Thai Govt: Farmers' debts to be waived

[webfact]

Govt: Farmers' debts to be waived

BANGKOK, 1 April 2015 (NNT) – In its latest bid to free farmers from indebtedness, the cabinet has approved a plan to waive part of their debts.

The debt restructuring plan will apply to three groups of agriculturists, namely agriculturists who are entirely devoid of potential to repay their loans, agriculturists with low potential to settle their debts and those with ability to repay their debts but have been affected by uncontrollable factors such as a ban on off-season farming or falling market prices.

The first group of farmers numbering 28,000 will be exempted from repaying their debts worth four billion baht in total. The second group of around 400,000, will be allowed to pay only interest for three years, after which they are to pay off their loans within 10 years. The scheme is expected to cost the government around 8.5 billion baht.

The third group of around 450,000, will be provided with debt-suspension, of which the period will be determined in line with their financial condition. Additional loans may be granted to the second and third groups on a case-by-case basis.

According to the Ministry of Finance, the scheme is not a populist policy or intended to spoil the farmers, adding that the Bank of Agriculture and Agricultural Cooperatives (BAAC) has been assigned to map out measures to prevent farmers from future indebtedness.


-- NNT 2015-04-01

[NextStationBangkok]

28,000 Farmers borrowed 4 Billion Baht, that is roughly 1,42,857.14/Head. I don't think any small farmers will borrow such a money.

Anyhow good for bringing happiness to the pockets!

[Crazy chef 1]

good to see that this "government" don't use populist schemes....

[canopus1969]

Well done Thai Visa - this is the best April Fools yet

[JOC]

That for sure will teach the farmers a lesson in accountability for their actions!! NOT

[JOC]

28,000 Farmers borrowed 4 Billion Baht, that is roughly 1,42,857.14/Head. I don't think any small farmers will borrow such a money.

Anyhow good for bringing happiness to the pockets!

I think you have got your comma's wrong??

It is about 140.000/farmer. Not a very astronomical amount!!

[manarak]

if that's true, then every farmer who is not indebted should receive the same amount !!!

[seajae]

they will probably all get on the p&ss tonight to celebrate, cant pay their loans but can get drunk as often as they like, buy whatever they want then expect the govt to cancel their repayments, only in Thailand......

[JOC]

they will probably all get on the p&ss tonight to celebrate, cant pay their loans but can get drunk as often as they like, buy whatever they want then expect the govt to cancel their repayments, only in Thailand......

Quite funny really!!

No matter the color of the leadership in this country, the uneducated farmers always seem to outsmart them!!

Reminds me of Farang/BG's, but that is another topic................

[Chris Lawrence]

Any Government officials in those numbers?

[Srikcir]

This is the second round of debt assistance and forgiveness. The message it sends is that there will be further rounds of support.

Who needs to grow anything for revenue? The government will just keep bailing people out of debt in ad nauseum.

The bottom line is that the government has no sustainable agricultural program.

[wow64]

If anyone else implemented this there would be street protests.

[englishoak]

According to the Ministry of Finance, the scheme is not a populist policy or intended to spoil the farmers

Thats exactly what it is, no less.

[retsdon]

Debt must be resolved, and if the amount is such that the loan is so large that it's impossible to repay, then the debt must be either rescheduled or forgiven. That's just how it works - you can't get blood from a stone.

This farmer problem, which anyone not simple could see coming a mile away, was caused by the widespread pushing of credit to the financially illiterate - the credit being supposedly secured by illiquid assets like land or farm stock. I don't mind betting that when these loans were granted, nobody in the bank ever required a proper forward cash flow projection, or any kind of evidence that there would be sufficient cash generated to meet repayments. Instead, it was just glance at the rocketing price of land in a bubble economy, do a back of the envelope calculation on loan v equity, and grant whatever the farmer asked up to a set percentage.

Well, here we are.

[issanaus]

To try and make more sense out of this article lets try and rearrange the "information"

This is a debt restructure plan that will clean up the accounts of the lenders consistent with prudent account and financial practices. If the loans in question are all to government owned banks there will not be any significant cash flow implication to the budget.

