BAAC to back 50,000 tech-savvy farmers with 55 billion baht
The Bank for Agriculture and Agricultural Cooperatives (BAAC), a state-owned entity, outlined an ambitious plan to foster a new breed of technologically adept farmers. The bank intends to support 50,000 young, smart farmers over the next five years, offering low-interest loans that total 55 billion baht (US$1.5 billion).
BAAC president, Chatchai Sirilai, announced the project’s key objective following a memorandum of understanding signing ceremony with the Agricultural Extension Department yesterday. The initiative aims to cultivate a modern generation of farmers, adept in harnessing agricultural know-how and technology. This expertise is expected to enhance crop value and reduce production costs.
The project is designed to enable young farmers to assume leadership in Thailand’s agricultural sector, thereby improving their income level. The BAAC is backing this with low-interest loans under the bio-, circular and green model, setting a minimum retail rate (MRR) of -1 for farmers and an MRR of -0.5 for agricultural institutions. A total of 35 billion baht (US$ 1 billion) is earmarked to back young smart farmers.
The loans are categorised into three groups: bio-economy credit, circular economy credit, and green credit. Additionally, the bank is extending a helping hand to retired farmers with outstanding BAAC debts. The bank will grant refinancing options to their successors who wish to continue the farming legacy.
This move is aimed at building a new generation of farmers to take over from the older generation. The scheme has a credit limit of 20 billion baht (US$550 million) and a maximum loan term of 15 years. The interest rates are set at the MRR for the first five years, followed by MRR-1 for the subsequent five years, and MRR-2 for the 11th to 15th years.
Chatchai Sirilai emphasised that the development of the new-generation farmers will fortify Thailand’s agricultural sector, boosting its competitiveness on the global stage. BAAC has ultimately set its sights on elevating the income of the agricultural sector in four dimensions: access to financial capital, technology adoption, adding value to agricultural products, and knowledge and skill development in marketing.
Agricultural sector
A recent study by the Kasikorn Research Centre revealed that the agricultural sector’s problems stem from the economic structure, as the sector involves a significant proportion of the population. According to a 2023 survey, the average per-person income in the farming sector is lower than in other sectors, reported Bangkok Post.
The farming sector’s income is five times less than the service sector’s and eight times less than the industrial sector. Furthermore, the productivity of the Thai agricultural sector lags behind regional peers such as Vietnam and India, as well as the global average.
