Study of farm debt in relation to farm credit
1991
Mananya Teyadhiti | Louchai Vara-arporn (Office of Agricultural Economics, Bangkok (Thailand). Div. of Policy and Agricultural Developement Plan)
This study aims to identify the problems relating to farm debts and loans in order to base the remedial guidelines on the debt problems where in the delinquencies are here focussed. The problem were usually caused by the farm income level that was generally lower than the household spending. In addition, the emerging change of the dominant Thai farm systems of the traditional self-sufficiency to the prevailing business orientation caused a heavy debt incurred in mortgaging, sale or consignment of a farm real estate made with the non-institutional lender and lastly, the inefficient public administration of several farm support projects accentuated the delinquency problems greatly with respect to the farm lending problems. The prevailing poor spatial distribution of the credit volumes were mainly caused by the red tape of the regulations for the lending service, the locations of the credit source being not well dispersed, the involvement of much risk and adequacy of the low-cost operating capital. Major corrective guidelines would be encouragement of and access to the non-farm job opportunities, assistances for the displaced farm people who are natural disaster stricken, transfer to bank for Agriculture and Agricultural Cooperatives (BAAC) of the farm debts from the non-institutional lending sources. Important remedial guidelines on the lending problems include pushing for an improvement of the BBAC regulations governing the lending service that will be favourable to the non-farm work expected to be engaged by the farm households, establishment of a fund for use as farm loan security, crop insurance and lastly, provision of low interest cost credit for the poorer smallholders.
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