Executive Director, Institute of Future Studies for Development
The farm debt moratorium policy of certain political parties has become the latest hot topic of conversation in political circles these days. In particular, the policy appeals to the nation’s farmers, the largest bloc of voters, whose most pressing problem at the moment is their debts. It is hardly surprising then that many political parties are promoting this policy to garner votes and no doubt the current popularity of this policy is understandably politically motivated.
Whether or not the policy will be implemented is not as important as whether or not this strategy would genuinely resolve their poverty. We must determine the best way to help these important but neglected citizens of our nation.
In Thailand, the phrase “farm debt moratorium” is used to denote the act of delaying payment schedules on existing farm debts so that farmers can once again be given breathing room and gain a livelihood in the agricultural sector. Debt moratorium would allow farmers, many, who are now unable to borrow money to buy seed, fertilizer, etc., to once again engage in producing the nation’s agricultural supplies and, eventually repay their debts.
Actually, this tactic is nothing new. It has been used by the Bank for Agriculture and Agricultural Cooperatives (BAAC) with certain kinds of debtors. However, BAAC’s 1-year-debt-moratorium scheme has been criticized by many political parties as being inadequate. Critics argue that one year is not enough time for farmers to regain financial liquidity and begin repaying their debts. As a result, many political parties are proposing debt moratoriums of a longer term than would be offered to all indebted farmers normally. In addition, they have proposed that farmers be given low interest loans or no-strings-attached government handouts, ultimately aimed at resolving poverty in the agricultural sector.
Whether or not the policy will be implemented is not as important as whether or not this strategy would genuinely resolve their poverty. We must determine the best way to help these important but neglected citizens of our nation.
In Thailand, the phrase “farm debt moratorium” is used to denote the act of delaying payment schedules on existing farm debts so that farmers can once again be given breathing room and gain a livelihood in the agricultural sector. Debt moratorium would allow farmers, many, who are now unable to borrow money to buy seed, fertilizer, etc., to once again engage in producing the nation’s agricultural supplies and, eventually repay their debts.
Actually, this tactic is nothing new. It has been used by the Bank for Agriculture and Agricultural Cooperatives (BAAC) with certain kinds of debtors. However, BAAC’s 1-year-debt-moratorium scheme has been criticized by many political parties as being inadequate. Critics argue that one year is not enough time for farmers to regain financial liquidity and begin repaying their debts. As a result, many political parties are proposing debt moratoriums of a longer term than would be offered to all indebted farmers normally. In addition, they have proposed that farmers be given low interest loans or no-strings-attached government handouts, ultimately aimed at resolving poverty in the agricultural sector.
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