Bank for Agriculture and Agricultural Cooperatives (BAAC), in collaboration with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), has launched climate-smart subsidy and low-interest loan schemes under the Thai Rice GCF Project, with a total budget of over 5.3 billion-baht. The initiative aims to support approximately 40,000 Thai rice farmers in transitioning to climate-smart rice farming practices, contributing to the reduction of greenhouse gas emissions and climate change mitigation.
Mr Paisan Hongthong, BAAC Senior Executive Vice President, said at the official launch of subsidy schemes and low-interest loan programmes under the Thai Rice: Strengthening Climate-Smart Rice Farming (Thai Rice GCF) Project: “The initiative aims to shift farmers’ rice farming practices towards climate-smart and low-greenhouse-gas-emission approaches by promoting the adoption of climate-smart technologies (CST). These technologies enhance the resilience of smallholder farmers to climate change while reducing environmental impacts.”
The Thai Rice GCF project is funded by the Green Climate Fund (GCF), the German Federal Ministry for Economic Cooperation and Development (BMZ) and the private sector, and is implemented in collaboration with key partners including the Rice Department, the Department of Agricultural Extension, and GIZ, as well as public and private-sector organisations.
With a five-year implementation period from 2023 to 2028, the project targets 21 provinces: Chiang Rai, Chiang Mai, Nakhon Ratchasima, Buriram, Ubon Ratchathani, Roi Et, Surin, Si Sa Ket, Kalasin, Chainat, Ang Thong, Pathum Thani, Sing Buri, Ayutthaya, Suphan Buri, Uthai Thani, Nakhon Sawan, Kamphaeng Phet, Phitsanulok, Phichit and Lopburi.
Thailand’s rice sector needs change. Conventional rice farming practices that require large volume of water and continuous flooding of paddy fields results in methane emissions – a major greenhouse gas. Thailand is among the 16 countries identified as highly vulnerable to the impacts of climate change over the next 30 years, which is expected to reduce rice productivity, lead to income losses for farmers, and pose risks to farmers’ livelihoods as well as global food security.
This shift is expected to increase agricultural productivity, enhance farmers’ incomes and quality of life, while reducing greenhouse gas emissions. However, the transition requires farmers and service providers to understand climate risks, select appropriate technologies suited to their farming areas and plan investments while systematically recording farming progress.
“Through the Climate Smart Incentive (CSI), we reward farmers for their stewardship, while the Climate Smart Loan (CSL) bridges the gap for the necessary upfront investments in technology. This integrated approach de-risks the transition, builds farmer confidence, and demonstrates how green finance can catalyse truly transformational change,” said Timo Menniken, Country Director of GIZ Thailand.
To address these challenges, BAAC’s financial mechanisms (or Climate-Smart Packages) serve as key incentives to encourage farmers to adopt and implement climate-smart rice farming practices. The financial mechanisms consist of two main programmes:
1. Climate-Smart Incentive (CSI)
Under the Thai Rice GCF Project, a Climate-Smart Incentive (CSI) fund of approximately 300 million baht (7.6 million euros) has been allocated to support around 40,000 rice farmers in piloting climate-smart rice farming practices. The incentive is provided as partial financial support to encourage farmers to adjust their rice cultivation methods towards approaches that are more resilient to climate change and generate lower greenhouse gas emissions. Farmers may choose from three subsidy levels depending on the scale of implementation, starting from Package S with support rates set at 500 baht/rai, Package M for 1,000 baht/rai, and Package L for 1,600 baht/rai. Each farming household is eligible to receive incentives for a maximum of 10 rai.
2. Climate-Smart Loan (CSL)
In parallel, BAAC has introduced the Climate-Smart Loan (CSL) scheme with a total credit line of THB 5 billion, offering preferential interest rates to eligible rice farmers under the Thai Rice GCF Project. The loans are available to farmers who have completed approved training programmes on climate-smart technologies (Basic CST) provided by the Rice Department and the Department of Agricultural Extension, as well as advanced training on investment planning and financial management (Climate-Smart Finance: CS-Fin) delivered by BAAC. The CSL enables farmers to access low-cost financing for working capital and for investments in adopting climate-smart technologies promoted by the project, as well as loans aligned with the Bio-Circular-Green (BCG) economic model for farmers seeking to adopt climate-smart practices and transform their rice farming approaches.
Farmers interested in participating in the Thai Rice GCF Project may contact district or agricultural offices, rice seed centres, rice research centres or the Thailand Rice Science Institute. Upon completion of both training courses, farmers may apply for the CSI subsidy through BAAC officers, project trainers or BAAC branches where they are registered customers.
For further information, farmers may contact BAAC branches in the 21 participating provinces or the International Affairs Division at 02 558 6555 ext. 8957 or 8958. ■
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