Thai cabinet orders Thai farmers to suspend bank debt for three years

A deputy finance minister said on Tuesday that the Thai cabinet has agreed a plan to postpone debt payments for millions of farmers for a period of three years at a cost to the government of roughly 33 billion baht ($908 million).

According to Julapun Amornvivat, the suspension of principal and interest payments will start on October 1 and farmers who have complied with interest payments will also be permitted to borrow up to 100,000 baht from the government-run Bank for Agriculture and Agricultural Cooperatives.

According to him, the purpose of the legislation is to lessen farmers' obligations so they can "come back strong". A total of 2.7 million farmers are qualified to participate in the program.

Thailand, the second-largest exporter of rice in the world, has one of the highest rates of household debt in Asia.

According to official data, 66.7% of all agricultural households were in debt in 2021, primarily due to farming-related expenses. After taking out loans to pay for their crops, many agricultural families are left with generations-long debt.

The debt proposal is one of a number of policies the new populist administration, which took office last month, has put out to jump-start a stagnant economy dragged down by plummeting exports and investor confidence.

According to Julapun, the suspension would cost the government around 11 billion baht ($302.8 million) a year, while the cabinet on Tuesday gave its approval to about 12 billion baht.

($1 = 36.34 baht)