Thailand’s public debt likely to increase to about 5.55 trillion baht (around $171 billion) or about 46% of the country’s gross domestic product(GDP) in 2014 fiscal year (October 2013 – September 2014), up about 5.22% from about 40.78% of GDP in FY 2011 due to the rice pledging scheme, according to a Finance Ministry source.

To Overcome public  debt The Thai Finance Ministry has raised three-year loans of about 40 billion baht (around $1.2 billion) to complete payments under the rice pledging scheme, which has been abandoned since February 28, 2014, due to lack of funds with the government to run the scheme, reports Reuter

Three banks – Government Savings Bank (GSB), Bank of Ayudhaya and Bank of Tokyo-Mitsubishi UFJ – won the loan bid conducted today with average annual interest rate of 2.2705%, the Head of the Finance ministry’s Public Debt Management Office (PDMO) was quoted as saying. He told reporters that the interest rate was less than the yield of 2.46% on three-year government bonds. While the state-run GSB will lend 20 billion baht (around $615 million), Bank of Ayudhaya and Bank of Tokyo-Mitsubishi UFJ will led 10 billion baht (around $307 million) each.

The Ministry will have to return 40 billion baht (around $1.2 billion) to the Bank of Agriculture and Agricultural Cooperatives (BAAC), which started off making payments from its reserves after the military junta, took over on May 22, 2014. Later the Finance Ministry raised 50 billion baht (around $1.5 billion) in loans to make payments to farmers. On the day the military junta took over, total payments to be made to farmers stood at 90 billion baht (around $2.77 billion).

Meanwhile, the NCPO has set up a panel to work on alternatives to rice pledging scheme, according to local sources. The panel will come up with a plan considering the various suggestions by the stakeholders in Monday’s meeting with the NCPO. Suggestions included subsidies for chemical fertiliser and pesticides, a welfare scheme for farmers, and cheap land rental fees for landless farmers, according to the local sources.