The state planner has warned the government of the perils of adding another 405 billion baht to the rice pledging programme for the new 2012-13 season, as it will add to the government's financial burden and bloat the amount of rice in the state stockpile to 50 million tonnes.

The National Economic and Social Development Board (NESDB) has urged the government to be wary of its spending under the new pledging scheme.

This is because the budget will this time come partly from the Bank for Agriculture and Agricultural Cooperatives (BAAC) as loans to the state.

The NESDB said the BAAC, an executor of the scheme, has already given out 512 billion baht to farmers from the loans procured by the government under the programme for the first and second crops for the 2011-12 season.

The government has also been urged to speed up clearing the government stocks as soon as possible to alleviate the burden while rice-related agencies were told to help farmers cut production costs.

The Budget Bureau suggests the government sell the rice in its stockpile before the new pledging scheme for the 2012-13 crop begins, citing a hefty interest rate burden from the bank's loans.

Despite continued criticism of the massive spending to sponsor populist schemes, the National Rice Policy Committee early this month gave the nod to the government's request for 405 billion baht to be used as working capital for the two new crops, which together are forecast to yield 33 million tonnes of paddy.

Some 26 million tonnes of paddy _ 15 million from the first crop and 11 million from the second crop _ are expected to enter the scheme, which runs for one year from Oct 1.

Total losses in the scheme could have been much higher if not for floods disrupting the harvest late last year.

Each farmer can participate no more than twice during the year.

The programme will have the same criteria as before, with pledging prices starting from 15,000 baht a tonne for paddy rice, 20,000 baht for Hom Mali in the Northeast, 18,000 baht for provincial fragrant rice and 16,000 baht for long-grain sticky rice as well as fragrant rice from Pathum Thani.

The new budget plan was tabled for cabinet approval yesterday, but a Government House source said Commerce Minister Boonsong Teriyapirom asked the cabinet to put off the decision after the Agriculture Ministry unexpectedly proposed adding 5 million tonnes of the second output from the 2011-12 season to the rice pledging scheme.

The cabinet yesterday also approved a budget of 30 billion baht to buy rubber at above-market rates.

State agencies involved in the programme must seek government approval to use 5 billion baht at a time, said Sansanee Nakpong, a government spokeswoman.

The first disbursement of 5 billion baht for the programme was approved yesterday, she said.

Source: Bangkok Post