Fund to buy back 3,000 million baht in debts owed by farmers to creditor banks

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Fund to buy back 3,000 million baht in debts owed by farmers to creditor banks



BANGKOK: -- The board of Farmers Rehabilitation and Development Fund headed by Deputy Prime Minister Somkid Jatusripitak will meet on Friday May 13 at the Government House to consider buying 3,000 million baht in debts owed to creditor banks by farmers.

The debt buyback is intended to resolve the debt problem of 19,494 farmers who are indebted to several creditor banks among them the Bank of Agriculture and Agricultural Cooperatives, farmers’ cooperatives and several commercial banks.

The biggest creditor bank is the BAAC who has 15,000 indebted farmers out of a total of 198,494 farmers whose debts are to be bought.

After the buyback, the Office of Farmers Rehabilitation and Development Fund will submit a list of indebted farmers to the debt management committee for consideration on monthly basis and any of them who are found to be unqualified will have their names deleted meaning that they will lose their privilege.

The debts which are to be bought back from creditor banks are emergency debts which are to be auctioned off.

Source: http://englishnews.thaipbs.or.th/content/162465


-- Thai PBS 2016-05-09

[jlwilliamsjr18]

First, this sounds like a populist policy. Second, this is how countries bankrupt themselves. Third, paying off people debts only reinforces further debts. Unsound, unique economic policies are endangering Thailand and it's people.

[ezzra]

Is there anything that this government and previous one didn't do for the farmers to help them in any

way possible, from buying their crops at inflated prices, debts moratoriums and simply throw buckets

of money at them again and again, and yet, those farmers are still poor and indebted to their necks,

dose this tells something about their abilities to mange their lives?....

[maoro2013]

Wasn't it recently stated that there were to be some loans to farmers (possibly others as well) to get them out from the clutches of loan sharks. Well the reason that these people go to loan sharks is that they could not get a loan from a normal lending institution, so how come they can now?

The whole idea is ridiculous.

[jossthaifarang]

3000 Million? Why not just say 3 Billion?

[skildpadden]

Why are these farmers in debt all the time - not only under the present and prevoius government, but all others? Is there a fundamental flaw in the Thai agriculture system that needs to be corrected? Is it too much power wielded by e.g. agrochemical companies? Are the farmers simply not effective in producing? Is the soil and climate no longer sustainable for their traditional way of farming?

You have Section 44 in hand - you have the power to actually to allocate not just my tax money, but also expertise to come up with proper long term solutions. I am not farming expert but e.g. encouraging crop rotation, co-ops, free schools for farmers to learn e.g. financial planning while waiting for the next harvest, identifying areas best suited for different crops, reduce dependency on use of chemicals, could be looked into?

[tuanku]

Is there anything that this government and previous one didn't do for the farmers to help them in any

way possible, from buying their crops at inflated prices, debts moratoriums and simply throw buckets

of money at them again and again, and yet, those farmers are still poor and indebted to their necks,

dose this tells something about their abilities to mange their lives?....

No, probably not, but it does tell us something about the social and economic conditions they are working under. Countries which don't look after their farmers have a danger they will not be able to rely on farm products. Many Western countries have recognised this and protect their agriculture sector from unreasonable debt by various means (not always successfully)

[chainarong]

This I would say this will go nowhere , it is quite a considerable sum 3 Billion and treasury will place a no go order on this , you can only do this noble cause when the country is not in debt ,Thailand cannot afford this type of programme , this Junta DPM is very similar from the previous PTP one , says a lot of popularist tripe and does nothing , just where this proposal will go, either that or Thailand will go down the gurgler..........................................

[wombat]

ask China....they are buying all th USA fed debt.

[dotpoom]

If the debts are to be "auctioned off"......won't the purchasers go looking for the debts to be paid up?

[tuanku]

Why are these farmers in debt all the time - not only under the present and prevoius government, but all others? Is there a fundamental flaw in the Thai agriculture system that needs to be corrected? Is it too much power wielded by e.g. agrochemical companies? Are the farmers simply not effective in producing? Is the soil and climate no longer sustainable for their traditional way of farming?

