Thailand’s cash-strapped Ministry of Finance will consult the Budget Bureau about finding an additional 76 billion baht to fund the Commerce Ministry’s rice farmer revenue guarantee scheme, for the 2021-22 main rice crops, estimated to cost about 89 billion baht.

Finance Minister Arkhom Termpittayapaisith said, today (Tuesday), that he had to talk to the Budget Bureau, adding that the fund will be paid in instalments via the state-owned Bank of Agriculture and Agricultural Cooperatives, with the first expected in the next three months, when rice is harvested for market.

One of the options proposed is to extend the limit of fund raising through special state-run financial institutions or other agencies to more than 30% of the budget for the 2022 fiscal year.

Mr. Arkhom said he could not say anything about this option until he has met with the Budget Bureau, adding that the guaranteed price of rice is actually set and managed by the Commerce Ministry.

According to fiscal discipline legislation, the use of funds from special state-run financial institutions is capped at 30% of budgeted expenditure, or 930 billion baht, out of a total public sector budget of 3.1 trillion baht.

An informed government source said that the rice support scheme will put a lot of strain on the finances of the BAAC, unless there is an injection of new cash, noting that rice’s currently low market price means that the taxpayer will have to pay more to the farmers in compensation.

The source also said that the proposed option, to increase the limits of funding raised from special state-run financial institutions, is similar to increasing the public debt ceiling from 60% to 70% of GDP.