financial activities.

[alant]

what does "the first phase of a three-year programme of bridge loans totalling Bt50 billion to pay rice farmers still owed under the pledging programme." mean? In particular the 3 year bit.

[lahgon29]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

No, this will not happen again, there is now a sensible junta administration, moreover Thai banks will not get involved in silly financial activities.

Sensible junta?????

I think world history has shown this to be an oxymoron.

[kamahele]

I guess we'll see how easy or hard it is to get a loan after a coup. I do hope the farmers get paid and get paid soonest.

[thumper101]

If they can't get the loans, they will get it from the central fund.... no real news here.

[wealth]

A source in the Finance Ministry said its auditing committee had found that about 3 million tonnes of rice had disappeared from the stockpiles.

not unexpected but still shocking ... get the culprits ... round 'em up ...

[kerrysum]

So I guess it goes from millions to billions? Is there something wrong with financial stewardship? Or is it the ideal to pay off their national debt?

Just my thought... And yet they let the criminals go home? Guess someone did not read the fine print...... Trust me, I'm trying to be positive.....

Maybe it is just an excuse, to take away from the hard working people of Thailand...... Trust me Thai-visa .com, I'm trying to be positive...

With all due respect, to the people, and their King.......

[SICHONSTEVE]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

Use your noddle!! the lending has been sanctioned and is above board now - everything will be hunky dory in a month now that this Thaksin 'proxy' government has been chucked out unceremoniously!!

Thailand is in safe hands now - just watch the turnaround now that we have this benevolent dictatorship government.

He (the general) is doing a magnificent job in such a short period of time. I hope he decides to run for PM in an election as he seems well cut out for the job!!

[wealth]

the farmers will get their money this time, as promised. The culprits will face the consequences as promised. We'll probably see a reign of confiscating assets and cash and international arrest warrants.

All together it will be thourough house cleaning ...

[arminbkk]

So what wasn't possible for various reasons a few months ago, is all possible today ?

We will see, said the blind guy.

Before the government had caretaker status and was not allowed incur liabilities by raising/borrowing funds to pay the farmers.

Sure, we know that same government had disregarded laws before but this time, under caretaker status, they could not do that anymore.

You will also remember that Suthep called on all banks to not provide funds to the government and also staged protests

at Government Savings Bank branches.One bank (forgot which one right now, or was it GSB?) that did consider loaning the government, soon saw

customers withdrawing lots of funds. That bank then backed out.

Perhaps PTP was unwilling to pay the farmers quickly, but they (later) also had opposition (Suthep/Democrats) blocking them,

and they also had laws blocking/prohibiting them.

Then there is martial law and the General calls all parties in for a meeting. But nobody wants to back down, give in, compromise.

Now, when you have a situation where there is a government with supporters on one side, opposition parties with supporters on the other side,

both parties trying to block each other physically or through judicial system (with investigation probes and filing court cases for impeachment/LM/corruption cases etc)

and threaten with violent clashes, not cooperating, not compromising etc...what do you? A coup.

And now those laws are not in effect anymore and the coup leader can do and order anything he wants, not being hindered by

any laws and not even the Constitution.

Are you never in a situation where you just want everybody to shut up and tie them to a chair and gag them and wipe everything from the table

and tell them how it is going to be?

When the general called in all those parties for a meeting to get funds to immediately pay the farmers (good strategic move by the way),

I am sure it went something along the lines of:"I am TELLING you, not ASKING you, to get me that money today".

[thumper101]

Meanwhile, the Commerce Ministry's permanent secretary Srirat Rastapana said it would set up a special task force, on which a representative from the NCPO would sit, to inspect rice stocks and warehouses nationwide.

A source in the Finance Ministry said its auditing committee had found that about 3 million tonnes of rice had disappeared from the stockpiles.

Add to this the list of big business owners with links to the Shins and government projects who were called in to report to the NCPO and I think we can assume a whole heap of government level corruption is going to be uncovered.

This coup is the best thing that ever happened to Thailand.

Hopefully there will be enough asset freezes and asset seizures to replace a decent lump of lost/stolen money under the PTP government of thieves.

