PM wants farmers’ debt problem solved urgently

[Lite Beer]

PM wants farmers’ debt problem solved urgently

BANGKOK, 1 August 2015 (NNT) - Prime Minister Prayut Chan-o-cha has expressed concerns over 1.9 million indebted farmers nationwide and ordered urgent solutions to the problem. He emphasized that the farmers should be saved from losing their farmland

Deputy Government Spokesman Maj.Gen. Sansern Kaeokamnerd said the PM was worried about the debt problem of Thai farmers after he learned that there were more than 1.6 million of them with a combined debt of around 388 billion baht or 237,000 baht per person on average. Gen. Prayut said there must be measures to prevent them from losing their farmland and instructed relevant government units to make sure that the farmers' debt problems would be solved at the root cause level.

The PM also urged the government units to launch assistance measures such as projects on vocational rehabilitation, business networking, development of model communities for self-managed production and registration of farmers with informal debt.

More than 105,000 farmers with informal debt with a combined debt of 11 billion baht have registered with the Bank of Agriculture and Agricultural Cooperatives. The Government Savings Bank has registered 4,450 others whose debt totals 542 million baht.

-- NNT 2015-08-01

[worgeordie]

What did they do with all the extra money they earned on selling rice at

well over what it was on World market,Oh yes take on more debit,I just

have to buy a new pick up,saving for a rainy day,whats that.?

regards Worgeordie

[FangFerang]

It's another step in the right direction for this no-corruption government. Obviously, populist policies are only initiated by the opposition. This government wants to help. It's not populist. Mission accomplished!

[26vinny]

All talk again with so many poor farmers working their way out of poverty, only to lose everything to corrupt government officials. STOP TALKING ABOUT IT and give them their money back

[Eric Loh]

Give him credit for not blaming anyone or anything for the problem.

[SOUTHERNSTAR]

What did they do with all the extra money they earned on selling rice at

well over what it was on World market,Oh yes take on more debit,I just

have to buy a new pick up,saving for a rainy day,whats that.?

regards Worgeordie

The average farm size is under 5 hectares and the average rice yield is +- 3 tons per hectare. The rice scheme was inplace for 2011 to 2013 - 3 years. The average breakeven point per hectare is around the 2 tons per hectare level. The average farmer thus harvested 15 tons of rice per year (5 hectares x 3 tons per hectare) of which 10 tons went towards paying for costs (5 hectare x 2 tons per hectare). That left the average farmer with 5 tons profit and at B 15 000 per ton of rice it is equal to B 75 000. The minimum wage is B 9000 per month or B 108 000 per year per worker. As most farmers consist of a husband and wife team their income was B 141 000 per year below the minimum wage (B 108 000 X 2 - B 75 000). What were they supposed to save ?

Even if these farmers cut their production costs with 50 % (1 ton per hectare breakeven point instead of the 2 ton per hectare used) the average rice farmer with the high rice scheme prices would have still been B 66 000 below the minimum wage. That is why farmers laughed at the government them they said that they will ask production input suppliers to cut their costs. The problem is not the production costs, but the size of the farms and the low yields.

[elgordo38]

What did they do with all the extra money they earned on selling rice at

well over what it was on World market,Oh yes take on more debit,I just

have to buy a new pick up,saving for a rainy day,whats that.?

regards Worgeordie

Farmers are no different than regular Thai's in this manner just look out the window at all the new vehicles going by. I know of 4 people with new vehicles that received bank loans and the banks should have never made the loan. We not only transferred jobs to Asia but we also transferred the "borrow beyond your means" mentality. Yes it has raised Asia up by its bootstraps along with borrow till your broke mentality. Everybody thinks that credit is the magic solution to problems. Credit used wisely is good but misused can spell disaster. Cheap credit is an addiction. If it is ever taken away well you know what will happen. We are suffering from credit obeseness and better start to diet soon.

[Thai at Heart]

Well, patently the only solution us quotas and subsidies or debt relief. Anyone got another idea?

[SOUTHERNSTAR]

Well, patently the only solution us quotas and subsidies or debt relief. Anyone got another idea?

There is no sustainable short term sollution. The longterm sollutions however will need political legitimacy to implement and this government will thus not be able to do so.

The first step is to stabilise the farm sector by providing targeted support to those who really need it.

Step 2 is to start a program that will enable children of farmers to study further to enable them to leave the farming sector or if they want to farm provide them with the correct education to do so successfully.

Step 3 establish a landbank that will enable sucessful small farmers to buy other struggeling small farmers. The landbank can provide longterm affordable finance.

Step 4 run educational and farm management programs for those farmers that want to improve their knowledge and skills. This programme can be linked to the landbank finance. If a farmer achieve certain educational objectives, he/she can get an interest rate discount etc etc.

Step 5 real research into better cultivars to increase yields. (at present Thai rice produce half of that of Vietnam).

Step 6 scrap the high speed trains and spend the money on improving the irrigation supply system as well as the on farm irrigation systems. At present +- 30% of irrigation water gets waisted.

