Farmers participating in the rice pledging scheme have been receiving payments from the government since Nov 14, and the liquidity of the Bank for Agriculture and Agricultural Cooperatives (BAAC) is sufficient to finance the main crop, says Deputy Finance Minister Tanusak Lek-uthai.
He said finances have been managed in such a way as to solve another problem of the rice scheme - the cabinet limit of 500 billion baht.
"Now we have 82 billion baht to pay the farmers who pledged rice to us since the main crop began in October," said Mr Tanusak.
He said the issue was resolved by using 82 billion baht from the fiscal-2014 budget earmarked to pay the BAAC's debt in order to pay farmers who had not received any money from the scheme since last month.
The fiscal-2014 budget will be used to repay the BAAC in a bid to keep total expenditure below the 500 billion baht limit imposed by the cabinet.
Previously, the BAAC spent 680 billion baht on the scheme, the Commerce Ministry paid the bank 150 billion, with 30 billion baht to be wiped out by the budget.
Since Oct 1, participating farmers have been furious about the delayed payment, which meant they lacked money to buy essential materials for the harvest season.
Mr Tanusak said apart from the fiscal budget, the government is confident it will earn 24 billion baht from selling rice by year-end, with all the proceeds used for further payouts from the BAAC.
He said the farmers' anger has eased as they have been receiving money since mid-November.
So far, the BAAC has paid farmers a total of 3.52 billion baht or 20,000 baht per household.
Previously, the Public Debt Management Office (PDMO) disclosed a plan to raise funds of 140 billion baht for the 2013-14 main crop, with 75 billion baht to be raised through government bonds to finance the scheme and borrowing in the form of term loans.
"Part of the proceeds from the PDMO will be used to repay the bank for the accrued debt from the subsidy where it is supposed to be cleared by the fiscal-2014 budget. The bank's liquidity crunch is an immediate crisis, so we need to use the budget to handle this first," said Mr Tanusak.
He insisted that by doing so, the government's paddy scheme is financially manageable.