The Bank for Agriculture and Agricultural Cooperatives (BAAC) has earmarked 15 billion baht in soft-loan credits to help farmers cope with the drought.
In addition, a rescheduling and interest rate cut scheme will ease the burden for drought-stricken farmers.
Drought has affected farmers in 22 provinces near the Chao Phraya River comprising some 330,000 households, president Luck Wajanawat said.
The affected provinces, mostly in the central region, are Bangkok, Kamphaeng Phet, Chachoengsao, Chai Nat, Tak, Nakhon Nayok, Nakhon Pathom, Nakhon Sawan, Nonthaburi, Pathum Thani, Phichit, Phitsanulok, Ayutthaya, Lop Buri, Samut Prakan, Samut Sakhon, Saraburi, Sing Buri, Sukhothai, Suphan Buri, Ang Thong and Uttaradit.
The debt rescheduling scheme will offer existing borrowers a debt repayment extension not exceeding 24 months from the due date. Debtors in those provinces will also receive a 3% interest rate cut.
"The government will shoulder 1.5% for farmers, while another 1.5% will be supported by BAAC," Mr Luck said.
Farmers can also borrow further from the low-interest-rate scheme, but combined debt must not exceed 500,000 baht.
Another scheme provides 10 billion baht in soft loans to farmers wanting to upgrade their irrigation systems at their plantations or change to plantations that consume less water. Eligible farmers will be allowed to borrow up to 100,000 baht each, with a payment term within 10 years and a grace period for principal payment of up to three years.
Interest will be the minimum retail rate (MRR) minus two percentage points per year. The MRR rate is 7% at present.
A different soft loan is available to farmers who want to do community businesses, offering 2.5 billion baht to those creating jobs. Those eligible can borrow up to 50,000 baht each at MRR-2 for a five-year term.
A final scheme will provide 2.5 billion baht to 3,000 existing local enterprises nationwide, allowing borrowing of up to 1 million baht at a 4% service rate per year for a 12-month term if used to extend working capital. A five-year term is allowed if borrowing is for new investment.
