In order to discuss regarding the payment of over US$2.5 billion owned to farmers under a failed Rice Pledging Scheme subsidy scheme run by the government, the Thailand’s military Junta and Finance ministry are meeting on Monday.
Finance ministry commented that Air Chief Marshal, Prajin Juntong will meet senior officials of the ministry and state banks in order to set out a policy. Under military government Prajin has taken charge of economic affairs. Army Chief, General Prayuth Chan-Ocha addressed the civil servants saying that paying farmers for Rice Pledging Scheme is the priority.
The Rice Pledging Scheme was a policy introduced by Yingluck Shinawatra but was criticized by opponents as it caused huge losses being riddled with corruption. Thailand’s anti-graft agency held Yingluck for negligence for the charges regarding rice-subsidy scheme which initially has gained her support of Thailand’s poor. Thaksin, Yingluck’s billionaire brother earned loathing of the royal establishment and was himself ousted in a military coup in 2006.
The scheme initially boosted rural earnings but made it impossible for the government to sell rice on export without taking in big losses and hence resulted in huge stockpiles. The government has expected that with reduced supply the international prices would rise and being the largest rice export would eventually lead to profits. But the plan failed as India and Vietnam exported million of tones of rice to fill the gap.
With the failure, the Yingluck government faced anti-government protests and further forced to dissolve the parliament. But the protesters disrupted the elections and this left Thailand without a fully functioning government until army took over on Thursday.
The budget office has reported that there is about 40 million baht ($1.23 billion) available in the central budget which can be used to pay farmers. Prayuth added that some are offering loan of 50 billion baht, but all this is subject to the loans from banks, as earlier commercial and state banks denied lending loan to Yinguck administration as they were worried about the legitimacy of such borrowing by caretaker government.
As per reports, at the end of April farmers were still owed an estimated 90.5 billion baht and Prayuth has commented that all farmers could be paid within 20-25 days.