Thailand approves cash handouts, debt restructuring to aid farmers

[BANGKOK] Thailand's cabinet on Tuesday approved measures including cash handouts of 6.54 billion baht (S$256.5 million) and debt restructuring in its latest bid to help struggling farmers in Southeast Asia's second-largest economy.

Since taking power in May 2014 to end months of political unrest, Thailand's military government has battled weak exports and domestic demand in the effort to revive a sluggish economy.

The cash distribution will benefit 2.85 million farmers who earn up to 100,000 baht each year, said Nattaporn Jatusripitak, an adviser to the commerce minister.

"The overall economy is recovering, but commodity prices are still low and there are also drought problems," he told reporters. "So the cabinet has introduced the measures to improve the lives of farmers."

The government will also restructure debt of about 335 billion baht owed by 2.9 million farmers, it said in a statement.

The debt restructuring should save more than 20 billion baht in interest costs for farmers over the next five years, Kobsak Pootrakool, a vice minister in the Prime Minister's Office, told reporters.

The junta has also ramped up infrastructure projects in its efforts to lift growth.

The cabinet approved a 132-km (82-mile) dual-track railway project, worth nearly 30 billion baht, linking the central province of Saraburi and the northeastern province of Nakhon Ratchasima, which is expected to be completed by 2020.

It also agreed to borrow 166 billion yen (S$2.24 billion) from the Japan International Cooperation Agency (JICA) to help finance the 26.3-km (16-mile) Red Line in Bangkok, the capital, Mr Nattaporn said.

The Bank of Thailand has forecast economic growth of 3.2 per cent this year, up from last year's growth of 2.8 per cent.

REUTERS