You have Section 44 in hand - you have the power to actually to allocate not just my tax money, but also expertise to come up with proper long term solutions. I am not farming expert but e.g. encouraging crop rotation, co-ops, free schools for farmers to learn e.g. financial planning while waiting for the next harvest, identifying areas best suited for different crops, reduce dependency on use of chemicals, could be looked into?

There is money in agriculture - CP foods profit for 2015 was 11,000 million baht, enough to buy off these debts more than 3 times over. These profits are not going to the small farmers who are squeezed by organisations like CP foods (Tesco, Makro, 7-11) on the prices they get for their produce in order to generate large retail profits.

One of the reasons for this is the failure of small farmers to organise themselves into larger groupings with more bargaining power, which is partly a failing in Government policies as this would need to be facilitated by the Ministry of Agriculture, but a powerful Bloc of farmers is the last thing this Government wants given their political allegiances.

[ExpatOilWorker]

3000 Million? Why not just say 3 Billion?

Household debt is currently 11 trillion baht (11,000,000 million) so 3 billion baht is just a drop in the big debt ocean of Thailand.

[dominique355]

Is there anything that this government and previous one didn't do for the farmers to help them in any

way possible, from buying their crops at inflated prices, debts moratoriums and simply throw buckets

of money at them again and again, and yet, those farmers are still poor and indebted to their necks,

dose this tells something about their abilities to mange their lives?....

No, probably not, but it does tell us something about the social and economic conditions they are working under. Countries which don't look after their farmers have a danger they will not be able to rely on farm products. Many Western countries have recognised this and protect their agriculture sector from unreasonable debt by various means (not always successfully)

To me, it seems the problem is that many farmers got into agro-business and stopped growing food. Not understanding the world market, they quickly lost tons of money.

Look at the rubber problem and the palm oil problem. Both not related to "traditional" farming, i.e. growing food. Both responsible to huge debts among Thai farmers.

This should not be supported by the government with populist policies.

[Srikcir]

This I would say this will go nowhere , it is quite a considerable sum 3 Billion and treasury will place a no go order on this , you can only do this noble cause when the country is not in debt ,Thailand cannot afford this type of programme , this Junta DPM is very similar from the previous PTP one , says a lot of popularist tripe and does nothing , just where this proposal will go, either that or Thailand will go down the gurgler..........................................

treasury will place a no go order on this

NCPO owns the Treasury.

This program would be off-budget and require NLA approval. Prayut's cabinet sends the proposal to the NLA and funding is approved unopposed, ie., 180 yeas." Since the FY 2016 budget is in a deficit, issuance of treasury bonds must be issued by the Treasury who has no say over the issuance.

[tuanku]

Is there anything that this government and previous one didn't do for the farmers to help them in any

way possible, from buying their crops at inflated prices, debts moratoriums and simply throw buckets

of money at them again and again, and yet, those farmers are still poor and indebted to their necks,

dose this tells something about their abilities to mange their lives?....

No, probably not, but it does tell us something about the social and economic conditions they are working under. Countries which don't look after their farmers have a danger they will not be able to rely on farm products. Many Western countries have recognised this and protect their agriculture sector from unreasonable debt by various means (not always successfully)

To me, it seems the problem is that many farmers got into agro-business and stopped growing food. Not understanding the world market, they quickly lost tons of money.

Look at the rubber problem and the palm oil problem. Both not related to "traditional" farming, i.e. growing food. Both responsible to huge debts among Thai farmers.

This should not be supported by the government with populist policies.

Point taken, but I don't think this is the majority of the loan defaulters. I believe they are mostly small farmers of rice and other food crops, with land that is marginal in both size and quality, who have to gamble each year with loans for seeds and chemicals hoping that there will be enough water, not too many storms and a decent price when the harvest comes. Too often that gamble doesn't pay off.

