The state-owned Bank for Agriculture and Agricultural Cooperatives (BAAC) has set up a 6-billion-baht loan for agricultural cooperatives and community enterprises to purchase vehicles used for production, hoping to prevent them from burning fields, which worsens the ultra-fine dust pollution problem.
Given that the prices of such vehicles, including sugar cane cutters and harvesters, are costly at more than 10 million baht per unit, the BAAC must make loans available to cooperatives and community enterprises, said bank president Apirom Sukprasert.
To qualify for the loan, borrowers must be guaranteed by sugar mills. The borrowers are charged 4% per year, of which 2% is subsidised by the government for three years.
The loan is expected to help sugar cane growers access the high-priced machines, alleviating their labour shortage, he said.
Use of the machines should help reduce burning of the fields, which worsens the air pollution problem, said Mr Apirom.
He forecast BAAC's net profit for its 2018 financial year, ending on March 31, 2019, will decline to 8.5 billion baht from 9.5 billion the previous year.
The lower net profit is attributed to the BAAC's assistance measures, including the rice harvest and quality improvement scheme for farmers, and crop insurance to comply with the government's policy.
The bank's deposits outstanding grew to 57 billion baht for the 2018 financial year, right on target thanks to several deposit schemes.
For its non-performing loans, Mr Apirom said the bad loan ratio is expected to be steady at 4% of the bank's loans outstanding of 1 trillion baht.
Some 5% of loans extended to retail farmers turned sour.
"The high bad loan rate for retail farmers could be attributed to natural disasters such as drought, and low farm prices. The BAAC must restructure or come up with a repayment reschedule for them," he said.
