Thailand approves $1.8 billion in loans for farmers hit by drought

BANGKOK (Reuters) - Thailand has approved loans of up to 60 billion baht ($1.77 billion) to support farmers affected by drought, the finance minister said on Monday. The wet season is under way, but Thailand is contending with drought conditions in seven out of 67 provinces, the National Disaster Warning Center said, and water rationing is taking place in almost a third of the country. Thailand's state-owned Bank of Agriculture and Agricultural Cooperatives (BAAC) has approved loans for 1 million farmers, following a meeting chaired by Finance Minister Sommai Phasee. The loans will range from short-term funds for emergencies to drought rehabilitation, to long-term assistance to increase farm productivity, with repayment periods from one to ten years. Farmers unable to immediately repay existing debt, because of the drought, can also extend their debt periods, but by no more than a year. "Famers affected by drought will now receive help to alleviate debt and will have money to spend for households in case of emergencies," Sommai told reporters. The loans will help farmers recover from drought, support jobs, and develop production, he added. Sommai reaffirmed an earlier statement that drought could cut GDP growth by 0.5 percentage point although Thailand's economy is expected to grow 3 percent in 2015 despite it. "This year, if we can grow 3 percent that would not be too bad," he said. "If we can get 3 percent we wouldn't be worse off than other countries." The economy grew only 0.9 percent last year, with the political crisis bringing it to the brink of recession in the first half. The central bank recently cut its 2015 economic growth forecast to 3.0 percent from 3.8 percent. Thai Prime Minister Prayuth Chan-Ocha led a military coup in May last year, ending months of sometimes violent street protests in Bangkok and ousting the government of Prime Minister Yingluck Shinawatra, Thailand's first woman prime minister. (Reporting by Kitiphong Thaicharoen; Writing by Viparat Jantraprap and Pairat Temphairojana; Editing by Jacqueline Wong and Clarence Fernandez)