Unions blast rice loan scheme

The Government Savings Bank’s 20-billion-baht loan to the Bank for Agriculture and Agricultural Cooperatives (BAAC) came under strong opposition by their labour unions yesterday, casting doubts on the government’s bid to begin paying farmers for the rice sold under the pledging scheme today.

The caretaker govenment, however, insisted the farmers will gradually receive long-overdue money from today.

The labour union of GSB yesterday issued a statement calling the management to cancel the loan to the BAAC, saying the deal was undermining depositors’ trust for the bank.

It called on the management to seek the return of the transferred fund and suspend any lending that would affect confidence in the bank.

The union demands the management to immediately stop lending to the BAAC, call back previous loans provided to the BAAC and stop any transaction which will cause the clients’ confidence to erode.

The move came after a campaign on social networks to withdraw deposits from the GSB is spreading, following reports that the lending would be used to pay for the farmer’s rice pledging debts.

Representatives of the BAAC labour union said yesterday it was not clear where the money earmarked to pay the farmers came from.

The union was ready to take action if it turned out the cash came from the GSB’s loan.

At yesterday’s press conference, GSB president Worawit Chailimpamontri said the lending of 20 billion baht was not meant to support the troubled rice pledging scheme.

When the board was asked to approve the lending, there was “no request’’ that the money would be used to fund the rice pledging scheme, he said.

Of the total credit line, a few billion baht was transferred to the BAAC, he said.

Mr Worawit also asked the depositors not to withdraw their money from the bank following a report that the online community was urging people to withdraw and close their accounts with the GSB.

He said the lending will not put the depositors’ money at risk, adding that the GSB also extended interbank loans worth more than a hundred billion baht to 35 more banks.

Speculation was high that the cash would be used to pay the farmers’ debts as caretaker Commerce Minister Niwatthamrong Bunsongphaisan assured yesterday that the BAAC would today start paying the farmers.

According to the minister, the BAAC is expected to pay an average of 4 billion baht per day.

It is hoped the partial payment will take the heat off the government which needs about 130 billion baht to pay the more than 1 million farmers participating in the scheme.

Mr Niwatthamrong said the government has tens of billions of baht to pay off the debts. The sources of the fund come from loans and sales of rice stocks.

‘’Every branch of BAAC will pay on the basis of first-come-first-serve,” Mr Niwatthamrong said. “Those who pledged the rice first will be paid first. BAAC can pay an average of 4 billion baht per day.

‘‘So there is no need for farmers to come to Bangkok to protest. The money will be transferred to their accounts with the BAAC.’’

Mr Niwatthamrong said that the ministry expects to raise 7 billion baht from an auction of 460,000 tonnes of rice and a separate sale of 200,000 tonnes.

The Department of Foreign Trade organised an auction of 600,000 tonnes of rice on Wednesday and had a purchase order from overseas totalling 200,000 tonnes, he said.

This sale excluded another batch of 220,000 tonnes of the rice put on the Agricultural Futures Exchange of Thailand (AFET), he said.

The sale through AFET is expected to fetch more than 1 billion baht.

Caretaker Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong wrote on his Facebook page that every farmer under the rice-pledging scheme will receive the full amount of money based on their rice pledging documents.

The Finance Ministry and the BAAC has a joint duty to pay the money to the farmers as soon as possible.

‘’The government would like to confirm our sincerity in fully working for the farmers. Now, this is an occasion that will show who is sincere with farmers and who is trying to use the farmers’ sufferring as political tools,’’ he wrote.

However, the minister’s assurance failed to encourage the farmers to return home.

Rawee Rungruang, leader of a network of rice farmers from six western provinces, said the caretaker government is buying time.

Mr Rawee said that the farmers will today rally at the Office of the Defence Permanent Secretary to demand the government pay the debts within seven days.

Share your thoughts

Discussion 1 : 17/02/2014 at 01:02 PM
Getting cash from the left and pay the right pocket !
Discussion 2 : 17/02/2014 at 12:47 PM
Basically they need to be auctioning 200,000 tonnes every single day for the next month to cover this, an impossible task. The GSB money is a stop gap that has to be paid back, and it omits new rice entering the scheme from the winter crop. Either way farmers are now looking at 2-3 months delay minimum. Why they insist on continuing the pledge without any modification is beyond belief, its vote suicide.
Discussion 3 : 17/02/2014 at 12:15 PM
Do not expect the government in its present state of disarray to do other than beaver its way out of a blocked dam.
Discussion 4 : 17/02/2014 at 11:29 AM
It is highly suspicious that all of a sudden the finance ministry says they have the money to pay all the farmers, and the GSB says the money loaned was not specified for farmer payments, yet last week the finance ministry was broke. Under the court verified election laws a caretaker government can not take out loans. The GSB just stated that not all of this bank to bank loan went to the bank, and earlier it was stated that the finance minister signed a loan letter. It seems there are again little white lies being told by someone. The farmers deserve to be paid, but not illegally. This must be thoroughly investigated.
Discussion 5 : 17/02/2014 at 09:56 AM
"GSB president Worawit Chailimpamontri said the lending of 20 billion baht was not meant to support the troubled rice pledging scheme" - "Mr Niwatthamrong said the government has tens of billions of baht to pay off the debts. The sources of the fund come from loans and sales of rice stocks." So why did they need the GSB loan? How much rice was sold? What are these loans Mr. Niwatthamrong talks about? Why didn't they talk about paying before they got the loan from the GSB?

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