More arm-twisting after rice bid delay

A caretaker deputy finance minister will try to persuade the board of the Bank for Agriculture and Agricultural Cooperatives (BAAC) to advance payments to unpaid farmers under the rice-pledging scheme.

In his capacity as board chairman, Tanusak Lek-uthai has called an urgent meeting for next Monday to convince the board to use the BAAC's liquidity before the scheme runs out of money in a few days.

He admitted the government will not be able to continue paying the farmers if the BAAC does not help it.

The Commerce Ministry's rice sales have missed the target of 1 million tonnes worth 12 billion baht per month, he said, adding that in some months the ministry has fetched a mere 3 billion baht.Farmers have pledged 9.97 million tonnes of paddy worth almost 100 billion baht during the start of the 2013-14 main crop from Oct 1 to Jan 7.

The BAAC, which is responsible for handling payments to farmers, has paid 50 billion baht to farmers who pledged 3.5 million tonnes of paddy.

The government's hope to use 55 billion baht of the BAAC's liquidity was dashed after the bank's board refused to comply, saying the cabinet's Jan 7 resolution was unclear.

Mr Tanusak said the resolution did not specify the amount it wanted the BAAC to advance, and the state bank is concerned the paddy to be pledged for the current main crop may reach 190 billion baht, exceeding the target of 160 billion.

If the BAAC's board allows the state-owned bank to use 55 billion baht for the scheme, the bank will still have 110 billion baht in liquidity, a level sufficient to maintain stability, he said.

The situation was made worse when the Commerce Ministry postponed its planned 150,000-tonne auction via the Agricultural Futures Exchange of Thailand by a week to next Wednesday from yesterday, citing inconveniences caused by the rallies.

Disgruntled farmers have threatened to sue the caretaker government for losses incurred from the late payments.

Prasit Boonchuey, president of the Thai Farmers Association, said members nationwide agreed to file a lawsuit against the government.

"The government's confession shows it breaches the contract. It has already accepted our paddy into the scheme and failed to pay us for three months so far," he said.

"We will take legal action to demand repayments plus interest as most farmers have to borrow to pay for daily expenses during the period."

Mr Prasit said the members are collecting information about the losses and consulting legal issues with the Lawyers Council of Thailand. Their estimated losses are 80 billion baht.

"The farmers must take action right now, as the government has broken its promise [to pay farmers in the current main crop] several times," he said.

"It earlier said it could not pay due to protesters occupying the Finance Ministry, but this is no longer the case. This shows the government lacks sincerity and tells lies."

Thai Agriculturist Association president Wichien Phuanglamjiak said large numbers of farmers in Phichit, Nakhon Sawan, Sukhothai, Ayutthaya and Kamphaeng Phet and almost all provinces in the North are complaining about the late payments by the government.

They are consulting lawyers about filing a class-action lawsuit against the government, with many threatening to join the protests led by the People's Democratic Reform Committee, he said.

"Most of the farmers are suffering, as they have not been paid for three or four months," Mr Wichien added.

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