Step 7 phase out farm subsidies other a 10 year period. Government should negotiate with farmers present levels of subsidies and the phasing out of these subsidies. To promote young people entering the farming sector a subsidy scheme can be put into place to help them start out for the first 5 years.

Step 8 the government should promote marketing co-operatives that will cut out the millers. Most of the profit on rice are made at this level. Many millers cheat the farmers by downgrading their rice (thus paying them less) and selling it at the correct grade for much more. In a co-operative setup there will be no incentive to cheat the farmers.

[Thai at Heart]

Well, patently the only solution us quotas and subsidies or debt relief. Anyone got another idea?

There is no sustainable short term sollution. The longterm sollutions however will need political legitimacy to implement and this government will thus not be able to do so.

The first step is to stabilise the farm sector by providing targeted support to those who really need it.

Step 2 is to start a program that will enable children of farmers to study further to enable them to leave the farming sector or if they want to farm provide them with the correct education to do so successfully.

Step 3 establish a landbank that will enable sucessful small farmers to buy other struggeling small farmers. The landbank can provide longterm affordable finance.

Step 4 run educational and farm management programs for those farmers that want to improve their knowledge and skills. This programme can be linked to the landbank finance. If a farmer achieve certain educational objectives, he/she can get an interest rate discount etc etc.

Step 5 real research into better cultivars to increase yields. (at present Thai rice produce half of that of Vietnam).

Step 6 scrap the high speed trains and spend the money on improving the irrigation supply system as well as the on farm irrigation systems. At present +- 30% of irrigation water gets waisted.

Step 7 phase out farm subsidies other a 10 year period. Government should negotiate with farmers present levels of subsidies and the phasing out of these subsidies. To promote young people entering the farming sector a subsidy scheme can be put into place to help them start out for the first 5 years.

Step 8 the government should promote marketing co-operatives that will cut out the millers. Most of the profit on rice are made at this level. Many millers cheat the farmers by downgrading their rice (thus paying them less) and selling it at the correct grade for much more. In a co-operative setup there will be no incentive to cheat the farmers.

The average age of farmers is way beyond be able to teach them to do something else. The villages in Isaan are filled with grandparents. The kids have all left.

They can't plan for them to leave. Just pension them off and plan to move away from smallholding and add mechanisation. They won't do it though. They just basically have to plan to have massive problems because the aged system they use just isn't profitable enough to sustain a family.

No way, no how. Just pay them to grow less. A subsidy. Simple.

[djjamie]

I bet Prayuts way of saving the farmers is NOT to give politicians, warehouse owners and millers 1 trillion baht and then promise the farmers they will be paid and never pay them!!

Well done on Prayut for understanding that the farmers are no better off than they were before and for the farmers sake I hope their suffering is alleviated.

Remember folks it does not matter who helps the farmers as long as they are helped right..Unless some want to see the farmers suffer so they can be smugly and insolently state that Paryut has failed the farmers.

If he ignores them he has abandoned them. If he offers support he is a populist.

Damned if he does and damned if he doesn't.

[wabothai]

Just do like Europe with the Greeks. Extend loans, control expenditures and educate the farmers.

Mandatory schooling. No show, no money.

NO OTHER WAY

[ezzra]

Re born again, I would like to be a farmer in Thailand, clueless, hapless but under the constant, never

ending care of the Thai government, no matter what I do or how I miss mange my farming business,

no matter how I screw up and falter, Pap Pm will always be to the rescue with freebees, debts

moratorium, loans, assistant and all around care....

[Pib]

Just another news release from the National News Bureau of Thailand which is part of the Govt Public Relations Department....the NNT releases are almost always warm & fuzzy, pro-govt articles (regardless of party in power). NNT is like a cheerleader for the govt.

[tuanku]

There is a pretty good theory around that small farmers should aim for self sufficiency by diversifying, having a few pigs, a fish pond, some chickens, ducks, a vegetable plot, a few fruit trees. Whatever land and time is left over could then be used for their cash crop. It would be easy enough to move down this road because it has support at the highest level. What would be needed to get this going nationwide?

[Charlie Croker]

There are banking solutions to help nano banking for example, with minimal interest and rules about not using loans to buy cars and to ensure the loans go toward building their SME.

One of the big problems is that the farmers make up a chunk of the consumer population. With them mired in debt, they aren't buying anything and they might be failing to manage their businesses correctly. But they also might be in danger of becoming NPL's. Which could get out of control and become a whole other problem.

Its a difficult situation, Maybe the government will legislate the NES teaching population to subsidize a family each from their excessive wages?

In truth most societies are currently afraid of their domestic debt issues. As there is a whisper of impending doom.

[marcusd]

This is So easy to resolve and all they have to do is look at Zimbabwe. they did it. Take all the WHITE guys land and money and hand it over! EASY. And it seems the way this place is being run, that's what will happen. Bye bye Condos and whatever else.

[marcusd]

All talk again with so many poor farmers working their way out of poverty, only to lose everything to corrupt government officials. STOP TALKING ABOUT IT and give them their money back

Better to educate these farmers rather than give them this and that and keep them as slaves for whoever rules. Because that is what is happening from one government to the next and the farmers don't know how to really manage their affair\s. that takes EDUCATION not some gift from whoever is in power on the day.

