Thai rice farmers paid $2.9 billion of arrears, state bank says

BANGKOK Tue Jun 17, 2014 3:56am EDT

A Thai farmer works on his rice field in Nonthaburi province, on the outskirts of Bangkok March 1, 2014.   REUTERS/Chaiwat Subprasom

A Thai farmer works on his rice field in Nonthaburi province, on the outskirts of Bangkok March 1, 2014.

Credit: Reuters/Chaiwat Subprasom

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BANGKOK (Reuters) - Thailand's military government has paid rice farmers all the arrears of 92.4 billion baht ($2.86 billion) owed under a controversial state purchase scheme, a senior official of the bank that funded the program said on Tuesday.

The move ended the government's biggest expenditure on the costly scheme, following a vow by the junta government to halt it for now. Farmers had been waiting for their money since last October.

"The government and the BAAC have managed to pay all those 800,000 farmers now and we don't have any plan to spend on buying rice from now on," Supat Eauchai, an executive vice-president of state-owned Bank of Agriculture and Agricultural Cooperatives (BAAC), told Reuters.

The farmers had been left unpaid for months after former premier Yingluck Shinawatra dissolved parliament in December, turning her government into a caretaker one that had no power to borrow money to pay off the arrears.

An anti-government group staged a 6-month-long protest that led Thailand into a political impasse until the military took control on May 22.

Thailand's military leader General Prayuth Chan-ocha said on Friday the ruling military council had no immediate plans to maintain the rice-buying scheme begun by the ousted Yingluck.

The scheme was one of the major policies that brought Yingluck to power in 2011, thanks to a promise to pay farmers grain prices way above market rates.

Supat said the government had spent 8.80 billion Thai baht in buying rice from farmers since the policy was adopted in October 2011.

The scheme was expected to run up huge losses as the government was forced to sell rice from state stockpiles at market prices that were more than 50 percent less than the price of 15,000 baht per metric ton it had paid farmers.

Yingluck's government never revealed the exact losses to the media during its time in power.

However, the military government had said it would start checking on rice stocks throughout the country immediately before preparing a plan to manage the remaining stocks, amounting to more than 10 million tonnes, and to cover the losses.

($1=32.3500 Thai baht)

(Editing by Clarence Fernandez)

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