Bangkok: The Cabinet has given the green light for the Dairy Farming Promotion Organization of Thailand (DFPO) to borrow 600 million baht with a 0% interest rate to purchase raw milk, aiming to support dairy farmers within the DFPO's designated areas.
According to Thai News Agency, the approval came following a proposal from the Ministry of Agriculture and Cooperatives. The Cabinet sanctioned the DFPO to secure the 600 million baht loan from the Farmers' Welfare Fund. This allocation will finance the second phase of a raw milk purchase project designed for agricultural purposes, offering a repayment period spanning seven years from 2025 to 2032.
The project is intended to bolster the financial liquidity of the DFPO, serving as working capital for acquiring raw milk from dairy farmers located in the DFPO's five regional support areas: Central (Saraburi), Southern (Prachuap Khiri Khan), Northeastern (Khon Kaen), Upper Northern (Chiang Mai), and Lower Northern (Sukhothai). The initiative encompasses 44 cooperatives with a total of 5,110 farmer members.
This second phase builds upon a previous effort initiated in 2025 when the DFPO encountered significant financial liquidity challenges due to the economic downturn, reduced consumer purchasing power, and unmet dairy product sales targets. Concurrently, increased production costs and the effects of the Thailand-Australia Free Trade Agreement and the Thailand-New Zealand Economic Partnership Agreement, which reduced import tariffs on dairy products and milk powder to 0%, prompted some businesses to favor imported milk powder over domestic raw milk. The DFPO's initial phase provided some relief by purchasing excess raw milk from farmers lacking market outlets, but it only partially addressed the broader issue.
"For phase 2 of the project, the goal is to purchase 26,375,000 kilograms of raw milk per production cycle from dairy cooperatives affiliated with the DFPO. Farmers in the project can sell raw milk in three production cycles per year, totaling 79,125,000 kilograms, over the seven-year project period (2026-2032)," stated the spokesperson for the Prime Minister.