April 27, 2000

The Asian Development Bank yesterday backed plans to charge farmers for use of water in irrigation but said implementation would be difficult. Yoshihiro Iwasaki, director of the bank’s programme development division, said the plan conformed with an international campaign to raise global awareness of water problems.

For Thailand, he said, the government in talks with the bank said it intended to use the tax for “fiscal purposes” and to ensure more effective use of water by farmers.

The proposed tax had been discussed as Thailand was seeking a US$600-million (22.8 billion baht) loan from the bank to boost farm competitiveness.

The loan, half of which comes from the Overseas Economic Co-operation Fund of Japan, was approved in September last year for the Agriculture and Co-operatives Ministry.

Mr Iwasaki indicated implementation would not be easy if the government saw it as undue burden on farmers.

Officials said the tax would not be levied if it was not acceptable to the public and increased rural costs.

But the officials did not convince non-governmental organisations and small-scale farmers, who have argued that the tax would be levied as part of a loan condition. The tax would add to their production costs and force them to struggle harder just to compete with large enterprises.

The issue is expected to figure high on the protest agenda of pressure groups during the ADB meeting in Chiang Mai on May 6-8. Myoung Ho-shin, the ADB vice-president, said loans were focusing on projects to benefit the needy. “We are targeting poor people and poverty more than in the past.”- Prime Minister Chuan Leekpai yesterday expressed concern over possible unrest during the ADB conference.

Mr Chuan said while chairing talks on national terrorism that particular attention should be given to certain pressure groups.