[noosard]

The farmers are not getting the money

The banks are

Which will loan the money again to some other unprofitable end

[wabothai]

Have these morons never learned from the US trade in mortgage loans ending up in a total tragedy?

[Eric Loh]

Considering that the establishment is always finding ways to reduce tax payers money to help the poor so they have a larger pie for the spendings like military hardwares, I say this is good Thaksinomic move by Somkid.

[swerver]

Why are these farmers in debt all the time - not only under the present and prevoius government, but all others? Is there a fundamental flaw in the Thai agriculture system that needs to be corrected? Is it too much power wielded by e.g. agrochemical companies? Are the farmers simply not effective in producing? Is the soil and climate no longer sustainable for their traditional way of farming?

You have Section 44 in hand - you have the power to actually to allocate not just my tax money, but also expertise to come up with proper long term solutions. I am not farming expert but e.g. encouraging crop rotation, co-ops, free schools for farmers to learn e.g. financial planning while waiting for the next harvest, identifying areas best suited for different crops, reduce dependency on use of chemicals, could be looked into?

There is money in agriculture - CP foods profit for 2015 was 11,000 million baht, enough to buy off these debts more than 3 times over. These profits are not going to the small farmers who are squeezed by organisations like CP foods (Tesco, Makro, 7-11) on the prices they get for their produce in order to generate large retail profits.

One of the reasons for this is the failure of small farmers to organise themselves into larger groupings with more bargaining power, which is partly a failing in Government policies as this would need to be facilitated by the Ministry of Agriculture, but a powerful Bloc of farmers is the last thing this Government wants given their political allegiances.

Ha you forgot one CENTRAL GROUP. it just spend 25 Billion or Thai style (25,000 million) buying 49% percent of Big C from Casino Investment in Paris. The other 51% went to two (2) other Thai buyers. Talk about money flushing around in Thailand? But the family type farmers generation after generation are only making a hand to mouth existence. By this so called auctioning off more of the family type farming will lend up in the grubby claws of the BIG Boys, CP for a starter. A scandal over corporate governance erupted in Dec. 2015 when CP All, kept executives in their position after the Sec fined them record amounts for insider trading. If it isn't food its Insurance Chairman of Bangkok Insurance was fined for disclosing a proposed dividend to people who then purchased BKI shares, the Sec said. The Sec banned Chai from taking executive roles in financial sector companies for three years. And so thing roll along in LOS.

[Berty100]

3000 Million? Why not just say 3 Billion?

Household debt is currently 11 trillion baht (11,000,000 million) so 3 billion baht is just a drop in the big debt ocean of Thailand.

I would like to see a link to a credible source for that.

I feel that you confuse your figures with those from the US.

[Berty100]

Why are these farmers in debt all the time - not only under the present and prevoius government, but all others? Is there a fundamental flaw in the Thai agriculture system that needs to be corrected? Is it too much power wielded by e.g. agrochemical companies? Are the farmers simply not effective in producing? Is the soil and climate no longer sustainable for their traditional way of farming?

You have Section 44 in hand - you have the power to actually to allocate not just my tax money, but also expertise to come up with proper long term solutions. I am not farming expert but e.g. encouraging crop rotation, co-ops, free schools for farmers to learn e.g. financial planning while waiting for the next harvest, identifying areas best suited for different crops, reduce dependency on use of chemicals, could be looked into?

There is money in agriculture - CP foods profit for 2015 was 11,000 million baht, enough to buy off these debts more than 3 times over. These profits are not going to the small farmers who are squeezed by organisations like CP foods (Tesco, Makro, 7-11) on the prices they get for their produce in order to generate large retail profits.

One of the reasons for this is the failure of small farmers to organise themselves into larger groupings with more bargaining power, which is partly a failing in Government policies as this would need to be facilitated by the Ministry of Agriculture, but a powerful Bloc of farmers is the last thing this Government wants given their political allegiances.

