September 19, 2025

Thai farmers need smart loans to invest in climate smart and resilient farming, study says

Activities, Climate Risk Financing, News and Events

Story and Photos: Apiradee Treerutkuarkul/ Agriculture and Food Cluster/ GIZ Thailand

A study by the Innovative Climate Risk Financing for the Agricultural Sector in the ASEAN Region Project (AgriCRF) highlighted a need among Thai farmers to access financial incentives to transform their traditional rice farming towards climate smart farming practices.

Conducted from September 2024 to August 2025, the study entitled ‘Enhancing BAAC’s Green Credit Portfolio to Support Farmers and Farmer Groups in Accessing Green Financial Products and Services for the Adoption of Climate Smart Agriculture (CSA)’ focused on key players in rice production supply chains, including provincial agricultural services providers, millers and exporters and smallholder farmers in Chiang Rai, Suphanburi and Ubon Ratchathani provinces.

A team of researchers at Kasetsart University’s faculty of economics reviewed international concepts and case studies on green finance, assessed BAAC’s current green loan portfolio, evaluated farmers’ financing needs, and developed policy recommendations for enhancing financial products that are contextually appropriate and sustainable.

The study results were presented during a recent review session. Up to 50 participants from Bank of Agriculture and Agricultural Cooperatives, the Department of Rice, Department of Agriculture, Department of Agricultural Extension, Rice Millers Association and farmers’ representatives attended the activity to give final reviews and input.

Following the results, so-called ‘Climate Smart Loan’ packages suitable for rice smallholders in different areas of the country should also be available. That means farmers can invest in and put into practice climate smart technologies e.g. laser land levelling, alternate wetting and drying rice farming, and soil nutrient and straw management etc.

The study led by a team of researchers at Kasetsart University’s Faculty of Economics also shows farmers (one of the key research respondent groups) need marketing-based incentives, for example, premium prices for sustainably-produced rice and global standards certification for their produce, which will enable them to eventually access different financial loan programmes available in the long run.

Associate Professor Isriya Bunyasiri, Principal Researcher, said the study also did a deep dive into the specific needs of farmers in different areas. In massive rice farming areas like Suphanburi and Ubon Ratchathani provinces, farmers needed green loan packages for scaling up rice production standards such as Good Agricultural Practice (GAP), the Sustainable Rice Platform (SRP) and Thai Agricultural Standards (TAS), requiring investment costs. Meanwhile those in the North needed knowledge and awareness of climate resilience so they could adapt their farming practices and prepare for severe weather patterns such as drought, heavy rains, floods and landslides.

Mr Supachai Thammasiri, Assistant Director of BAAC’s Office of Foreign Affairs, said BAAC would integrate study results into the existing green loan packages and map out incentives further to rice products. The bank is in the process of launching ‘Climate Smart Loans’, which will offer reduced interest rates for farmers who are clients of the bank as a part of its collaboration efforts with GIZ through the Thai Rice GCF project. ■