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Unpaid Thai farmers call off airport tractor protest

Source: Reuters - Fri, 21 Feb 2014 12:02 PM
Author: Reuters
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* Some farmers have waited months for payment for rice

* Farmers' movement separate to anti-government protests

* Moody's says unrest will not undermine Thailand's rating (Adds share prices, details of bond-selling scheme)

By Pairat Temphairojana and Panarat Thepgumpanat

BANGKOK, Feb 21 (Reuters) - Thai farmers, angry at not being paid under a rice subsidy scheme, called off a protest tractor drive to Bangkok's main airport on Friday after an assurance they would get their money, some welcome news for Prime Minister Yingluck Shinawatra.

The subsidy programme was among the populist policies pioneered by Yingluck's billionaire brother, Thaksin Shinawatra, a former prime minister central to a conflict that has divided Thais for years and triggered protests, violent at times, that have paralysed parts of the capital for weeks.

The farmers had said they wanted to make a symbolic protest, with no plans to block air traffic as in 2008, when protesters forced Bangkok's two main airports to close.

Former member of parliament Chada Thaiseth, speaking for the farmers gathered in Ayutthaya province, said they had been assured of payment.

"The government will make payment next week. The farmers will head back now and will see whether the government will pay as promised," he told Reuters. "If it isn't delivered, we will return."

He said payments would be made via the state-owned Bank for Agriculture and Agricultural Cooperatives from next week.

The government said it would sell bonds to pay for the rice, but that it would take seven or eight weeks for the sale to start, a move likely to prompt criticism that it is acting beyond its remit.

Yingluck has headed a caretaker government with limited spending powers since calling a snap election in December. Voting this month was disrupted by her opponents, and it could be months before a new government can be installed.

But in further good news for Yingluck, Moody's Investors Service affirmed Thailand's government bond rating at Baa1 with a stable outlook.

"Moody's affirmation is based on the view that Thailand's credit fundamentals have withstood the political turbulence in the country since the September 2006 coup," it said, referring to Thaksin's overthrow by the army.

"The stable rating outlook reflects the expectation that the recent resurgence in political infighting in Bangkok will not undermine Thailand's credit strengths to a material degree."

RICE STOCKPILE

The much-maligned rice programme is critical to Yingluck's support base in the poorer north and northeast.

Generous subsidies for farmers were a centrepiece of the platform that swept her to power in 2011, but they have left Thailand with vast stockpiles of rice and a bill it is struggling to fund.

Opposition leaders say the scheme is riven with graft. Losses to the taxpayer, estimated at 200 billion baht ($6 billion) a year, have fuelled urban anger with Yingluck.

She and her government are being investigated by an anti-corruption panel for alleged irregularities in the subsidy scheme.

The farmers' anger over not being paid and the investigation into the subsidy programme come as Yingluck faces a campaign of street protests to oust her that has been going on for nearly four months.

Four protesters and a police officer were killed on Tuesday when police attempted to reclaim protest sites near government buildings that have been occupied for weeks.

The protesters want to stamp out what they see as the malign influence of Thaksin, regarded by many as the real power behind the government. This week they targeted businesses linked to the Shinawatra family, sending their stock prices lower.

Property developer SC Asset Corp has lost almost 10 percent since Wednesday and mobile handset distributor M-Link Asia Corp has lost 12 percent.

The protests are the latest instalment of an eight-year political battle broadly pitting the Bangkok middle class and royalist establishment against the mostly rural supporters of Yingluck and Thaksin.

Demonstrators accuse Thaksin of nepotism and corruption and say that, prior to being toppled by the army, he used taxpayers' money for populist subsidies such as the rice scheme and easy loans that bought him the loyalty of millions. (Additional reporting by Aukkarapon Niyomyat, Pracha Hariraksapitak and Khettiya Jittapong; Writing by Nick Macfie; Editing by Alan Raybould and Ron Popeski)

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