[ppmacready]

Here we go again. There are big declamations on how fast they will pay the farmers, but, of course, there is no money in the budget. Is it just not the same what the government did?? Empty promises??

Obviously, Thailand has no money. This is why the government was struggling to pay the farmers ready cash.

My thoughts exactly.

But when will this be represented in the value of the baht?

Soon I hope!

[Usual Suspect]

Wealth here mentioned confiscating assets..good point..weedle-out these mill owners, rice traders etc that seem to have done so well out of storing 1000's of tons of grain while their stores remained locked & empty, then seize their stores & auction them.

On a drive back down from Uttaradit last month I was amazed how many big new rice storage facilities are going up..but why could I not help thinking these huge buildings are being funded by money 'creamed' off the rice subsidy scheme..?

Maybe the new Junta can launch a real investigation & hopefully recover some of the millions of missing Baht.

[thumper101]

So what wasn't possible for various reasons a few months ago, is all possible today ?

We will see, said the blind guy.

Before the government had caretaker status and was not allowed incur liabilities by raising/borrowing funds to pay the farmers.

Sure, we know that same government had disregarded laws before but this time, under caretaker status, they could not do that anymore.

You will also remember that Suthep called on all banks to not provide funds to the government and also staged protests

at Government Savings Bank branches.One bank (forgot which one right now, or was it GSB?) that did consider loaning the government, soon saw

customers withdrawing lots of funds. That bank then backed out.

Perhaps PTP was unwilling to pay the farmers quickly, but they (later) also had opposition (Suthep/Democrats) blocking them,

and they also had laws blocking/prohibiting them.

Then there is martial law and the General calls all parties in for a meeting. But nobody wants to back down, give in, compromise.

Now, when you have a situation where there is a government with supporters on one side, opposition parties with supporters on the other side,

both parties trying to block each other physically or through judicial system (with investigation probes and filing court cases for impeachment/LM/corruption cases etc)

and threaten with violent clashes, not cooperating, not compromising etc...what do you? A coup.

And now those laws are not in effect anymore and the coup leader can do and order anything he wants, not being hindered by

any laws and not even the Constitution.

Are you never in a situation where you just want everybody to shut up and tie them to a chair and gag them and wipe everything from the table

and tell them how it is going to be?

When the general called in all those parties for a meeting to get funds to immediately pay the farmers (good strategic move by the way),

I am sure it went something along the lines of:"I am TELLING you, not ASKING you, to get me that money today".

Total trash.

Suthep announced that they would protest against the GSB to protect it from collapse as he feared there would be a run on the bank, then a week later he changed his mind and declared he would not stand against any bank wanting to make loans, but warned that there could be a backlash.

2 months later the GSB run happened, and that was at the same time the PDRC were collecting tens of millions for the farmers. Suthep never ever called a run on the bank so you are lying 100%. At the same time the run on the GSB was happening, Suthep was in the middle of a campaign against Thaksin commercial interests (AIS etc...).

Also, The EC actually granted a 20Bn loan, even though it was giving the PTP an electoral advantage, and not once did Suthep call out against this.

The facts are.... Nobody was willing to loan the government any money, they didn't trust them or the legalities of loaning to a government in trouble and in an election run up situation..... That is actually what happened, and I defy anyone to bring forward evidence that I am wrong... (no Khaosod reports please).

The PTP knew it had to pay the farmers, they held a meeting on dissolving parliament with the cabinet etc... Thaksin would have been involved all the way and not a single person including the Finance minister and Commerce minister who were handling the rice problem at that very time, ever bothered to speak up about sidelining the cash from central budget when they had the power to do so????... Come on man!!!

They knew exactly what they were doing and they hoped the financial pressure on the farmers would force them onto the streets of BKK to confront the protesters while the government were doing everything in their power to put the blame for delays on the PDRC.... It didn't work, in fact it backfired big time and only forced the rice farmers against the PTP.

The farmers may be uneducated, but they are far from stupid.

So you can stop with your silly red rhetoric, as it no longer works on this forum any more.

The rice scam and the delayed payments are the exclusive responsibility of the Thaksin led PTP government and no amount of twisting and spin will even fool uneducated farmers let alone educated westerners.

