News in brief: Thailand has approved over $900 million to suspend debt payments for millions of farmers for three years, aiming to ease their burdens and boost their recovery. This move is significant due to Thailand’s high household debt levels and is expected to help increase agricultural production, especially with rising global rice prices.
Thailand’s cabinet has approved a $908 million plan to suspend debt payments for millions of farmers for three years. The aim is to help ease their burdens and get them to come back strong.
From October 1, Thai farmers will be able to postpone their debt repayments for three years, this includes both principal and interest.
Additionally, farmers who have kept up with their interest payments will be eligible to borrow up to 100,000 baht ($2,740) from the state-owned Bank for Agriculture and Agricultural Cooperatives. A news report says that about 2.7 million farmers are eligible to join the program.
The move is significant for Thailand, which has one of Asia’s highest levels of household debt. In 2021, for example, 66.7% of all agricultural households were in debt, largely from farming-related activities.
The new government, which resumed office in August 2023, approved a series of measures to revive the sluggish economy. These measures were important in the light of declining exports and falling investor confidence.
The debt suspension will cost the government about 11 billion baht ($302.8 million) per year. It is also timely because it will allow farmers in the country take advantage of global rising rice prices caused by India’s export ban.
A week-old Reuters report had hinted that debt was stopping farmers from planting more rice and casuing decline in cultivated land annually. With the weight of the debt lifted, albeit temporarily, it could raise production levels.
