Farmers line up for help at the Samut Prakan branch of the Bank of Agricultural Cooperatives. (Photo by Somchai Poomlard)
The Public Bank for Agriculture and Agricultural Cooperatives (BAAC) may have to extend the debt moratorium period due to the Covid-19 crisis and unimproved agricultural commodity prices, a finance ministry source said .
Finance Minister Arkhom Termpittayapaisith, as BAAC chairman, called on the bank to consider extending the debt moratorium period and undertaking debt restructuring to ease the financial burden on borrowers.
The BAAC board is scheduled to meet again on October 29.
The meeting will determine a decision to repay the interest charge for BAAC clients as a debt service incentive. The board of directors will determine the percentage of interest reimbursed.
The bank has continuously put in place a moratorium on farmers’ debt and found that 75% of them can resume normal debt service after joining the program.
In the context of the planned extension of the debt moratorium period, the ratio of borrowers returning to service their debts is not normally expected to be close to 75%, as economic conditions are still depressed, low agricultural prices. adding to the problems, the finance ministry source said. , who requested anonymity.
The plan to extend the debt moratorium period will encourage farmers to resume normal debt service, the source said.
The number of farmers participating in the debt moratorium program is 3.8 million, which represents loans valued at 1.2 trillion baht out of the bank’s total loan portfolio of 1.4 trillion.
The Commerce Ministry’s five-crop income guarantee program will be extended, the source said.
The five crops are rice, rubber, oil palm, cassava and maize.
A farmer income guarantee program is implemented by referencing the price of agricultural products so that farmers can sell their products at a price not lower than the reference price.