[MK1]

Nice start for the ANZ Banking Corporation due to begin operations in the LOS soon; they may as well call it key money. It’s perhaps the reason why they were given a banking license to trade here in the first place when it was realized; all is lost.

Edited May 27, 2014 by MK1

[Roel]

Possibly the banks could deny Yingluck the loans but the military will make them an offer they can't refuse.

[personchester]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

No, this will not happen again, there is now a sensible junta administration, moreover Thai banks will not get involved in silly financial activities.

Sensible junta?????

I think world history has shown this to be an oxymoron.

The initial view of foreign countries about the Thai coup was seen as a violent military activity but this did not take place.

The junta has been approved by the King, and the upcoming political activities will be outlined by a team of top professional advisers in order to start a new election for top democratic country.

[SICHONSTEVE]

So what wasn't possible for various reasons a few months ago, is all possible today ?

We will see, said the blind guy.

Before the government had caretaker status and was not allowed incur liabilities by raising/borrowing funds to pay the farmers.

Sure, we know that same government had disregarded laws before but this time, under caretaker status, they could not do that anymore.

You will also remember that Suthep called on all banks to not provide funds to the government and also staged protests

at Government Savings Bank branches.One bank (forgot which one right now, or was it GSB?) that did consider loaning the government, soon saw

customers withdrawing lots of funds. That bank then backed out.

Perhaps PTP was unwilling to pay the farmers quickly, but they (later) also had opposition (Suthep/Democrats) blocking them,

and they also had laws blocking/prohibiting them.

Then there is martial law and the General calls all parties in for a meeting. But nobody wants to back down, give in, compromise.

Now, when you have a situation where there is a government with supporters on one side, opposition parties with supporters on the other side,

both parties trying to block each other physically or through judicial system (with investigation probes and filing court cases for impeachment/LM/corruption cases etc)

and threaten with violent clashes, not cooperating, not compromising etc...what do you? A coup.

And now those laws are not in effect anymore and the coup leader can do and order anything he wants, not being hindered by

any laws and not even the Constitution.

Are you never in a situation where you just want everybody to shut up and tie them to a chair and gag them and wipe everything from the table

and tell them how it is going to be?

When the general called in all those parties for a meeting to get funds to immediately pay the farmers (good strategic move by the way),

I am sure it went something along the lines of:"I am TELLING you, not ASKING you, to get me that money today".

You are wasting your time with this concise explanation as this message doesn't seem to penetrate the red's skulls and circumnavigates their brains!! They simply don't get it, no matter how many times it is laid out before them.

[soalbundy]

Will this mean another run at the banks by the Bangkok people, if the banks decide to just hand out money to the farmers just from out of the blue?

No, this will not happen again, there is now a sensible junta administration, moreover Thai banks will not get involved in silly financial activities.

Sensible junta?????

I think world history has shown this to be an oxymoron.

Maybe,but it is certainly showing itself to be better than the government ever was. 'Democracy' here is slow and cumbersome, a benevolent dictatorship works better for Thailand and is definitley needed at this point in time

[bustermante]

so many experts here...amazing how many people are so sure they are in command of all the facts...

the internet is a dangerous thing...makes everyone an expert on banking, governance , politics,

without the benefit of facts or the deductive reasoning to use the lack of data....

as a man once said with absolute certainty..

there are known unknowns

and there are unknown unknowns

when we find out what we don't know then perhaps

we can form conclusions based on our lack of knowledge.

[Mr Yim]

So what wasn't possible for various reasons a few months ago, is all possible today ?

We will see, said the blind guy.

Before the government had caretaker status and was not allowed incur liabilities by raising/borrowing funds to pay the farmers.

Sure, we know that same government had disregarded laws before but this time, under caretaker status, they could not do that anymore.

You will also remember that Suthep called on all banks to not provide funds to the government and also staged protests

at Government Savings Bank branches.One bank (forgot which one right now, or was it GSB?) that did consider loaning the government, soon saw

customers withdrawing lots of funds. That bank then backed out.

Perhaps PTP was unwilling to pay the farmers quickly, but they (later) also had opposition (Suthep/Democrats) blocking them,

and they also had laws blocking/prohibiting them.

