The cabinet on Tuesday approved a combined 141 billion baht to support an income guarantee scheme for rice and rubber farmers in the 2021-22 season.
According to government spokesman Thanakorn Wangboonkongchana, the scheme comprises an additional 76.1 billion baht for the rice price guarantee scheme, 55 billion slated to stabilise rice prices, and 10 billion for the rubber price guarantee scheme.
On Oct 25 this year, the cabinet already approved an 18-billion-baht budget to finance the rice price guarantee scheme.
Of the additional 76.1 billion baht, 74.6 billion is to pay rice farmers and 1.51 billion to compensate expenses for the state-owned Bank for Agriculture and Agricultural Cooperatives.
Mr Thanakorn said the cabinet also approved 54.9 billion baht to subsidise rice farmers' management costs and for rice quality upgrades.
Regarding rubber, the scheme covering 19.2 million rai of rubber plantations for 1.88 million farmers runs from October 2021 to March 2022.
Commerce Minister Jurin Laksanawisit said the government may have to provide additional funding from the central budget for fiscal 2023 to support the income guarantee scheme if needed.
Last Wednesday, the State Monetary and Fiscal Policy Committee approved a further 155 billion baht to support an income guarantee scheme for farmers. To facilitate such funding, the committee agreed to raise the ceiling of the state borrowing framework according to Section 28 of the State Fiscal and Financial Discipline Act -- currently capped at 30% of the annual expenditure budget -- to 35%.
Section 28 allows the government to borrow funds from state-owned financial institutions for public expenditure to elevate the public's quality of life or rehabilitate the economy. This is regarded as a semi-fiscal policy. Previous governments have made use of this borrowing channel to finance several projects, especially assistance schemes for farmers.
The cabinet also said the fiscal and monetary situation remains manageable under the fiscal sustainability framework. As of Sept 30, Thailand's public debt was equivalent to 58.2% of the GDP.