Ha you forgot one CENTRAL GROUP. it just spend 25 Billion or Thai style (25,000 million) buying 49% percent of Big C from Casino Investment in Paris. The other 51% went to two (2) other Thai buyers. Talk about money flushing around in Thailand? But the family type farmers generation after generation are only making a hand to mouth existence. By this so called auctioning off more of the family type farming will lend up in the grubby claws of the BIG Boys, CP for a starter. A scandal over corporate governance erupted in Dec. 2015 when CP All, kept executives in their position after the Sec fined them record amounts for insider trading. If it isn't food its Insurance Chairman of Bangkok Insurance was fined for disclosing a proposed dividend to people who then purchased BKI shares, the Sec said. The Sec banned Chai from taking executive roles in financial sector companies for three years. And so thing roll along in LOS.

You are spewing some drivel. Central didn't buy Big C at all.

[scorecard]

Is there anything that this government and previous one didn't do for the farmers to help them in any

way possible, from buying their crops at inflated prices, debts moratoriums and simply throw buckets

of money at them again and again, and yet, those farmers are still poor and indebted to their necks,

dose this tells something about their abilities to mange their lives?....

Another point, somebody (good leadership) needs to carefully educate people that small scale farming produces little more than survival and it will get worse rather than better.

If Thailand wants to (and I hope it does) get all Thais into a much better quality of life then small scale farming needs to be carefully retired but with absolute respect to the farmers concerned and by ensuring they gain the skills and opportunities to move into something different.

What also must come with it is serious controls on monopolies etc.

Not easy but if the will if there it can be done, and it will take some time.

[Doc46]

This is Bad business,,,, now they got away with their Debt there will be Many more to follow,,

[ExpatOilWorker]

3000 Million? Why not just say 3 Billion?

Household debt is currently 11 trillion baht (11,000,000 million) so 3 billion baht is just a drop in the big debt ocean of Thailand.

I would like to see a link to a credible source for that.

I feel that you confuse your figures with those from the US.

Link provided: http://www.thailand-business-news.com/banking/53291-household-debts-hit-highest-8-years-filling-pockets-thai-loan-sharks.html

Household debt rose to 10.8 trillion baht or 81.1% of GDP in last year's third quarter, up from 10.7 trillion baht or 80.6% in the second quarter, according to Bank of Thailand data.

Edited May 9, 2016 by ExpatOilWorker

[Jonmarleesco]

A strategy to teach farmers some basic economics and accounting skills would be more productive. All this process will do is add to the taxpayer's load and encourage the farmers to take on yet more debt.

[connda]

The banks are sitting on 3 billion THB in loans and the government steps in to 'bail' them out.
That doesn't bode well imho.

[phoenixdoglover]

This is a bailout of banks holding bad debt, not a bailout of the farmers in debt.

Government buys the debt, auctions it, and new debt servicers take up the task of collection.

Meanwhile, banks that made risky loans to farmers get to clean up their portfolios, courtesy of taxpayer funds. All set for the next round of ill-advised lending.

[ExpatOilWorker]

3000 Million? Why not just say 3 Billion?

Household debt is currently 11 trillion baht (11,000,000 million) so 3 billion baht is just a drop in the big debt ocean of Thailand.

I would like to see a link to a credible source for that.

I feel that you confuse your figures with those from the US.

Link provided: http://www.thailand-business-news.com/banking/53291-household-debts-hit-highest-8-years-filling-pockets-thai-loan-sharks.html

Household debt rose to 10.8 trillion baht or 81.1% of GDP in last year's third quarter, up from 10.7 trillion baht or 80.6% in the second quarter, according to Bank of Thailand data.

Things aren't too shabby at on of the best banks in the country either: "In the first quarter of 2016, KBank's bad loans rose by 39.6% to 52.99 billion baht"

Non preforming loans (NPL) is steadily raising in almost all of the domestic banks.

[ExpatOilWorker]

The banks are sitting on 3 billion THB in loans and the government steps in to 'bail' them out.

That doesn't bode well imho.

Thai banks are sitting on 338 billion baht in NPL as of end of Q1 2016.

Keep in mind loans that have not been services for up to 90 days are not yet classified as NPLs, so the number is certainly higher.