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Published: Wednesday December 11, 2013 MYT 2:15:02 PM
Updated: Wednesday December 11, 2013 MYT 2:15:58 PM

Unpaid Thai rice farmers may protest, adding to PM's woes

A farmer works on his rice field in Ayutthaya province, north of Bangkok June 27, 2013. REUTERS/Chaiwat Subprasom

A farmer works on his rice field in Ayutthaya province, north of Bangkok June 27, 2013. REUTERS/Chaiwat Subprasom

BANGKOK (Reuters) - Thai farmers who have not been paid by the state for rice bought under an intervention scheme are threatening to block roads in 26 provinces, adding to the problems of Prime Minister Yingluck Shinawatra, who called a snap election this week.

Yingluck dissolved parliament on Monday and called an early election after facing protests for weeks in the capital.

The farmers have been natural supporters of Yingluck and her brother Thaksin Shinawatra, a former premier whose policies helped the poor before he was ousted in a coup in 2006.

Yingluck won a landslide victory in 2011 with support from the countryside after promising to buy rice from farmers at 15,000 Thai baht ($470) per tonne, well above the market.

The rice-buying scheme priced Thai grades out of export markets and left it with large stocks of the grain. When the government was unable to sell enough rice overseas, the state bank running the scheme ran out of funds to pay farmers.

"Farmers are very angry and they are gathering. They said they will block roads in those provinces, asking for their money, which they have been waiting for nearly two months," said Prasit Boonchoey, head of the Thai Farmers Association.

The provinces likely to be affected are in the rice-growing regions in the centre and northeast of the country.

The Bank of Agriculture and Agricultural Cooperatives (BAAC) turned to the bond market in November to get funds to pay farmers, but managed to raise only 37 billion baht on a 75 billion baht offering.

BAAC said it would try to sell more bonds in January.

Somchart Soithong, director-general of the Commerce Ministry's Department of Internal Trade, which oversees the rice-buying programme, said farmers should be paid gradually with money from the November bond.

However, the farmers are running out of patience.

"We won't stop. We are gathering and we will stage protests by this week as we haven't got our money," said Wichian Phuanglamchiak, a farmers' leader in Ayutthaya province to the north of Bangkok.

($1 = 32.1350 Thai baht)

(Editing by Alan Raybould and Tom Hogue)

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