[marcusd]

What did they do with all the extra money they earned on selling rice at

well over what it was on World market,Oh yes take on more debit,I just

have to buy a new pick up,saving for a rainy day,whats that.?

regards Worgeordie

The average farm size is under 5 hectares and the average rice yield is +- 3 tons per hectare. The rice scheme was inplace for 2011 to 2013 - 3 years. The average breakeven point per hectare is around the 2 tons per hectare level. The average farmer thus harvested 15 tons of rice per year (5 hectares x 3 tons per hectare) of which 10 tons went towards paying for costs (5 hectare x 2 tons per hectare). That left the average farmer with 5 tons profit and at B 15 000 per ton of rice it is equal to B 75 000. The minimum wage is B 9000 per month or B 108 000 per year per worker. As most farmers consist of a husband and wife team their income was B 141 000 per year below the minimum wage (B 108 000 X 2 - B 75 000). What were they supposed to save ?

Even if these farmers cut their production costs with 50 % (1 ton per hectare breakeven point instead of the 2 ton per hectare used) the average rice farmer with the high rice scheme prices would have still been B 66 000 below the minimum wage. That is why farmers laughed at the government them they said that they will ask production input suppliers to cut their costs. The problem is not the production costs, but the size of the farms and the low yields.

Ah yes, you FORGOT that tourism also collapsed at this same time so the children were not able to assist the families with attending educational facilities like the university Of Pattaya and sell their bodies to help mum and dad who don't care how the kids get the money as long as it comes home.

I know because I am treating these poor darlings IDS conditions for free!

Those farmers are not as wonderful as you and other think. Poor yes - uncaring about their kids - Yes - stupid - yes abused by those in power - yes ... not many no's eh?

[Thai at Heart]

Re born again, I would like to be a farmer in Thailand, clueless, hapless but under the constant, never

ending care of the Thai government, no matter what I do or how I miss mange my farming business,

no matter how I screw up and falter, Pap Pm will always be to the rescue with freebees, debts

moratorium, loans, assistant and all around care....

Yeah, indeed, the average Thai farmer is living it large out there. It's milk and honey all the way out there.

[espinoza]

Hi I`m a rice farmers breadwinner. Can you help me also? I cannot afford this anymore.

[jerojero]

Farmers should be saved? Surely not a populist sentiment from dear PM! What about the other 97% of the population? If this and former governments provided better rural education, including farming advances, etc, put proper control on stupid lenders (lending willy nilly) and outlawing loan sharks, then 2 million farmers might not need saving.

Edited August 1, 2015 by jerojero

[Senechal]

The "problem" of debt is always solved by the creation of new debt. It's an age-old scam which pretends to benefit the debtor, but in fact mires the debtor even deeper in unpayable debts -- while at the same time enabling creditors to create new debts and collect new fees.

It's a near-term win for the banks and the bankers -- and in reality just pushes forward the day-of-reckoning further into the future.

What we need are defaults -- so that bankers must be forced to realize their (already incurred) losses instead of being allowed to play games with restructuring.

Gen. Prayut said there must be measures to prevent them from losing their farmland and instructed relevant government units to make sure that the farmers’ debt problems would be solved at the root cause level.

The "root cause" was the initial creation of debt.

Right. So let's not do that again.

Edited August 1, 2015 by Senechal

[MaiChai]

There is a pretty good theory around that small farmers should aim for self sufficiency by diversifying, having a few pigs, a fish pond, some chickens, ducks, a vegetable plot, a few fruit trees. Whatever land and time is left over could then be used for their cash crop. It would be easy enough to move down this road because it has support at the highest level. What would be needed to get this going nationwide?

This is very wise and what my wife's family do. The priority is always to fill the rice barn to provide food to eat, maintain a vegetable garden, rather than producing crops to sell and then needing money to buy food. That then means only small quantities of meat need to be bought and everything else is self provided. Obviously there are cash crops too but food wise the family is almost self sufficient. Even timber is harvested for building and making furniture. The family don't smoke, drink alcohol, party away their money nor waste money showing face, so overall they do quite OK. Edited August 1, 2015 by MaiChai

[MW72]

Re born again, I would like to be a farmer in Thailand, clueless, hapless but under the constant, never

ending care of the Thai government, no matter what I do or how I miss mange my farming business,

no matter how I screw up and falter, Pap Pm will always be to the rescue with freebees, debts

moratorium, loans, assistant and all around care....

And why not? Its a refreshing change from the west where we let the poor and hapless small guy fall flat on his face because that's how the capitalist market should work. But when it comes to the big financial institutions, they suddenly become "too big to fail" and instead of letting them fail as should happen in a capitalist market, we bail them out. Capitalism for the poor and socialism for the rich.

The big question is, can the PM pull this off without too much money going to the wrong people as has happened in the past. If he does I will happily eat humble pie and congratulate him. Having worked with military types for a good number of years I don't hold out much hope. The phrase "couldn't organise a pi$$ up in a brewery" springs to mind when I think of the military hierarchy. Wasting money is the one thing they excel at.