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Statement by Dr Sitdhi Boonyaratpalin Deputy Permanent Secretary Ministry of Agriculture and Cooperatives Thailand to the 25th Session of IFAD's Governing Council

19-20 February, 2002
Rome, Italy

Mr. Chairman,
Mr. President of IFAD,
Honourable Governors,
Distinguished Delegates,
Ladies and Gentlemen,

It is indeed an honour for me to be here today and to participate in the Twenty-Fifth Session of IFAD's Governing Council.

On behalf of the Ministry of Agriculture and Cooperatives of the Royal Thai Government, I would like to express our heartfelt appreciation to His Excellency Mr. Lennart Bage, President of IFAD, on his Initiative to make this meeting more interactive and productive with the theme "Financing Development - the Rural Dimension".

I also wish to congratulate both the Chairman and the vice-chairmen upon their elections to lead this Session.

Mr. Chairman,

As one of the founders of IFAD, Thailand not only realizes the significance of IFAD's goal of rural poverty alleviation, but also makes an effort within our ability to achieve this goal. Notably, under the present government, Thailand has declared war on poverty. Please let me brief you on two of the new policies of my government. They are known as "The Debt Restructuring Scheme for Small-Scale Farmers" and "The Village Fund of One Million Baht".

The Debt Restructuring Scheme for Small-Scale Farmers. This government funded initiative provides rural farmers, who have outstanding loans, to take a break from loan repayments. This grace period applies to both interest and principle repayments for three years, with the primary objective of giving farmers a chance to improve their production efficiency, and emerge financially stronger and more self-reliant.

Simultaneously, farmers will participate in an occupational rehabilitation programme, and a savings plan, to assist their chances of increasing their incomes, and thus gaining access to sufficient food.

As of the end of June 2001, 1.15 million farmers were participating in the debt restructuring scheme, their combined debts totaled 53.7 billion Baht, which is equivalent to 1.17 billion U.S. dollars.

10% of the farmers involved in the debt restructuring scheme are already participating in the occupation rehabilitation programme. The target is to have all farmers enrolled in the occupation rehabilitation programme by the end of this year.

The second initiatve introduced by the Thai government is the village fund of one million Baht, which is equivalent to 21,000 U.S. dollars per village.

The objective of this fund is to act as a revolving loan facility, available for individuals and households within the community, to borrow for local investment.

The fund will be used to support the process of self-sufficient development at the community level, hence stimulating the economy, and strengthening the peoples' capacity to meet their subsistence requirements.

The village fund has already been allocated to 90% of the 70,000 villages that will be involved in the programme.

Furthermore, the government has implemented policies to achieve sustainable development as officially mentioned in the 9th National Economic and Social Development Plan (2002-2006). The key goals of the 9th plan include poverty alleviation and recovery in a stable and sustainable manner.

Mr. Chairman,

I am pleased to express my appreciation on The Progress Report on the IFAD V: Plan of Action (2000-2002), especially on item D on page 13, referring to IFAD's budget allocation from 2000 to 2001 in which more than 70% of loans to poor countries were highly concessional, exceeding the set target of 67%.

However, Thailand would like to draw IFAD's attention to countries facing the continuing economic crisis which is unavoidably affecting the rural poor's ability to recover. The lowering of the interest rates on ordinary loans to, for example, 75% of the reference rate per annum for a certain period of time would be of great assistance to these countries.

Mr. Chairman,

Finally, I would like to assure IFAD of the Thai Government's continued support. Even though Thailand strives to move out of the current financial crisis, we have once again contributed to the Fifth Replenishment.