28/12/05 Thailand (Bangkok Post)--The Agriculture Ministry will soon seek cabinet approval for interest rate compensation to farmers who agree to grow palm as part of the biodiesel production campaign.

Compensation would be offered for the first four years of planting, the time it takes the trees to yield fruit, according to Chavarin Saila, director of Office of Farmers Business Promotion Project Management.

The cabinet recently approved a four-year oil palm development plan for biodiesel production starting from next year onward, with an aim to grow 720,000 rai of palm trees in 2006.

The development plan covers 185,000 rai of existing palm plantations, 90,000 rai planted on military land and 445,000 rai of new fields.

Of the new plantation area, about 180,000 rai would be used by large operators, particularly in Trat and Nong Khai provinces, with the remaining 265,000 rai for small-scale farmers in southern and eastern provinces.

Under the development plan, the government has agreed to offer loans through the Bank for Agricultural and Agricultural Co-operatives (BAAC) at 17,705 baht per rai to develop new areas and 705 baht for existing areas.