The Bank for Agriculture and Agricultural Cooperatives (BAAC) has warned farmers not to conspire with rice millers to cheat the rice pledging scheme.

The BAAC, which pays for rice on behalf of the government, believes some farmers have breached the rules by pledging the same rice twice.

"Farmers are sometimes paid by millers for the use of paddy to pledge," said Supat Eauchai, the senior vice-president for government secured loan development.

An investigation found some farmers in provinces in the Lower Northeast _ Buri Ram, Surin, Si Sa Ket, Yasothon and Ubon Ratchathani _ were defrauding the scheme.

Farmers have reportedly been paid 10,000 baht to allow millers to mortgage their output.

Although the amount of paddy in these frauds is not high, Mr Supat warned both millers and farmers the practice is illegal.

He said the pledging scheme encourages dishonesty, as the mortgage volume allowed for each farmer is calculated based on peak output.

Many farmers produce less than their allotment, and this often leaves them with excess paddy quota.

"Consequently, millers will pay the farmers to pledge their paddy," he said.

The official said as of last Friday, 1.06 million farmers had joined the programme, with 6.43 million tonnes of paddy pledged.

A total of 107 billion baht had been paid out to farmers.

The BAAC estimates 7.5 million tonnes of paddy from the main 2011-12 crop will be part of scheme, which ends Feb 29.

The government will extend the mortgage scheme to the second crop season, which begins in March, and spend 120 billion baht to do so.

But the programme will be modified _ pledging volume will be based on average output instead of the highest output, and farmers will receive a maximum of 500,000 baht.

Source: Bangkok post