World Bank: Adapt help for rice farmers

The caretaker government should find alternative ways of helping rice farmers to minimise the impact of problems caused by its inability to pay for rice under its pledging scheme, Kirida Phaophichit, a senior economist at the World Bank’s Bangkok office, said on Tuesday.

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Officials should look for alternatives to help farmers because the caretaker administration has been unable to pay for pledged rice since the House of Representatives was dissolved at the end of last year, she said.

Farmers would benefit from work to enhance the development of different rice varieties and irrigation systems and improve soil quality in order to increase production output and quality, she said.

Delays in paying farmers 120 billion baht for rice - or about 1% of gross domestic product (GDP) - have stripped farmers of their income and resulted in a spending and consumption slowdown in the agricultural sector, Ms Kirida warned.

If rice farmers are paid what they are owed, that would boost domestic consumption and help spur economic growth, she added.

The senior economist said the rice scheme has done well to raise the income of farmers, but has led to total damages of 400 billion baht, or 2% of GDP, over the past two harvest seasons.

This is because the government failed to release rice in stockpiles, preventing it from making payments on time and forcing it to seek additional loans to finance the scheme, she said, arguing that the management of the rice scheme must be improved to prevent it from affecting the country’s fiscal status.

Ms Kirida said other state projects that risk damaging the country’s fiscal status include the 350-billion-baht water resources management and flood control scheme and the 2-trillion-baht infrastructure investment plan.

These investment projects should be pushed ahead because they will enhance sustainable economic growth, but their implementation must be transparent and cost-effective, she said.

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