InfoQuest (May 25, 2020)-Thai Ministry of Commerce (MOC) and the Bank for Agriculture and Agricultural Cooperatives (BAAC) of Thailand have cooperated to help farmers affected by COVID-19 and enable them to have enough working capital for sustained operation and household expenditure. According to the Commercial Mortgage Act, farmers are allowed to use valuable perennial trees as collateral when they apply for loans.
According to Mr. Weerasak Wangsuphakijkosol, deputy minister of Commerce, during the outbreak of the epidemic, government departments, private sector, and other parties have worked together to help the people, farmers, and commercial sector to tide over, make a living and keep their business afloat. Recently, the Department of Business Development (DBD) and BAAC have cooperated to accept valuable perennial trees as commercial collateral. The measure means to help farmers affected by the epidemic, ensuring that they have enough working capital for sustained operation and household expenditure. BAAC is the first bank that has accepted perennial trees as collateral according to the Commercial Mortgage Act.
"Recently, BAAC has offered 115,000 baht of loans to a farmer in Suphanburi who used 44 valuable perennial trees around his/her house as collateral. Those trees included: Tamarind tree (9), wild olive tree (1), neem tree (14), Ebony tree (1), Wrightia tomentosa (1), ceiba (1), sandol tree (1), persimmon tree (2), Morinda citrifolia (1), mango (1), and rosewood (12). That sent an encouraging signal, showing that financial institutions value such a practice. In this way, it will be easier for farmers to access funds," said the deputy minister.
He pointed out that eligible farmers have to be clients of BAAC and members of Tree Bank. Farmers can apply to participate in the programs via branches of BAAC across the country, and follow procedures according to the rules of BAAC. To help mitigate the difficulties caused by the epidemic, the procedures are not complex.
Previously, DBD issued the departmental regulation of allowing using perennial trees as collateral from November 5, 2018, aiming to promote the using of perennial trees as commercial collateral via BAAC and protect forest resources. BAAC is the bank responsible for the Tree Bank program. DBD and BAAC have also launched a pilot Baan Don San Chao study center program in Song Phi Nong, Suphanburi, aiming to set up a role model of self-sufficient economy. Tree evaluators of BAAC evaluate the value of farmers' trees in each region to facilitate the practice of using those trees as commercial collateral. This program will be spread to other provinces in Thailand.
According to the deputy minister, such a practice makes the people know the benefits of planting valuable trees in their land: besides chopping those trees and sell them, they can also use them as collateral. What's more, as trees grow, their value will increase, and farmers will see their asset appreciate. Especially, during the epidemic, the whole country's economy has suffered, and the concept of self-sufficient economy can help alleviate many problems.
Meanwhile, such a practice also echoes with the mission of a community program, which aims to encourage farmers and other people to save money by planting valuable trees, protect forest resources, and increase forest area. DBD and BAAC are also the competent departments that are responsible for the program.
Source: InfoQuest, by Phana / Kasamarporn / Rachada, translated by Xinhua Silk Road
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