Group 1:

agriculturists who are entirely devoid of potential to repay their loans, numbering 28,000 will be exempted from repaying their debts worth four billion baht in total. So these are bad debts - pointless trying to recover the money. However by implication they will not be eligible for any loans in the future

Group 2:

agriculturists with low potential to settle their debts : doubtful debts which any organisation should have made provision for under "doubtful debts" as a special group of "assets" with an associated negative asset "provision for doubtful debts". A prudent organisation would take actions to try and reduce the number of the debts from falling in to the bad debt group

Group 3:

those with ability to repay their debts but have been affected by uncontrollable factors such as a ban on off-season farming or falling market prices.

Lending practices should have taken into account the effects of climates and seasons. However the impact of government actions need to also be considered. Included in the income expectations created by the rice scheme, increased levels of indebtedness caused by short term borrowings triggered by the non-payment for rice under the rice scheme. A prudent organisation would take actions to try and reduce the number of the debts from falling in to the bad debt group .

Groups 2 & 3 total of around 400,000, will be allowed to pay only interest for three years, after which they are to pay off their loans within 10 years. .

[webfact]

Debt-relief measures to waive Bt4 billion owed by farmers
THE NATION

BANGKOK: -- THE Bt4 billion in debt of some 28,000 Thai farmers who do not have the means to repay is to be written off, while other debt-relief measures are arranged for some 800,000 other farmers who owe a total of Bt112 billion.

Deputy Finance Minister Wisut Srisuphan said the scheme - approved by the Cabinet on Tuesday - was aimed at aiding 818,000 small farmers to whom the Bank for Agriculture and Agricultural Cooperatives (BAAC) had lent a total of Bt116 billion.

Each such farmer owes less than Bt500,000 to the BAAC.

The scheme, in effect from yesterday until March 31, 2016, will cover three groups of farmers through debt-clearing, debt restructuring, and extensions of their repayment periods.

The first group of 28,000 farmers with no means to repay debts totalling Bt4 billion will have their debts written off, he said.

The second group of 300,000-400,000 farmers with low repayment potential - owing a total of Bt48 billion - will be offered debt restructuring. The BAAC will suspend the repayment of principal for three years, although they would still have to pay interest as usual.

This group will be required to repay the principal within 10 years (extensions will be provided if necessary), he explained.

The BAAC will also lend up to Bt50,000 to each of them to support farming, he said, adding that Bt15 billion was set aside for this additional lending.

The third group comprises 450,000 farmers with high repayment potential who have been affected by factors such as the suspension of off-season rice cultivation due to water shortage or the slumping rubber price; they owe a total of Bt64 billion.

The BAAC will extend their repayment periods depending on each individual's potential and also waive fines, Wisut said. The BAAC will also lend up to Bt100,000 to each of them, with such additional loans totalling about Bt35 billion.

A report said that as of January 31, the BAAC had 3.52 million customers who owed a total of Bt766 billion - about Bt217,000 per head - and 9.24 per cent of the customers had problems with their debt-repayment capacity.

Source: http://www.nationmultimedia.com/national/Debt-relief-measures-to-waive-Bt4-billion-owed-by--30257228.html


-- The Nation 2015-04-02

[soalbundy]

they will probably all get on the p&ss tonight to celebrate, cant pay their loans but can get drunk as often as they like, buy whatever they want then expect the govt to cancel their repayments, only in Thailand......

You obviously don't live in a farming community.

[ezzra]

And this exactly what I was saying the other day as to why Thai house holds debts are maxed to the hilt,

and now you see it, they borrow irresponsibly and drive them selves in to a have hock knowing

full well that some bleeding heart PM or minister will wipe out such debt if the wait long enough,

who the hell can you teach fiscal responsibilities to any one in this country what the government

is to doing that,, wiping the ass of the heavily in debts 'farmers' every time they running

to cry Mommy.....

[NCC1701A]

another step towards a weaker baht... keep spending...

[BSJ]

You could probably estimate 10% to 15% of the recipients are drunks, dead beats and no-hopers but lets not lump all Thai farmers into the same basket.

