Drought crisis could knock down growth in Thailand

Drought crisis could knock down growth in Thailand
PHOTO: The Nation/ANN

If government measures on tackling the drought are weak, the economy could be dragged down by more than half a percentage point this year owing to dampened spending power, Finance Minister Sommai Phasee warned yesterday.

"If the growth rate forecast is at 3.5 per cent, it could shrink to 3 per cent," he said, adding that if measures were strong enough, the growth rate should not be cut by any more than 0.5 percentage points.

But he said the drought problem should be solved soon, as in-flows into dams tend to rise in the later months of the year. However, to help alleviate the problem immediately, state agencies should come up with measures to help farmers and consumers affected by the dry season, he added.

The minister has instructed the Bank for Agriculture and Agricultural Cooperatives to provide a debt moratorium - on both the principal and interest rate - to farmers for about six months.

Commerce Minister General Chatchai Sarikalya said his ministry and the Interior Ministry would send mobile units to 35 affected provinces to sell essential goods at cheaper prices to help people out.

The ministry's Business Development Department plans to encourage local businesses to employ affected farmers, while the ministry also plans to sell packs of rice directly to consumers.

Apart from clearing the government rice stockpile, the ministry also plans to sell 1.33 million tonnes of rotten rice to ethanol-production plants.

Supant Mongkolsuthree, chairman of the Federation of Thai Industries (FTI), said that if the government's measures cannot ease the crisis, there was a chance that domestic consumption would be affected further. Hence, he suggested the government should create farm zones to match water supply and encourage farmers to opt for crops that demand less water.

Meanwhile, Agriculture and Cooperatives Minister Peetipong Phuengbun na Ayutthaya said some 4 million rai was used for rice farming in the Chao Phraya Basin.

"Of that, some 500,000 rai are being worked on even after rice farmers in the area were told to delay sowing their crop," he said, adding that more than 800,000 rai of paddy fields were at risk of withering given the water shortage.

This year's rainy season has yet to bring a significant amount of rain.

Peetipong said the drought could become a real crisis if adequate rain does not arrive by early August.

"If this happens, there will be an impact on tap water, on driving out seawater and on the agricultural sector," he said.

Somsak Chailert, a farmer from Pathum Thani province, said he sowed rice in his 100-rai farm early last month. "At that time, the government said it was okay to start growing rice," he said. "We were told there would be irrigation for our farmland."

But now, he was really worried his crop would wither due to water shortage. The level of water in a local canal has dropped to just 40 centimetres, which has to be maintained to stop adjacent roads from crumbling. Somsak said he hoped the government would step in to help farmers.

In Lop Buri, another province in the Chao Phraya Basin, the Pasak Jolasid Dam only has 69.84 million cubic metres of water, which accounts for just 7.3 per cent of the dam's capacity.

"Not a single drop of water has come into this dam for more than a week," Attaporn Panyachom, the director of Irrigation Office 10 in Lop Buri, said.

He said the amount of water discharged from the dam would have to be reduced, and warned fish farmers who rely on water from the dam to be ready.

"If possible, please stop farming fish," he said.

In addition to local farmers, more than 150,000 people in Lop Buri's Phattana Nikhom district are getting very worried that their taps may run dry.

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