Then there is martial law and the General calls all parties in for a meeting. But nobody wants to back down, give in, compromise.

Now, when you have a situation where there is a government with supporters on one side, opposition parties with supporters on the other side,

both parties trying to block each other physically or through judicial system (with investigation probes and filing court cases for impeachment/LM/corruption cases etc)

and threaten with violent clashes, not cooperating, not compromising etc...what do you? A coup.

And now those laws are not in effect anymore and the coup leader can do and order anything he wants, not being hindered by

any laws and not even the Constitution.

Are you never in a situation where you just want everybody to shut up and tie them to a chair and gag them and wipe everything from the table

and tell them how it is going to be?

When the general called in all those parties for a meeting to get funds to immediately pay the farmers (good strategic move by the way),

I am sure it went something along the lines of:"I am TELLING you, not ASKING you, to get me that money today".

Total trash.

Suthep announced that they would protest against the GSB to protect it from collapse as he feared there would be a run on the bank, then a week later he changed his mind and declared he would not stand against any bank wanting to make loans, but warned that there could be a backlash.

2 months later the GSB run happened, and that was at the same time the PDRC were collecting tens of millions for the farmers. Suthep never ever called a run on the bank so you are lying 100%. At the same time the run on the GSB was happening, Suthep was in the middle of a campaign against Thaksin commercial interests (AIS etc...).

Also, The EC actually granted a 20Bn loan, even though it was giving the PTP an electoral advantage, and not once did Suthep call out against this.

The facts are.... Nobody was willing to loan the government any money, they didn't trust them or the legalities of loaning to a government in trouble and in an election run up situation..... That is actually what happened, and I defy anyone to bring forward evidence that I am wrong... (no Khaosod reports please).

The PTP knew it had to pay the farmers, they held a meeting on dissolving parliament with the cabinet etc... Thaksin would have been involved all the way and not a single person including the Finance minister and Commerce minister who were handling the rice problem at that very time, ever bothered to speak up about sidelining the cash from central budget when they had the power to do so????... Come on man!!!

They knew exactly what they were doing and they hoped the financial pressure on the farmers would force them onto the streets of BKK to confront the protesters while the government were doing everything in their power to put the blame for delays on the PDRC.... It didn't work, in fact it backfired big time and only forced the rice farmers against the PTP.

The farmers may be uneducated, but they are far from stupid.

So you can stop with your silly red rhetoric, as it no longer works on this forum any more.

The rice scam and the delayed payments are the exclusive responsibility of the Thaksin led PTP government and no amount of twisting and spin will even fool uneducated farmers let alone educated westerners.

Maybe it would be a good idea to read the post before you call someone a liar. Arminbkk is spot, on so perhaps you can stop your silly yellow rhetoric.

[Eric Loh]

Here we go again. There are big declamations on how fast they will pay the farmers, but, of course, there is no money in the budget. Is it just not the same what the government did?? Empty promises??

Obviously, Thailand has no money. This is why the government was struggling to pay the farmers ready cash.

My thoughts exactly.

But when will this be represented in the value of the baht?

Soon I hope!

but in

Borrowing to offset budget deficit is normal in any country. In normal times, borrowing are either from bills or bonds but due to the coup, it will be difficult to sell and takes too long. Mind you, the rice scheme payment is only about 8% of total expenditure and not really big to influence to the debt to GDP ratio which is a healthy below 50%. Thailand also has about USD180B in reserve and the banks are flushed with liquidity. Don't worry about what the yellow trying to scare up the situation; Thailand has lots of money and the future economy is still good when all dust are settled.

[cloudhopper]

"Loans" are a euphemism for money creation by the sovereign bank and its minion banks. The rest is a dog and pony show to mask the resulting dilution of currency value. Every sovereign state does it.

[oldsailor35]

One thing for sure, there is no way that either Suthep or the Dems will be able to stop the army from getting loans. If they try to bully willing lenders as they did with Yingluck, the army will come down on them like a ton of bricks

[kimamey]

If they can't get the loans, they will get it from the central fund.... no real news here.

That would seem the most likely option which could make payments now with the loans repaying the central fund.

The only problem I can see is that I thought they'd already taken money from the central fund. Am I wrong or go they just need more?

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