I know there are plenty around my village who have not planted rice as the government requested or don't have water anyway.

[StefanBBK]

If farming is not profitable, then it can't be done. After all it is supposed to be a business.

Rather than a blanket forgiveness I would suggest using same mechanisms as for a personnel bankruptcy.

[Oziex1]

I live in Issan and sadly I see poor farming techniques, the small plots and old school practices have outlived their usefulness.

Time for a change agricultural schools and training, mechanisation, large tracts of land. Not going to happen overnight it must happen though and the current farmers may not be involved too stuck in outdated tradition and without the money to invest in the changes so necessary to improve yield.

[lvr181]

However by implication they will not be eligible for any loans in the future

"by implication"? Sure?

A well laid out post, nevertheless.

[MW72]

I have mixed feelings about this. What message does this send out? Get up to your eyeballs in debt but don't worry as someone else will pay for it. Then again farmers are providing the food we all eat and as is done in other countries there should be a subsidy to ensure that farmers can make a living. ( We all know what happened the last time there was a subsidy. Corruption messed that one up.) That's if you believe that food is a good thing for society.

Before we all jump on the band wagon and critisise, it is worth remembering the billions of debt our own governments are in from bailing out the greedy bankers who are still awarding themselves huge bonuses.

Given the choice I know which group I would chose to bail out. In the developed world it is capitalism for the poor and socialism for big business. The poor get their businesses and houses repossessed but big business gets a government bail out courtesy of the tax payer.

Edited April 2, 2015 by MW72

[Jonmarleesco]

'According to the Ministry of Finance, the scheme is not a populist policy ...' It's not. Well, that's ok, then.

[EnglishJohn]

Dear Pheu-Thai supporters,

Please shut up and hang your heads in shame. It's your fault this mess needs bailing out to this degree. Farmers took loans to plant as many rice crops as possible thinking they would be in easy street with all the money from the government. Which ran out because it was a completely unsustainable policy.

Please google 'shame' and try to imagine what it is.

[welshissan]

This is the second round of debt assistance and forgiveness. The message it sends is that there will be further rounds of support.

Who needs to grow anything for revenue? The government will just keep bailing people out of debt in ad nauseum.

The bottom line is that the government has no sustainable agricultural program.

This government(?) has no sustainable policies for anything, except rich boys toys, eg the high speed railways

[assayer]

28,000 Farmers borrowed 4 Billion Baht, that is roughly 1,42,857.14/Head. I don't think any small farmers will borrow such a money.

Anyhow good for bringing happiness to the pockets!

I think you have got your comma's wrong??

It is about 140.000/farmer. Not a very astronomical amount!!

I think you got your decimal point in the wrong place. My calculator says 140 million per farmer.

[MW72]

28,000 Farmers borrowed 4 Billion Baht, that is roughly 1,42,857.14/Head. I don't think any small farmers will borrow such a money.

Anyhow good for bringing happiness to the pockets!

I think you have got your comma's wrong??

It is about 140.000/farmer. Not a very astronomical amount!!

I think you got your decimal point in the wrong place. My calculator says 140 million per farmer.

I think it all depends on what the Thai translation is. In English speaking countries a billion is a thousand million (short scale) whereas in Europe and French and Spanish speaking countries a billion is a million million (long scale). The UK used to be the same as Europe but changed. SE Asia uses a different naming system so I couldn't say what billion they are talking about so one of you is right but which one? Imagine living in Canada where they use both systems. Confusing.

[Fat Haggis]

Dear Pheu-Thai supporters,

Please shut up and hang your heads in shame. It's your fault this mess needs bailing out to this degree. Farmers took loans to plant as many rice crops as possible thinking they would be in easy street with all the money from the government. Which ran out because it was a completely unsustainable policy.

Please google 'shame' and try to imagine what it is.

Yes there's lots of farang red supporters who cast their vote for the PTP in this forum isn't there.

I don't see very many Thai PTP supporters post here either

Google bullshit whilst your on a Google <deleted>!

It's all the fault of TVF farangs for the plight of the farmers then?

Google dilusional after you've looked up bullshit!!