1,200 farm­ers may get loan shark re­lief

New tax would spur cred­i­tors to set­tle


Thai au­thor­i­ties are mulling strin­gent tax mea­sures to pres­sure cred­i­tors to ne­go­ti­ate with their debtors in over 1,200 farm­land-linked debt cases in the North­east.

The pol­icy re­sulted from a meet­ing yes­ter­day be­tween the De­part­ment of Spe­cial In­ves­ti­ga­tion (DSI), the Min­istry of Jus­tice and 21 other state agen­cies.

The high­light was find­ing an in­stru­ment to ease farm­ers’ debt as the 1,200plus cases now amount to 278 mil­lion baht, of­fi­cials said.

Cred­i­tors have re­port­edly been prof­i­teer­ing by charg­ing ex­or­bi­tant in­ter­est rates and then seiz­ing farm­ers’ land when they can­not meet their re­pay­ments.

The new mea­sure would tax the prof­its these loan sharks earn from the high in­ter­est rates in these spe­cial cases, thus en­cour­ag­ing them to seek out a “fairer” debt ser­vice, of­fi­cials said.

With­out such help, many of the farm­ers in Khon Kaen, Maha Sarakham and Kalasin prov­inces are ex­pected to lose their land, said Pol Col Paisit Wong­muang, chief of the DSI.

A sim­i­lar tax in­stru­ment has been used be­fore in Chaiya­phum prov­ince, he said. In that case, cred­i­tors were taxed on 200 mil­lion baht of in­come they earned from charg­ing high in­ter­est rates and from the seized land used as col­lat­eral.

The DSI will now look into these debt con­tracts to as­sess the fair value of the debt owed, said Pol Lt Col Wichai Suwan­prasert, sec­re­tary-gen­eral of the min­istry’s cen­tre for help­ing debtors who claim to have been treated un­fairly.

One prob­lem is farm­ers’ lack of knowl­edge when it comes to legally bind­ing con­tracts con­cern­ing debt, land and col­lat­eral, he said.

As a re­sult, many have agreed to deals with­out re­al­is­ing they could for­feit their land or prop­erty, he added.

Re­lated state agen­cies have agreed in prin­ci­ple to trans­fer the 1,200-plus cases to two state-run banks — the Govern­ment Sav­ings Bank and the Bank for Agri­cul­ture and Agri­cul­tural Co­op­er­a­tives — ac­cord­ing to Am­nuay Pa­tise, an ad­viser to the Na­tional Coun­cil for Peace and Or­der.

In­debted farm­ers can par­tic­i­pate in this debt-re­struc­tur­ing pro­gramme as long as they agree to take part in an­other in­come-gen­er­at­ing pro­gramme, said Mr Am­nuay, who also serves as chair­man of the Agri­cul­ture Min­istry’s com­mit­tee ap­pointed to re­solve farm­ers’ debts.

Those who have al­ready been to court and for­feited all of their farm­land will have their cases for­warded to the na­tional com­mit­tee on farm­land al­lo­ca­tion, said Som­pas Nil­phan, deputy per­ma­nent sec­re­tary of the PM’s Of­fice.

Their cases will be for­warded along with a re­quest to con­sider grant­ing them the right to use new plots, he added.

Au­thor­i­ties said they hope these mea­sures will re­sult in the 1,200-plus cases be­ing re­solved or at least sig­nif­i­cantly low­ered within three months.

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